Estonia Rail Electrification: EIB Funding Fuels Sustainable Transport

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Introduction

Eesti Raudtee and the European Investment Bank (EIB) have signed a EUR 45 million loan agreement to finance projects aimed at electrifying Estonia’s rail network, with completion expected by 2030.

Project Financing

The EUR 45 million loan from the EIB will support Eesti Raudtee in upgrading its rail network and related infrastructure. The aim is to increase the proportion of the country’s rail network that is powered by electricity, thereby reducing reliance on diesel traction.

Project Goals and Benefits

The project is designed to enhance rail connectivity for passengers throughout Estonia and facilitate environmentally friendly freight transport. The expected benefits include reduced emissions, improved safety, and decreased noise pollution.

Key Project Components

The electrification of the final section near Tallinn is a key component of the project, supported by the EIB loan. This will enable Eesti Raudtee to complete its national electrification program. Upon completion, 600 kilometers of railway, representing 50% of the network, will be electrified.

Financial Context and Strategic Alignment

This financing complements EU and national grants and offers flexible terms to accelerate implementation. It builds upon a EUR 113.5 million EIB loan signed in 2020, bringing the bank’s total support for Estonia’s railway modernization to nearly EUR 160 million. The project is part of the North Sea–Baltic TEN-T Corridor, supporting regional development and EU climate goals. The implemented projects to increase the share of Estonia’s electrified rail network will help reduce greenhouse gas emissions. The planned works will also improve the safety and punctuality of train services and develop a transport management system that complies with European Union requirements.

Conclusion

Eesti Raudtee and the EIB have agreed on a EUR 45 million loan to electrify Estonia’s rail network. This project, supported by previous EIB funding and EU grants, aims to modernize the railway, improve transport efficiency, and reduce environmental impact, with an expected completion date by 2030.

Company Summary

Eesti Raudtee: Develops and maintains 1,186 km of railway network, 61 stations, and 135 railway platforms.

European Investment Bank (EIB): Provides financial support for projects aimed at improving infrastructure and supporting climate goals.