USAID stated this investment aims to aims to lessen Ukraine’s dependency on foreign financial support. Credit: USAID

The United States Agency for International Development (USAID) has announced $225m of investment into alternative export routes for Ukraine.

USAID and JSC Ukrainian Railways (UZ) signed a memorandum of understanding (MoU) to support the construction of a 75-kilometre dual-gauge rail segment that will link the Ukrainian city of Lviv to the Trans European Network for Transport.

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According to USAID, the investment highlights the “critical importance of infrastructure such as rail to Ukraine’s recovery”. USAID also said that it will enable Ukraine’s economic resilience and aims to lessen its dependency on foreign financial support.

Grain export capacity from Ukraine could be raised by 2.5 million tonnes annually through investment in improved land and rail border crossing locations, which could boost exports by up to $425m.

The arrangement aims to strengthen Ukraine’s link to Europe. Due to the European rail network using narrower tracks, fewer trains from Ukraine can enter Europe each day, leading to processes that frequently take more than five hours per train.

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Through USAID, UZ will be able to create a dual-gauge section of railway, facilitating more direct pathways for the return of displaced Ukrainian nationals to their homes and facilitating the transportation of Ukraine’s commodities to the EU.

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Agricultural products may be readily loaded into narrow gauge hoppers or rail carriages and fast-tracked to European ports and markets by linking Lviv to European rail lines.

This investment follows recent funding into expansions of Ukraine’s rail routes. In October 2023, the EIB allocated €12m ($12.63m) to rehabilitate two key sections of railway lines in Moldova, which was set to support a crucial export route for Ukrainian grain.