The EU is to improve its transport links with the Ukraine by building a 1.8km twin-track railway tunnel through the Carpathian mountains.
The Beskyd link will replace a single-track tunnel between Lviv in the western Ukraine and the Hungarian and Slovak borders.
The European Investment Bank (EIB) is to lend $75m to finance the construction of the tunnel. EIB Vice-President LászlÃ³ Baranyay, who is responsible for lending operations in Ukraine, commented that the financing was helping "the integration between Ukraine and the European Union".
The EIB has agreed to loan the Ukraine about $2.9bn for projects in the energy, transport and water sectors. Baranyay has said in the next three years the EIB would be spending a total of $4.1bn "to support the development of Ukraine and its economy".
Relations between the Ukraine and the EU have been at the heart of the recent turmoil in the region. The protests that toppled president Viktor Yanukovich in February were triggered by his decision not to sign a trade agreement with Europe.