Rail Baltica explores public-private partnership model following CEF funding successes

Rail Baltica has announced that it is actively pursuing the implementation of a Public-Private Partnership (PPP) model to accelerate the project’s development and reduce the financial burden on state budgets. This initiative gains relevance in the wake of the recent funding allocations under the Connecting Europe Facility (CEF), where the Porto-Lisbon High-Speed Rail (HSR) project received €813 million – the largest amount in the funding round – slightly surpassing Rail Baltica’s award.

The Porto-Lisbon HSR project has set a significant precedent for Rail Baltica by demonstrating how CEF funding can be successfully combined with a PPP structure to bridge financing gaps in large-scale rail projects. Other notable European high-speed rail projects, such as the Lyon-Turin High-Speed Rail project and the Brenner Base Tunnel, have also employed PPP models effectively, attracting substantial private investment and enabling more efficient development processes. These examples highlight the potential of PPPs in delivering complex, cross-border infrastructure projects within the European Union.

Pēteris Celms, Investment Development Manager at RB Rail AS, said: “Our team is currently assessing which sections of the Rail Baltica project would be most suitable for a PPP approach, ensuring that we maximise the benefits of private sector involvement while delivering on our strategic objectives.”

Rail Baltica hosts future Changemakers Academy students for two-day experience

Initial discussions with potential investors have shown strong interest, indicating the potential viability of integrating PPPs into the Rail Baltica project. The use of PPPs not only aligns with broader trends in European infrastructure development but also reflects Rail Baltica‘s commitment to completing this economically and strategically important initiative. By fostering collaboration between public entities and private investors, the project aims to leverage innovative financing solutions to drive progress while minimising financial risks.

However, the implementation of PPPs in the Baltics presents unique challenges, including the need to adapt to more unified regulatory environments, balance risk distribution between public and private sectors, secure long-term political commitments, and attract international financiers. Despite these challenges, Rail Baltica’s exploration of the PPP model remains a promising approach to infrastructure development in Europe.

In the latest CEF call, Rail Baltica has been granted an additional €1.2 billion for construction activities across the three Baltic States, with €346 million specifically allocated for Latvia. With this latest round of funding, the total investment in Rail Baltica has surpassed €4 billion. The project is expected to generate direct net benefits worth €6.6 billion and boost GDP growth by 0.5% to 0.7% across Estonia, Latvia and Lithuania, contributing between €15.5 billion and €23.5 billion in indirect benefits throughout its lifecycle. The first phase of Rail Baltica is projected to be completed by 2030, with an estimated cost of €15.3 billion.