The European Investment Bank (EIB) has agreed to provide €890m of funding to Adif Alta Velocidad for the high-speed railway line between Madrid and Extremadura in Spain.

The project is part of the Atlantic Corridor, which connects Iberian Peninsula and Central Europe and improves the connectivity between Spain and Portugal.

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The bank said that it has also signed an agreement with Adif Alta Velocidad to provide a loan of €300m, which is the first tranche of a total €890m subsidy, which EIB will provide for the project.

The project also includes funding from the European Regional Development Fund and it will also receive Trans-European Transport Network (TEN-T) support.

The EIB financing will be utilised for the construction of the 282km connection between Talayuela (on the border between the Autonomous Communities of Extremadura and Castilla-La Mancha) and Badajoz (on the Portuguese border).

This will be connecting the cities of Navalmoral de la Mata, Plasencia, Cáceres, Mérida and Badajoz.

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Upon completion, the new railway line is expected to reduce journey times between the Spanish capital and Extremadura, a cohesion region that is home to over one million people.

EIB said that the project will also improve the connection between Spain and Portugal by providing interoperable and efficient freight connections to and from the south of Portugal.

During the construction phase, the project is expected to create approximately 17,000 jobs.

Adif and Adif Alta Velocidad president Isabel Pardo de Vera said: “The high-speed connection with Extremadura is one of the most important projects Adif Alta Velocidad is working on, as it will have a great impact across Spain, the Iberian Peninsula and Europe.

“The significant investment efforts required will help create jobs and enable economic, technological and regional development, which is even more important as the economy begins to recover in the wake of the COVID-19 crisis.”

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EIB provides €890m to finance high-speed rail line between Madrid and Extremadura. (Credit: ADIF/ EUROPEAN INVESTMENT BANK.)