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Bulgaria to infuse up to BGN 600m into railways through World Bank loan17.12.2010Bulgaria will pour up to BGN 600 million into its state-owned railway firms BDZ and National Railway Infrastructure Company (NRIC) under a memorandum of understanding signed with the World Bank on Wednesday.
The finance will not be used for investments but will go for the repayment of the two entities` existing arrears, including their loans to German Kfw and the Bulgarian Development Bank.
The major portion of the funds, BGN 460 million, will be provided to railway operator BDZ, which are intended to bring back to life the indebted company. In turn, NRIC will get up to BGN 140 million to purchase new equipment and rolling stock.
The credit will be extended to the country, which will first need to obtain an approval from the European Commission to provide state aid to the companies.
"The memorandum obliges the government to maintain a financially stable railway sector and to observe a strict fiscal discipline," Transport Minister Aleksandar Tsvetkov said.
Source: Dnevnik