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EBRD re-allocates $197 million loan to upgrade highway connecting Ukraine and Poland

Surge in traffic amid war prompts upgrades to Ukrainian highway to Poland (EBRD photo)

By Ukraine Rebuild News Staff

The European Bank for Reconstruction and Development has re-allocated 182 million euros ($197 million) from planned works in southern Ukraine to a major highway upgrade in the west of the country as the Russian invasion has shifted transportation patterns.

The loan will be used to improve the condition of the M-09 highway between Lviv, the largest city in western Ukraine, and the town of Rava-Ruska on the border with Poland. The money, from a loan agreed upon in 2020 before the Russian invasion, was originally earmarked for transport works around Ukraine.

“Russia’s war on Ukraine has resulted in disruption to trade via its Black Sea ports, causing the redirection of traffic flows to land routes in western Ukraine that connect to the European Union,” the EBRD said in a press release.

The lender said “traffic intensity has increased significantly since the start of the war” on the highway that connects Lviv to Poland and “there is now an urgent need to improve the condition of the road and make critical road safety improvements, including the installation of barriers to separate traffic and bicycle infrastructure connecting settlements along the road, as well as climate adaptation measures.”

It said the upgrades to the M-09 highway will also reduce the logistics costs of bringing freight into Ukraine and advance a plan to develop “alternative transport routes to facilitate the export and import of vital goods (including agricultural exports and critical imports).”

The 182 million euros was originally part of a 450 million euro sovereign loan meant to be on-lent to Ukravtodor, now known as the State Agency for Restoration and Development of Infrastructure of Ukraine, for works around Kyiv, Odesa and Lviv.

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