The European Bank for Reconstruction and Development (EBRD) is set to provide a loan of up to €150m for the electrification and modernisation of a 253km stretch of railway line in southern Ukraine.

The Dolynska-Mykolaiv-Kolosivka railway line connects several major industrial and agricultural areas with the cities of Odessa and Mykolaiv.

“By supporting this project, the EBRD is not only promoting an efficient and ecologically friendly means of transportation, but is contributing to the development of best international corporate governance standards.”

Additionally, the project will receive a similar-sized loan from the European Investment Bank, as well as a €6.8m grant from the European Union’s (EU) Neighbourhood Investment Facility.

The 15-year sovereign-guaranteed loan was awarded to Ukrainian railways (UZ) and will be used to electrify and connect the railway line to the high-voltage grid, as well as install a second track on the single track sections along the Dolynska-Mykolaiv railway network.

Railway operations are expected to improve significantly across the region following the project’s completion.

Carbon dioxide (CO2) emissions are also expected to fall by around 140,000t a year as a result of the initiative.

EBRD Ukraine country director Sevki Acuner said: “By supporting this project, the EBRD is not only promoting an efficient and ecologically friendly means of transportation, but is contributing to the development of best international corporate governance standards at UZ.”

In addition, the project is anticipated to facilitate the implementation of the Corporate Governance Action Plan and encourage better corporate governance at UZ.

EBRD has made a cumulative commitment of nearly €11.7bn for 390 different projects in Ukraine since 1993.