The Baltic states are facing a funding shortfall of around €10bn to complete the first phase of the Rail Baltica project, with no guarantee that the European Union will cover the gap through its next long-term budget after 2028, Latvia’s public broadcaster LSM.lv reported on June 29.

Rail Baltica is one of Europe's largest transport infrastructure projects, designed to connect Tallinn, Riga and Vilnius with the European standard-gauge rail network. While construction is progressing across all three Baltic states, securing the remaining financing remains one of the project's biggest challenges. As reported by IntelliNews, the project's costs are estimated to balloon up to €23bn.

Speaking to Latvian Public Media, RB Rail chief executive Marko Kivila said just over €5bn has so far been secured, while the first phase alone is expected to cost about €15bn.

"No one can predict exactly how much money we'll get from the European Union, but it won't be enough," Kivila said, LSM.lv reported.

He stressed that Latvia, Lithuania and Estonia would have to contribute a greater share of the funding themselves, as EU support alone would not be sufficient to complete the strategic cross-border railway linking the Baltics with the rest of Europe.

To reduce costs, project partners are considering cheaper construction solutions, although Kivila acknowledged that redesigning parts of the project would inevitably lead to further delays.

The funding debate comes as Latvia faces growing criticism over the pace of implementation. However, Latvian Prime Minister Andris Kulbergs rejected suggestions that his country is holding back the project.

"There is no need for us, among the three Baltic states, to compete over who will be the first to build more tracks or who will do it faster. It makes no difference if we don't do it together," he said, LSM.lv reported.

Kulbergs has asked European Commission President Ursula von der Leyen to arrange talks with the EU Commissioner for Transport, arguing that politically imposed deadlines risk driving up costs rather than speeding up construction, LSM.lv reported.