The Czech government has approved a 65 billion CZK (€2.6 billion) loan from the European Investment Bank (EIB) to support the country’s transport infrastructure, with the bulk of the funds allocated to railway development.
Transport Minister Martin Kupka (ODS) announced the decision on Wednesday following a cabinet meeting, calling the loan a cost-effective way to meet urgent investment needs.
According to Kupka, 55 billion crowns will be used for railway projects across the country, while 10 billion will go toward the construction of a key section of the Prague Ring Road, known as segment 511. This section will link the D1 and D11 motorways and is currently under construction, with completion expected in 2027.
“The Czech Republic needs the money to repay its infrastructure debt as quickly as possible,” Kupka said, adding that the EIB loan terms are favorable compared to other financing options. “For each tranche, the Ministry of Finance decides whether it can obtain cheaper financing or whether to opt for an EIB loan. Today, the government has assessed that this loan is currently the best choice.”
While specific railway projects funded by the loan were not named, Kupka highlighted the need to modernize and expand the country’s rail network. The EIB, whose shareholders are the EU member states, provides long-term loans to support strategic projects that align with EU policy objectives.
The infrastructure investment drive is well-timed, ahead of crucial parliamentary elections in October, the polls for which make grim reading for the governing parties.
The SPOLU alliance, comprising Prime Minister Petr Fiala’s Civic Democratic Party (ODS), is trailing former Prime Minister Andrej Babiš’s ANO opposition movement by around 10 percentage points.
With recent controversies, including the recent resignation of Justice Minister Pavel Blažek over a hefty Bitcoin donation by a convicted drug smuggler, hitting the government’s credibility, it needs to offer the electorate as much good news as it can.
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