This is a prerequisite to form a European Grouping of Territorial Cooperation (EGTC), a legal entity of regional and cross-border cooperation needed to secure EU funds, Grosuplje Mayor Peter Verlič said after the signing ceremony, which was held in Otočec near Novo Mesto on Wednesday.

Upgrading the 100-year-old rail line is meant to encourage mobility, international cooperation and the development of the areas along the railway.

The Ljubljana-Grosuplje-Trebnje-Novo Mesto-Metlika-Karlovac-Zagreb track is to be modernised to secure higher speeds (at least 70km/h) and increase capacity.

The railway, some 120 km long on the Slovenian side, is to be electrified, train stations along it are to be refurbished and dangerous level crossings eliminated.

The EGTC is also to purchase ten new passenger trains to ensure transport runs smoothly.

The upgrade is to be funded from different sources and is expected to be completed in ten years.

While the project does not yet have a price tag, Verlič said the upgrade of the southbound Grosuplje-Kočevje rail could serve as a comparison.

The 50-km railway between the two towns, which was closed half a century ago, was valued around 42 million euro.

The agreement was signed by the mayors of Novo Mesto, Črnomelj, Grosuplje, Ivančna Gorica, Metlika, Mirna Peč, Semič, Trebnje and Škofljica and Croatia's region of Karlovac, with the municipality of Novo Mesto serving as project coordinator.

The event was also attended by Slovenian Infrastructure Minister Peter Gašperšič and Alen Gospočić from the Croatian Ministry of Maritime Affairs, Transport and Infrastructure.