EU Mobilizes EUR 1B for “Solidarity Lanes” With Ukraine

The European Commission, Czechia, Poland, Romania, Slovakia, Republic of Moldova, Ukraine, the European Investment Bank, the European Bank for Reconstruction and Development, and the World Bank Group signed a joint declaration providing for nearly EUR 1 billion for supporting “Solidarity Lanes” on the borders between Ukraine and the EU member states.

That’s according to the European Commission press service, Ukrinform reports.

The main goal of Solidarity Lanes, established on May 12, 2022, in response to the Russian aggression toward Ukraine, is contributing to exports of Ukrainian grain to global markets and mitigating the effect of the global food crisis.

The European Commission will urgently dedicate EUR 250 million of grants to boost the Solidarity Lanes. For the short-term, we will support quick improvements, in particular with mobile equipment, to reduce waiting times and improve movement through the border crossing points and their access routes. For the medium-term, we are mobilizing the Connecting Europe Facility (CEF) and EUR 50 million to support the infrastructure developments needed to increase further the capacity of the Solidarity Lanes.

Working with partner Financial Institutions such as the European Investment Bank, the European Bank for Reconstruction and Development, and the World Bank, the participants want to ensure liquidity for operators, and funding of repairs and capacity increases.

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The European Investment Bank plans to invest up to EUR 300 million by end-2023 on projects that respond to the Solidarity Lanes objectives. This is on top of the activity already announced and financed [1] in Ukraine, a significant part of which is dedicated to road and railway upgrades. In addition, the European Investment Bank and the European Commission are making available the technical expertise of Jaspers (Joint Assistance to Support Projects in European Regions) for the identification and preparation of cross-border transport projects to be financed under the CEF, which can attract potential EIB co-financing.

The European Bank for Reconstruction and Development intends to invest EUR 300 million in favor of Solidarity Lanes over 2022-2023 – part of which will go to projects already identified and in the process of being approved.

The World Bank Group, in addition to its regional transport modeling, rapid damage assessment to identify priority repairs and recovery investments as well as ongoing work on trade and logistics, is preparing an emergency project to undertake repairs of the railway and road infrastructure damaged by the war with up to USD 100 million targeted for disbursement in 2023. Rehabilitation of railway infrastructure and multi-modal logistics in Romania and the Republic of Moldova to Ukraine’s borders is under discussion to support Ukrainian critical exports and imports, and lay foundations for reconstruction.

The signatories also call on their international partners to provide further financial support to these actions, which are essential for Ukraine, the Republic of Moldova and for global food security.

It is noted that Ukraine, as one of the world’s largest grain producers, normally supplied around 45 million tonnes of grain to the global market every year. “However, in its brutal war against Ukraine, Russia deliberately targets agricultural production and exports, blocking safe passage to and from Ukrainian Black Sea ports and building up stocks in grain silos,” the document reads. “This has driven up world cereals prices, created food insecurity globally and put at risk the livelihoods of millions of people who rely on those grains.”

Since the inception of the Solidarity Lanes, more than 15 million tonnes of Ukrainian agricultural goods (grain, oilseeds and related products) have been exported, by road, rail and through Black Sea and Danube ports. In addition, since August, the Black Sea Grain Initiative has helped relaunch grain shipments from Ukraine’s Black Sea ports, thereby further reducing food prices globally.

Together these initiatives have allowed the export of about 25 million tonnes of Ukrainian grain, oilseeds and related products between May and end of October to world markets, including to the countries most in need.

The Solidarity Lanes are currently the only option for the export of all other, non-agricultural Ukrainian goods to the rest of the world and for importing all the goods it needs, such as fuel and humanitarian assistance. As such, the Solidarity Lanes have become the lifeline of Ukraine’s economy, bringing back more than EUR 15 billion of much-needed income to Ukrainian farmers and businesses.

The EU has been working with Member States, Ukraine and the Republic of Moldova, international partners and companies, as well as transport operators, to improve the functioning of the Solidarity Lanes. As bordering EU Member States, Poland, Romania, Slovakia and Hungary, have made tremendous efforts and investments to facilitate these trade routes.

The Solidarity Lanes have become an indispensable link for deepened relations with Ukraine and the Republic of Moldova, and are essential to establish a more stable connectivity with the EU in view of future accession. They bring Ukraine and the Republic of Moldova closer to the EU single market, while keeping both countries connected to the rest of the world.

However, it is noted, the Solidarity Lanes are reaching their capacity limits, bottlenecks persist and logistics costs are high. To sustain and further increase the capacity of the Solidarity Lanes, we have been mobilizing significant investments through various existing EU and national programmes. Administrative and operational facilitation needs to continue, including on streamlining border crossing procedures, and more funding is needed.

As reported, after invading Ukraine on multiple fronts, Russia blocked the country’s Black Sea ports, which put to a halt agricultural exports to the global market. Russia has been stealing Ukrainian grain in the temporarily occupied territories and deliberately destroying Ukrainian silos with produce already prepared for export. Such actions on the part of Russia led to a global food crisis and a sharp increase in world food prices. The EU established “Solidarity Lanes” on Ukraine’s land borders as an alternative route for the country’s agricultural exports.