Romania’s capital, Bucharest, is set to receive a loan of almost EUR 266 million from the European Investment Bank (EIB) to modernise its urban tram network.

The city will use the funding to renovate around 50km of tram lines. It will also introduce new trams and modernise depots to increase speed, reliability, comfort and accessibility on a network that serves around 500,000 people a day.

By encouraging people to switch from private cars to public transport, the project also aims to ease traffic congestion and improve air quality in Bucharest. The tram network is scheduled to be completed by 2030.

“This investment marks an important step in transforming Bucharest into a greener and more future-proof metropolis. We are proud to support projects that have a lasting impact on both people and the environment,” said EIB Vice-President Ioannis Tsakiris.

The tranche is part of a EUR 300 million loan from the EIB for the development of Bucharest’s infrastructure, which also includes upgrades to the energy system. An initial EUR 34 million tranche covered the energy component of the project, which involves replacing 106 km of district heating pipes to increase efficiency, reduce heat and water losses, and reduce greenhouse gas emissions.

The EIB financing supports a wider EUR 1.3 billion investment programme aimed at improving urban mobility and reducing the carbon footprint of the energy supply in Bucharest, a metropolitan area of ​​over 2 million inhabitants.

“Bucharest needs major investments in its tram lines, which are over 50 years old and no longer cope with the demands of trams. The financing is very important for Bucharest. We will continue this collaboration and accelerate the pace of development of projects that will change the city for the better,” said Bucharest Mayor Ciprian Ciucu, who also attended the signing ceremony.

The EIB loan advances its transport and energy priorities, including support for the 2015 Paris Agreement on combating climate change. Bucharest’s investment programme also benefits from EU funds.

EIB financing also contributes to the EU’s “REPowerEU” programme to reduce dependence on fossil fuels.

The project builds on a partnership between the EIB and the Municipality of Bucharest dating back to 2002. Over the years, the EIB has supported a wide range of initiatives in the capital, including school renovations, water and sewage network upgrades and energy efficiency improvements in public and residential buildings.

In addition to financing, the EIB has provided advisory support in project preparation, including advice on public transport investments and technical assistance for the district heating system. This combined approach has allowed Bucharest to accelerate implementation while maintaining budgetary resources.