The Asian Infrastructure Investment Bank (AIIB) is set to extend its $300m loan to Russian Railways (RZD), which owns and operates the country’s integrated national passenger and freight railway network.

The latest move comes to help alleviate the temporary liquidity constraints that are caused due to the drop in long-haul passenger transportation amid the Covid-19 outbreak.

With this loan from AIIB, RZD will be able to preserve jobs and the working conditions of its employees while ensuring continuous operations.

AIIB investment operations vice-president Konstantin Limitovskiy said: “With this project, AIIB contributes to the support for railway transportation services, which remain a socially significant and the most affordable means of transport for millions of citizens, and an efficient way to transport large quantities of goods and freight.

“AIIB’s commitment to sustainability has to go beyond just the infrastructure itself. It must also account for the people, both those who provide and those who depend on its services.”

Russia’s railway system covers 85,500km of track and its routes transport passengers across large distances, as well as connect to busy seaports that service Asia and Europe.

The rail routes also contribute to the country’s domestic and foreign trade.

Due to the negative impacts of the pandemic, Russian Railways’ long-haul passenger rail operations in Russia have been severely affected.

RZD’s decline in passenger turnover reached 70% in some months.

Funded by the AIIB Crisis Recovery Facility, the project aligns with the bank’s commitment to supporting infrastructure clients in responding to the Covid-19 crisis.