WB grants EUR 163M loan to Croatia's railway infrastructure

ZAGREB, 06.05.2015.

Croatia's railway companies - HZ Infrastructure, HZ Passenger Transport and HZ Cargo - on Wednesday signed a EUR 163.5 million loan contract with the World Bank to finance a project for the sustainability of Croatian railways in Europe, HZ Infrastructure executives reported on Wednesday.

Of the total loan amount, almost half or 79 million euros will be allocated to HZ Infrastructure for investment into the railway's infrastructure. Part of the loan, that is 13.7 million euros, will be allocated for employee requirements, either for severance packages or further training.

The interest rate on the loan amounts to 0.44%, which will result in savings on interest in the amount of HRK 97 million, if compared to loans offered by commercial banks, railways authorities said.

The loan was issued after a complex procedure required by the World Bank, setting out criteria that funds be used to prioritise projects that are economically viable and will benefit the railways and its end users.

This involves, for example, securing railway crossings, removing critical points on railways, repairs to trestle bridges and upgrading railway stations.