By Rezo Bitsadze

Together with the Government of North Macedonia, the European Union (EU), including its bank — the European Investment Bank (EIB) — and the European Bank for Reconstruction and Development (EBRD) have announced a €560 million(US$616.7million) financial arrangement through Team Europe for the third phase of the Eastern section of the Corridor VIII rail network. Provided under the Global Gateway initiative, the funds will enable 24 km of railway line to be built between Kriva Palanka and the border with Bulgaria, and 88 km of track between Kumanovo and the border to be electrified. Once completed, the new rail line will be able to transport about 500 000 tonnes of freight and half a million passengers a year, contributing to better connectivity, climate resilience and socioeconomic development in North Macedonia and the region.

For this pivotal rail section, the Team Europe financing package consists of a €175 million loan from EIB Global (the arm of the EIB for activities outside the European Union), a €175 million loan from the EBRD, a €150 million EU grant channelled through the Western Balkans Investment Framework and up to €60 million in the form of an Instrument for Pre-accession Assistance grant. The project has and will continue to benefit from EU and EIB technical support, including through the JASPERS programme, for the preparation, tendering and implementation.

EIB Vice-President Kyriacos Kakouris, who is responsible for operations in North Macedonia, said: “We are proud to act as a leading financial institution for this project that entails the largest ever EU grant allocated for North Macedonia under the Western Balkans Investment Framework. It is a good example of the variety of financial and technical support that the Bank provides. The substantial financial package earmarked for this project demonstrates that with firm commitment and partnerships under the Team Europe approach, we can advance vital infrastructure projects that bring tangible benefits for regional economies and people. The new railway line will accelerate the country’s reforms in the railway sector, facilitate broader regional integration and enable North Macedonia to benefit further from upcoming European Commission initiatives such as the new Growth Plan. Finally, it will contribute to a more environmentally sustainable transport system in North Macedonia, enabling a gradual shift from road to rail in line with the European Union’s and the country’s climate aspirations.”

EBRD First Vice President Jürgen Rigterink said: “We are delighted to once again collaborate with the EIB and EU on a significant railway infrastructure project in the region. This marks the final phase of the eastern segment of Rail Corridor VIII, a crucial part of the EU Core TEN-T network. This section will connect two existing EBRD-funded portions currently under construction. Upon completion, it will efficiently facilitate international movement of goods and people, reducing the railway distance to the Black Sea and Türkiye by approximately 200 km. The project aims to streamline traffic, enhance safety, and ensure reliability for both passengers and freight, fostering business growth and development opportunities along the railway line and near stations. Furthermore, it will contribute to improved environmental conditions in surrounding communities, settlements, and regions.”

Minister of Finance Fatmir Besimi expressed his gratitude to the European Union, EIB and EBRD for their extended support, which will make it possible to complete this decade-long project.

“Funds the Government has provided from the EIB and EBRD — as well as the grant from the European Union — are unquestionably crucial for completing this project, which was launched many years ago. Its implementation will make it possible to improve railway infrastructure, creating better working conditions for companies, enabling easier transportation of both goods and passengers, and encouraging development. This project is part of the planned investment cycle to be implemented in the upcoming period through the public sector, and is also a driving force of economic growth,” Minister said Besimi.

As part of the strategic Trans-European Transport Network, the new section of rail on Corridor VIII will provide a smooth link between Sofia and Skopje, reducing vehicle operating costs, traffic congestion and pollution, and improving safety. This will make the regional rail system more appealing and competitive for longer-distance freight and passenger transport.

Head of Delegation to the Republic of North Macedonia David Geer remarked: ““The European Union is supporting North Macedonia to develop a functional and modern railway system, which will provide better connectivity, quality of life and increase economic development opportunities for the citizens. Integrating the railways into the country’s transport network is one of the EU’s priorities to ensure efficient, energy smart and climate-friendly ways to move people and freight across the European continent.”

Over the last ten years, the EIB has supported the rail sector globally with more than €39 billion of investments, helping to build or upgrade almost 2 000 km of track and hundreds of stations. In the Western Balkans, EIB Global is a lead financier of strategic railway routes and a provider of technical and advisory assistance. To date, the Bank has invested over €1.6 billion in the rail sector, supporting regional cooperation and connectivity.

The EBRD is the key strategic partner of the Western Balkans countries supporting their efforts to rebuild railways and promoting the shift from road to rail as a greener mode of transport. The Bank provides finance and comprehensive policy support aimed at improving the governance and management of national railway companies. To date, the Bank has lent over €1.6 billion to the Western Balkans countries to finance investments in the rail sector.