MOSCOW, July 15 (RIA Novosti) - The European Bank for Reconstruction and Development (EBRD) has approved a $500 million long-term loan to Russian Railways (RZD), the top European lender said on Wednesday.
"This would allow the state-owned railway to restructure its balance sheet and support the completion of reforms of the world's second largest rail system despite the economic crisis and market contraction," the EBRD said.
The 10-year unsecured loan facility would be the largest single investment since the EBRD was founded in 1991. The transaction brings the amount invested by the EBRD in nine Russian rail projects to nearly $1.2 billion following the Russian government's decision in 2001 to launch a structural reform of the country's railway system, the bank said.
"This loan would be closely tied to the ambitious reform goals that RZD and the government have set themselves, including restructuring of freight operations and improving sector regulation," the EBRD said.
Commenting on the loan approval, EBRD Business Group Director for Infrastructure Thomas Maier said that the bank, which has been deeply involved in Russian reform programs, was proud to participate in the process.
"By providing these long-term funds to RZD, the bank is contributing to a more efficient match between the assets and liabilities of Russian Railways, thus freeing up resources for the priority goal of upgrading the rail network," Maier said.
