EIB weighs new loan to modernise Zagreb’s tram network

The European Investment Bank is examining the possibility of extending a new loan facility to support the renewal and modernisation of Zagreb’s tram network, a move that would build on recent EU-backed investments in public transport across the Croatian capital.

Potential financing builds on earlier EIB support for Zagreb

Publicly available information indicates that the European Investment Bank has intensified its engagement with Zagreb in recent years, combining direct lending and advisory services for large municipal projects. A multi hundred million euro framework loan approved for the city has already been directed to areas such as public transport, energy efficiency and social infrastructure, creating a platform that could accommodate additional tram-related investments.

Reports on EIB activity in Croatia show that these framework arrangements are often designed to be flexible, allowing the city to allocate funds to specific projects as they mature. Within this model, a dedicated allocation for tram acquisition or infrastructure upgrades would be consistent with the bank’s established approach to urban mobility and climate-focused lending in EU member states.

The EIB’s broader portfolio also demonstrates a pattern of support for rail and tram systems across Europe, from high speed rail links to new light rail lines and depot modernisation. This background increases expectations that a proposed loan for Zagreb’s trams would fit within the institution’s existing climate bank roadmap and its emphasis on shifting passengers from private cars to cleaner mass transit.

Although the precise size and structure of any new operation for Zagreb’s tram network have not been publicly detailed, sector observers note that past EIB loans for comparable rolling stock projects in other European cities often range from tens to several hundreds of millions of euro, depending on fleet size and associated infrastructure.

Ageing fleet drives push for new low floor vehicles

Zagreb’s tram system is one of the most recognisable features of daily life in the Croatian capital, but parts of the fleet date back several decades. According to publicly available fleet data, the network still operates older high floor vehicles alongside newer low floor units, creating a mixed standard of comfort and accessibility for passengers.

In recent years the city has launched a gradual renewal programme, including contracts with domestic manufacturer Končar for low floor trams intended to replace some of the most dated units. Local announcements describe the acquisition of new vehicles as the largest modernisation cycle for Zagreb’s urban transport in more than a decade, yet officials have also acknowledged that further investment will be required to fully refresh the fleet.

A potential EIB loan aimed at trams would therefore align with existing municipal plans rather than initiate a completely new strategy. Financing could be used to scale up orders for additional low floor cars, accelerate the withdrawal of life expired vehicles, and improve accessibility for passengers with reduced mobility, in line with European Union transport policy.

Replacing older trams is also expected to reduce maintenance costs and improve operational reliability. New rolling stock typically offers higher energy efficiency, regenerative braking and modern safety systems, features that can lower operating expenses for Zagreb Electric Tram, the city’s public transport operator.

European and national funds underpin green mobility agenda

Zagreb has already secured significant non repayable EU funding to purchase new trams and electric buses, signalling a strong policy orientation toward lower emission public transport. Recent contracts for low floor trams and dozens of battery electric buses were supported through national recovery and cohesion programmes, with Croatian government sources describing them as a milestone in the city’s green transition.

At the same time, a dedicated call for tram modernisation under Croatia’s National Recovery and Resilience Plan identified Zagreb Electric Tram as a key beneficiary, making clear that fleet renewal is a national as well as local priority. The city has framed these investments as part of a broader strategy to decarbonise urban mobility, reduce air pollution and encourage residents to shift away from private cars.

In this context, an additional EIB loan would complement, rather than replace, grant based financing. While grants help cover the upfront cost of new vehicles, long term lending can support the remaining investment needs, associated depot adaptations and network improvements such as power supply upgrades. This blended approach is increasingly common in EU cities seeking to accelerate climate oriented transport projects.

For Zagreb, access to favourable EIB financing terms could also ease pressure on the municipal budget at a time of competing infrastructure demands, including housing, energy and social facilities. By stretching repayment over longer maturities, the bank’s instruments can make large scale fleet renewal more affordable for local authorities.

What the proposed tram loan could cover

While the EIB has not published a detailed breakdown for a potential Zagreb tram operation, recent projects in other European cities offer indications of the types of spending that might be eligible. In similar cases, bank financing has supported the purchase of new tram vehicles, refurbishment of depots, installation of modern signalling and power systems, and upgrades to tracks and stops to improve accessibility.

For Zagreb, priority areas are likely to include additional low floor trams to expand capacity on the busiest urban corridors, as well as the renewal of infrastructure to improve ride quality and reduce noise. Modern depots capable of servicing a more technologically advanced fleet may also require significant investment, including diagnostic equipment and charging or power management systems.

There is also potential for a loan package to incorporate digital elements such as real time passenger information, fleet management software and ticketing upgrades, which can be financed alongside physical assets. These components help increase the attractiveness of tram travel, an important factor in achieving higher ridership and the associated environmental benefits.

Any eventual project structure would need to comply with EU environmental and procurement standards, including requirements on energy performance and life cycle emissions. In previous operations, the EIB has emphasised that financed vehicles and infrastructure must contribute meaningfully to greenhouse gas reduction and resilience objectives.

Implications for visitors and daily commuters

For residents and visitors alike, a modernised tram fleet influences how easily they can move around Zagreb’s historic centre and expanding suburbs. Newer low floor vehicles typically offer smoother boarding, air conditioning and real time information, which can make public transport more attractive for tourists exploring key sights as well as for daily commuters.

Zagreb’s tram routes form the backbone of the city’s public transport system, connecting major railway and bus hubs with business districts, universities and cultural institutions. Any investment that improves frequency and reliability is likely to be felt across the wider urban mobility network, including bus services that feed into tram lines.

Travel sector observers point out that European city break destinations increasingly compete on the quality and sustainability of their transport offer. Cities that can demonstrate clean, efficient and well connected tram networks are often perceived as more visitor friendly, particularly by environmentally conscious travellers who seek to avoid car rentals where possible.

If the EIB proceeds with a loan and Zagreb continues to expand its fleet of modern trams, the city’s reputation as a compact, tram oriented capital could be further strengthened. Over time, that may support not only local climate objectives but also the broader appeal of Zagreb as a European urban destination where car free movement is both practical and comfortable.