Major technical incompatibilities signifcantly impede cross -border rail transport from the Baltic states to other EU countries. The Rail Baltica project intends to overcome these compatibility challenges and is to be built almost entirely from scratch. Furthermore, with its route from Tallinn to Warsaw, it aims to connect the Baltics to the trans -European rail network. This paper examines how the EU guidelines for trans -European transport networks affect Rail Baltica. In addition, the current funding status of the project will be assessed. The research showed that the solutions to the guideline -related issues are currently more advanced than those for the financial challenges.