The state-run company “Calea Ferata din Moldova” (“Moldova’s Railways”) will be partially freed from the obligation of ensuring the repayment of the loan distributed by the Ministry of Finance for implementing the project to purchase locomotives and to restructure the railway infrastructure that is financed by the EBRD. A bill to this effect was approved by the Government, IPN reports.

The loan will be guaranteed by Moldova’s Railways only partially, by securing the locomotives purchased with the loan. Minister of Transport and Road Infrastructure Iurie Chirinciuc explained that the company does not have assets that can be secured as these are fully engaged in freight and passenger transportation.

The company will guarantee 50% of the cost of locomotives and 42% of the total value of the EBRD loan provided for the project, which is €52.5 million.

The signing of the subsidiary agreement between the Ministry of Finance and Moldova’s Railways is a condition stipulated in the financing agreement signed by Moldova with the EBRD. The delay leads to a rise in the commitment fee that should have been paid to the EBRD since March 15, 2015. Owing to the delay in using the loan, Moldova is to pay €328,000 in commitment fee.