Back to rail at the start of the Western Balkans’ green transition

Back to rail at the start of the Western Balkans’ green transition
Transport ministers from across the region signed the Dedication to Rail at the Western Balkans rail summit organised by the EIB and EBRD. / WBIF
By Clare Nuttall in Glasgow December 13, 2021

The damage caused by war followed by decades of under-investment have made the railway networks of the Western Balkans an unappealing option to many of the region’s residents, who opt instead to travel by car, bus or air. Now, however, governments are looking anew at rail transport as a way to improve transport links while also reducing emissions as they embark on the green transition. Matteo Rivellini, head of division in charge of lending operations in Slovenia, Croatia and the Western Balkans at the European Investment Bank (EIB), explains what is happening to support the development of rail transport in the region. 

Matteo Rivellini, head of division in charge of lending operations in Slovenia, Croatia and the Western Balkans at the European Investment Bank (EIB). Source: EIB

Rail — and especially electric trains powered by renewable energy — is one of the most environmentally ways to travel. Rivellini compares the emissions for the journey from Luxembourg to Paris, a distance of 287km as the crow flies — similar to the distance from Belgrade to Podgorica or Tirana to Nis, Serbia — by air, car and train, finding that the electric train journey generates dramatically lower emissions.

According to the EIB’s calculations, 829 MJ, the equivalent of 29 litres of petrol, is needed to fly from Luxembourg to Paris, producing 72 kg of CO2 per passenger. A car would require 629 MJ or 20 litres of petrol, resulting in 55 kg of emissions. A train journey, by contrast, would require only 84 MJ of energy and produce 3 kg of CO2 per passenger. 

“We can clearly see the connection between the use of rail and the reduction in air pollution and greenhouse gas emissions, which is why it is one of the most climate-friendly forms of transport responsible for less than 0.5% of transport-related greenhouse gas emissions in the European Union,” says Rivellini. 

“This is due to its high energy efficiency and significant share of electrification, making it one of the most sustainable forms of passenger and freight transport. Among other benefits, rail transport is also exceptionally safe, connecting people and businesses across the European Union via the trans-European transport network. Despite these advantages, only about 7% of passengers and 11% of goods travel by rail, which is why it is important to continue raising awareness of the environmental benefits of rail,” he adds. 

Lack of investment

In recent decades, car ownership in the region has shot up, while rail transport has languished, suffering from a lack of investments. Many of the international routes that used to connect the region have been cut. “There are several reasons why these train services were discontinued or reduced. Passenger demand for travel in the Western Balkan region was certainly affected by the conflicts that occurred in the 1990s. Underinvestment in infrastructure and rolling stock also made these services less attractive, especially taking into account the investments made in roads and the increase in the motorisation rate, or the number of cars per inhabitant,” Rivellini comments. 

This is confirmed by bne IntelliNews’ own correspondents in the region. In North Macedonia, rail transport is not very popular and people use buses more often, according to bne IntelliNews’ correspondent in Skopje, a situation that is typical of the region. “The reasons are that passenger service within the country is quite slow, and trains and stations are often poorly maintained. Also, there are only six operational lines, five of which are local ones. Regarding the international transport there is only one railway connection — with Kosovo’s capital Pristina,” she explains. The major railway axis that ran from Munich to Athens via Macedonia has not been operational for decades. A railway link from Skopje to Thessaloniki was still in use until recently, but in 2016 Greece closed its borders to railway traffic following an operation by the Greek police to evacuate migrants and refugees from a camp on the border, which blocked the tracks after Macedonia closed its borders to illegal crossings. Freight and passenger railway traffic to Greece remain at a standstill, and the Belgrade-Skopje-Thessaloniki route is now no longer operational. 

It’s a similar situation in Bosnia & Herzegovina, where bne IntelliNews’ Sarajevo correspondent describes the situation as “very bad”. “There is a bit of train traffic in Bosnia, but very few people use it. They recently purchased new Talgo trains, but they run on the Sarajevo-Hadzici route, a distance of just 19.7 km,” he says. “People travel mostly by car, and bus transportation is far more prevalent than train.”

Dedication to Rail 

Nonetheless, things are changing and in September transport ministers from across the region signed the Dedication to Rail at the Western Balkans rail summit organised by the EIB and European Bank for Reconstruction and Development (EBRD). “Building a modern, digitalised rail network with direct express train connections between major cities in the region [that] will help establish better connectivity and provide a safer and more environmentally sustainable mode of transport for people and businesses in the Western Balkans” was recognised as the priority in the dedication, according to the EIB’s statement on the event. 

Commenting on the dedication, Rivellini says: "The Dedication to Rail is essential for creating efficient, climate-friendly and fast transport links within the region and the European Union, as well as for promoting multimodal transport solutions and modal shift. This should result in reduced transport-related pollution and better connections in the region.”

