EIB vice-president Andrew McDowell said: “High-quality efficient services and modern reliable trains are all important to persuading travellers to switch to rail.

“We are therefore particularly pleased to have ÖBB-PV as a substantial new partner in realising these objectives.”

Under the deal between the two parties, the first €100m tranche has already been signed.

ÖBB-PV plans to utilise the loan to buy new Cityjet train sets that will be used to provide local and regional services.

ÖBB-PV board member Evelyn Palla said: “We are delighted by the excellent cooperation with the European Investment Bank.

“This loan will finance the acquisition of our new Cityjet train sets – an investment that stands for sustainable state-of-the-art rail transport in Austria and represents an important pledge to our customers, which we also want to attract to rail in the future.”

Commenting on the deal, European Commissioner for Transport Violeta Bulc stated: “This project not only supports investment and job creation in Europe, it also enables the transition to low-emission mobility.”