The European Bank for Reconstruction and Development (EBRD) is providing a €39.9m loan to Kosovo for the modernisation of its international rail link.

The upgrade will improve the connectivity between Kosovo’s railway network with Europe’s Corridor VIII transportation network in FYR Macedonia in the south and Corridor X to the Serbian border in the north.

Kosovo’s national railway infrastructure company Infrastruktura e Hekurudhave të Kosovës (Infrakos) will use the funding to upgrade the country’s only international rail link Rail Route 10.

"This is a high-priority project for Kosovo as the modernisation of Rail Route 10 will bring multiple political and economic benefits to the country."

The project is part of the Western Balkans core railway network, an extension of the Trans-European Transport Networks.

This is the largest EBRD transaction in Kosovo and also the bank’s first investment in the country’s transport sector.

The loan is expected to boost regional integration and support economic development in Kosovo as the modernisation of transport infrastructure will help improve trade routes within the region and develop stronger cross-border cooperation.

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By GlobalData

EBRD will also support project implementation and help in the improvement of asset management practices and track access charges.

The 148km-long Kosovo Rail Route 10 is divided into three sections, the southern section Fushë Kosovë -FYR Macedonian border; the central section Fushë Kosovë-Mitrovicë; and the northern section Mitrovicë -Serbian border.

Work will be carried out in separate stages to rehabilitate and modernise these sections.

EBRD first vice-president Phil Bennett said: "The rehabilitation of Kosovo’s only international rail link is vital for the country’s further integration into regional and international markets. Improved transport links will greatly contribute to enhanced regional and pan-European trade and cooperation."

The project will also be supported by the European Investment Bank (EIB), investment grants provided by the EU, and grants for project preparation and implementation from the Western Balkans Investment Framework.

Kosovo Minister of Finance Avdullah Hoti said: "This is a high-priority project for Kosovo as the modernisation of Rail Route 10 will bring multiple political and economic benefits to the country.

"It is a very important step towards improving national and international trade links and enhancing the efficiency and quality of passenger and cargo transit."