Purchase of 20 Korean-made high-speed electric trains

The project involves the acquisition of JSC "Ukrzaliznytsia" 20 new Korean-made high-speed electric trains at the expense of a soft loan from the Economic Development and Cooperation Fund of the Export-Import Bank of Korea (hereinafter – EDCF).

Given the urgent need for an updated fleet of passenger rolling stock, in particular electric trains, to ensure safe and uninterrupted interregional and international rail passenger transportation, JSC "Ukrzaliznytsia" is interested in purchasing 20 new Korean-made high-speed electric trains at the expense of an EDCF soft loan and receiving loan funds on soft terms.

The purpose of the project is to renew (qualitatively increase) the fleet of high-speed electric trains of JSC "Ukrzaliznytsia" for interregional and international rail passenger transportation.

The amount of necessary investments in the project is about 450  million dollars. USA.

The financing of the project is planned to be carried out at the expense of loan funds in accordance with the Framework Agreement between the Government of Ukraine and the Government of the Republic of Korea regarding loans from the Fund for Economic Development and Cooperation for 2024-2029, which will provide for the provision of a loan on the following terms:

Loan amount – about 450 million dollars. USA

The term of the loan – 40 years (the first 10 years – preferential: only interest is paid, the body is not paid)

Interest rate on the loan – 0.05% per annum

Interest rate under the contract in favor of MFI (state guarantee) – 0.5% per annum

Volume of purchase – up to 20 electric trains

Base price – about 15.9 million dollars. USA per unit (with adjustments for each batch)

Supplier – Korean manufacturer (to be determined according to EDCF requirements)

Creditor – EDCF

The borrower – JSC "Ukrzaliznytsia"

Subject of project implementation – JSC "Ukrzaliznytsia"

Expenses related to servicing and repaying the soft loan will be covered by Ukrzaliznytsia JSC. due to the additional profit generated as a result of the operation of the new rolling stock.

Implementation of the project will not have an impact on the environment. Unscheduled environmental protection measures are not foreseen. If risks of negative impact on the environment are identified, comprehensive measures will be taken to prevent negative consequences. In general, the operation of the new generation of electric trains is more environmentally friendly than the operation of old models.

The project corresponds to the strategic and program documents of the state, in particular:

• National transport strategy of Ukraine for the period until 2030, approved by the order of the Cabinet of Ministers of Ukraine dated 30.05.2018 No. 430-r, which provides for the provision of innovative development of the transport industry through the use of high-tech rolling stock on railways, roads and waterways (ensuring the development new types of transport – electric cars, high-speed trains, etc.);
• Plan of measures for the implementation of the National Transport Strategy of Ukraine for the period until 2030, approved by the order of the Cabinet of Ministers of Ukraine dated 04.07.2021 No. 321-r;
• The Plan of Ukraine, approved by the decree of the Cabinet of Ministers of Ukraine dated 18.03.2024 No. 244-r "On the approval of the Plan of Ukraine", which provides for the purchase of rolling stock, in particular up to 20 electric trains of the "Intercity+" type;
• Agreement between the Government of Ukraine and the Government of the Republic of Korea regarding loans from the Economic Development and Cooperation Fund dated September 13, 2023, ratified by the Law of Ukraine dated December 21, 2023 No. 3533-IX;
• Framework agreement between the Government of Ukraine and the Government of the Republic of Korea regarding loans from the Economic Development and Cooperation Fund for 2024-2029 dated 04/19/2024 (submitted for ratification by draft law No. 0278 of 06/05/2024).

Indicators of economic efficiency of the project:

- reducing the need for passenger rolling stock due to increasing mileage and reducing the number of trains;

- reducing the need for traction rolling stock due to the release of direct and alternating current locomotives and diesel locomotives;

- increasing the efficiency of the use of rolling stock;

- reduction of operational costs by almost 27% and energy consumption by at least 40%;

- reduction of the number of service personnel due to the high reliability of the innovative rolling stock compared to the existing one;

- reduction of investment needs for renewal of worn-out railway passenger rolling stock due to renewal with innovative rolling stock of a new generation;

- reducing the need for petroleum products and, as a result, reducing the country's dependence on foreign economic factors;

- increasing the competitiveness of railway transportation;

- increasing the share of railway transport in the transportation of passengers in interregional and interstate traffic;

- avoiding dependence on the supply of material and technical resources from the CIS countries.

Indicators of social efficiency of the project:

- ensuring the stability and rhythm of passenger transportation and the safety of train traffic;

- increasing the safety level of passenger transportation;

- ensuring a high level of comfort for the transportation of passengers in the newest railway rolling stock;

- significant reduction of travel time (by 2-5 hours depending on the distance);

- preservation of existing and creation of new jobs for specialists and specialists involved in the operation and maintenance of rolling stock;

- ensuring reliable transport connections between all regions of the country;

- reduction of environmental pollution thanks to the wide use of environmentally friendly technologies in passenger transportation by rail;

- significant reduction of the negative impact on the environment due to significantly lower consumption of conventional fuel by high-speed railway rolling stock per 1 passenger-kilometer, almost 8 times compared to road transport and 10 times compared to air transport;

- introduction of innovative technological solutions; - improvement of the image of Ukraine as a country that uses modern transport technologies;

- increasing the passenger capacity of rolling stock and the mobility of the population.