EIB-funded urban public transport projects in Ukraine: Lessons from Ternopil and Lutsk

by CEE Bankwatch

Over the past decade, the European Investment Bank (EIB) has provided significant financial support for the modernisation of Ukraine’s urban transport systems through two major projects: Ukraine Urban Public Transport (2017–2025) and Ukraine Urban Public Transport II (2022–2027).

Focusing on medium-sized and large Ukrainian cities, both projects aim to improve service frequency and sustainability while reducing costs, accidents, emissions and greenhouse gases through a shift to electric transport. However, meeting these strategic objectives has been held back by systemic implementation challenges and limited progress on environmental protections.

The modernisation of public transport in Ternopil and Lutsk highlights systemic issues with the renewal of electric transport and the upgrading of transport infrastructure.

In Ternopil, budgetary funds were primarily directed towards bus acquisitions. The city’s first subproject provided for the purchase of diesel buses, which has still not been implemented, while the second subproject focuses on trolleybuses but lacks funding for accompanying infrastructure measures.

In both of Lutsk’s subprojects, the primary focus is on renewing the trolleybus fleet: the city’s first subproject allocates only minimal funding for infrastructure modernisation, and the second provides none at all. Implementation of the subprojects in both cities has been further complicated by significant delays in negotiations, tendering and procurement procedures, as well as non -compliance with EIB requirements to develop and approve respective sustainable urban mobility plans. As a result, the subprojects are being implemented solely in accordance with national legislation.