The European Bank for Reconstruction and Development (EBRD) has agreed to provide €450m loan to Ukraine’s state road agency, Ukravtodor, for road infrastructure.

The loan amount will be used by Ukravtodor for the rehabilitation of 275km of the M05 Kyiv-Odessa road as well as construction of a new northern bypass around the city of Lviv.

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These two roads are part of the Trans-European Transport Network (TEN-T) and have strategic importance for the country’s domestic and international connectivity, particularly with the European Union.

The funds will also help to enhance Ukravtodor’s procurement system as well as to implement internal controls to prevent corruption and bribery.

This is claimed to be the pilot programme under the Memorandum of Understanding (MoU) signed by the Ukraine government and the EBRD in October to bolster corporate governance in the state sector.

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EBRD Eastern European and the Caucasus managing director Matteo Patrone said: “This cooperation to strengthen anti-corruption measures in the road sector will serve as a pilot – and a litmus test – for a broader anti-corruption and good-governance programme backed by the EBRD and target all Ukrainian state-owned enterprises and public sector entities.”

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The financing for Ukravtodor will comprise three tranches, with the first and third tranches totalling €290m and supporting the rehabilitation of the M05 Kyiv-Odessa road, which connects the capital and the Black Sea ports.

The €160m tranche II will be used to fund the construction of a 24km northern section of the circular bypass around Lviv.

The new bypass road will benefit the people in Lviv with reduced travel time, besides easing long-distance transit traffic on the existing southern bypass and through the city centre.

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Part of Ukraine’s road network, which will benefit from a €450 million EBRD loan to state road agency Ukravtodor. (Credit: European Bank for Reconstruction and Development.)