The European Bank for Reconstruction and Development (EBRD) is lending €100m to Zeleznice Srbije, a Serbian state-owned railway company, to replace the old passenger fleet with new trains and improve quality, service frequency and competitiveness.

In addition, Zeleznice Srbije will receive finance from European Investment Bank (EIB) for renovating core network track. This includes Corridor X, running from Croatia to Hungary and its connection to Montenegro, and a line connecting Belgrade with the port of Bar in Montenegro.

EBRD Business group director for infrastructure, Thomas Maier said: “Continued investments to boost the company’s operating performance will aid the process of restructuring the rail sector in Serbia and promote the overall economic growth of the country.”

Participation of both banks in reshaping the Serbian rail sector will lead to increased passenger numbers, enhanced competition and private sector participation.

Serbian Railways received the first loan from EBRD in cooperation with EIB in 2001, for the refurbishment of electric locomotives and a railway restructuring programme. The objectives were continued with a second loan of €60m in 2006 for the purchase of 750 freight wagons.

EBRD has committed more than €1bn to 83 Serbian Railways projects to date.