The European Bank for Reconstruction and Development (EBRD) has agreed to provide a loan of €450m loan to Ukravtodor, Ukraine’s state road agency for improving road infrastructure in the region.

The loan will be used by the agency for rehabilitating sections of the M05 Kyiv-Odessa road and the construction of a new northern bypass around the city of Lviv.

Both the projects are part of the Trans-European Transport Network (TEN-T), which focuses on improving Ukraine’s domestic and international connectivity, especially with the European Union (EU).

Ukraine Prime Minister Denys Shmyhal said: “The European Bank for Reconstruction and Development consistently supports investment projects in Ukraine and the government is grateful for this partnership.

“We are interested in infrastructure development not only because it makes people’s lives more comfortable, but it also creates a multiplying effect for economic growth.”

EBRD will be providing the funds in three tranches to Ukravtodor.

In the I and III tranches, EBRD will be offering a total of €290m, which will be used for rehabilitation of 275km of the M05 Kyiv-Odessa road, which connects the capital and the Black Sea ports.

This section of the highway is said to be part of TEN-T Corridor IX, which is considered as an arterial road connecting northern and southern Europe.

In the Tranche II, EBRD will be offering €160m for constructing a 24km northern section of the circular bypass around Lviv, the largest city in western Ukraine.

Currently, the city has four international highways passing through it, of which two are part of TEN-T Corridors III (Brussels-Kyiv) and V (Venice-Kyiv).

Upon completion, the project is expected to reduce the travel time for the people living in the city of Lviv, while the new bypass is expected to relieve long-distance transit traffic running on the existing southern bypass and through the city centre.

EBRD funds will also be used to fund strategic road safety assessments across the national road network, and also for introducing new systems to manage the impact of overweight vehicles.

Additionally, EBRD’s financing used for fighting corruption with procurement and anti-corruption reform.

Ukravtodor initiated the anti-corruption programme with the EBRD earlier this year.

EBRD Eastern European and the Caucasus managing director Matteo Patrone said: “This cooperation to strengthen anti-corruption measures in the road sector will serve as a pilot – and a litmus test – for a broader anti-corruption and good-governance programme backed by the EBRD and target all Ukrainian state-owned enterprises and public sector entities.”