According to the banker, the event “paved the way for the introduction of sustainable, efficient and fast transport links in the region, symbolising successful cooperation between all parties involved”. It also reinforced the EIB’s collaboration with the EBRD in this area; the two institutions have jointly supported numerous projects in the transport sector. 

The dedication was signed almost a year after the European Commission adopted the Economic and Investment Plan for the Western Balkans in October 2020. Aimed at supporting the long-term economic recovery of the region, it identifies priorities including supporting major road and railway connections. The document “outlines the importance of building a sustainable transport network and upgrading existing infrastructure, with the objective of bringing the core network up to EU standards and helping to address the current environmental and social needs that have arisen as a result of climate change, the COVID-19 pandemic and the new digital era,” Rivellini says. 

All six states from the region hope to join the European Union, where the transport sector currently accounts for around 25% of greenhouse gas emissions, but under the European Green Deal the target is to reduce transport emissions by 90% by 2050. Rail is an important part of this as rail transport currently contributes only 0.4% of the sector’s emissions. The Western Balkans countries have further to go than their EU counterparts, as not only does rail infrastructure need updating in the region, but also less than one-third of railway lines are electrified. This is in contrast to the EU, where 75% of total train-kilometres are travelled by electric-powered trains. 

Commenting on the other challenges ahead, Rivellini says: “The challenges will be to improve information systems based on new digital technologies, prioritise traffic safety, implement maintenance schemes and replace the existing infrastructure and fleet.”

Investing in the region 

An electric locomotive in Serbia. Source: Serbian Railways. 

So far, the EIB has invested almost €650mn in the rail sector of the Western Balkans. Its “priorities include the electrification and modernisation of major routes and the replacement of diesel with electric traction, which are key to reducing noise, air pollution and CO2 emissions,” says Rivellini. 

“Our projects support the green and digital transition, paving the way for more sustainable transport and a more sustainable economy in the region,” he adds. As well as acting as the lead financier of strategic railway routes, the EIB also provides technical assistance to help prepare projects. 

“As one of the leading financiers of rail projects in the Western Balkans, the EIB is eager to step up its support for this key sector. In addition to projects that are already in the implementation phase, the EIB is helping the relevant rail infrastructure managers to prepare investments so that they meet the trans-European transport network compliance standards on the core networks in the Western Balkans,” comments Rivellini. 

Looking at specific projects in the region, the EIB is already financing the Nis–Dimitrovgrad railway project in Serbia. The project, which includes the renewal and electrification of the Sicevo–Dimitrovgrad section and the construction of a new electrified bypass around the city of Nis, is supported by a €134mn EIB loan and a €73mn EU grant. Prime Minister Ana Brnabic recently commented that Nis is gradually becoming a road, rail and energy hub.

The EIB is also providing technical assistance for project preparation on several rail sections in Serbia including Nis-Presevo, Stara Pazova-Sid, Stalac-Kraljevo-Rudnica, and the Belgrade western bypass. 

In Montenegro, the EIB is financing the modernisation of the Bar-Vrbnica rail line. This project “will create around 1,900 jobs during the repairs. It will improve trade links and help increase freight volumes from 1.2mn tonnes to over 2 million tonnes, thus supporting increased trade in the Port of Bar,” according to Rivellini. Meanwhile, the EBRD is lending €25mn to Montenegro including to replace some of its 50-year-old passenger trains. 

Elsewhere in the region many more projects are underway with support from the EIB and another international financial institutions (IFIs). They include sections of Corridor Vc that runs from the Hungarian capital Budapest through Croatia and Bosnia and ends again in Croatia, at the Adriatic town and major seaport of Ploce. Within this corridor, a railway section in Bosnia’s Republika Srpska is being upgraded with support from the EIB, EBRD and the European Union’s Western Balkans Investment Framework. 

In North Macedonia, new locomotives and freight wagons have already been purchased in recent years, and the covenant has pledged to speed up the construction of a railway line with neighbouring Bulgaria as part of Corridor VIII, which stalled for years because of a lack of funds. The newest project of North Macedonia’s railway infrastructure company, ZRSM-Infrastructure, is to complete the construction of the railway connection from Skopje to the international airport near the capital by the end of 2023 at the earliest. Currently, passengers can reach the airport, which is about 25 km away from downtown Skopje, by shuttle bus or taxi. 

Albania is preparing to rebuild the railway line between its two biggest cities, the capital Tirana and the pot of Durres, in a project supported by the EBRD and the EU’s “Connectivity Agenda for the Western Balkans” and the WBIF. There are also ambitions to extend a line from Durres to Kosovo’s capital Pristina.

The station at the Albanian port city of Durres.