The European Investment Bank (EIB) said on Monday that it is lending approximately $75 million to finance a new twin-track railway tunnel on the Eastern Partnership regional network in Ukraine to improve transportation between the country and European Union countries.

The Eastern Partnership transport network was endorsed last year by the transport ministers of EU member states, Eastern Partnership countries and the European Commission.

"The EIB is sending a strong message by providing a loan to Ukraine that will finance the upgrading of interconnections along a crucial transport corridor that is of the utmost importance for the further deepening of the integration between Ukraine and the European Union," EIB Vice President Laszló Baranyay said. "At the same time, this is the first EIB loan supporting the railway sector in Ukraine, so contributing to the development of an environmentally friendly mode of transport. This project is in line with the intention of the EIB announced earlier this year to provide lending in Ukraine amounting to some $4.1 in the coming three years to support the development of Ukraine and its economy and foster deeper integration with the EU."

The new tunnel will be located in the Carpathian Mountains at Beskyd in southwest Ukraine. It will replace the existing single-track tunnel--the only single track section on the corridor between Lviv and the Hungarian and Slovak borders. It is expected to add significant transport capacity to the international raid corridor, which has been plagued by bottlenecks.