The European Investment Bank (EIB), the European Union's long-term financing institution, is lending EUR 25 million to the Republic of Serbia and Montenegro. The Ministry of Education and Sports of the Republic of Serbia will use the funds to build eight primary and secondary schools and to modernise one special-needs school.

The EIB loan supports the public educational priority established by the Ministry and complements the resources and support offered by the European Commission, the European Agency for Reconstruction, the World Bank, the National Budget and other donors. It contributes to a key investment at the primary and secondary level (general and vocational) of education, a crucial sector for the country's economic development and stability.

This first education project by the EIB in Western Balkan will increase access to education and improve the curricula and standards. It will facilitate economic recovery, promote competitiveness and help to integrate Serbia within the European Union and the international environment. The key criteria for school selection have been: areas of deprivation, underdevelopment of school infrastructure, overcrowding and the schools' potential contribution towards regional development.

The project forms part of a wider reform effort to modernise the schools buildings, set-up and equip new teacher training centres, and improve vocational education. Of the existing 5500 school buildings, 25% are over 60 years old and 55% need partial or complete rehabilitation while some 50 % may lack the basic terms of equipment. . By 2006 / 2007, compulsory education will be extended form 8 to 9 years.

The 20-year loan will cover 50% of the total investment costs. The project will be implement over the period 2005-2007.

Up to April 2005 the EIB has signed loan contracts totalling EUR 724 million for projects located in Serbia and Montenegro. The finance provided supports projects in: transportation, water management, energy, urban infrastructure, health and SMEs In the future, the EIB aims at underpinning transport infrastructure, water management, health and SMEs.

The EIB was set up in 1958 under the Treaty of Rome to provide loan finance for capital investment furthering European Union policy objectives, in particular regional development, Trans-European Networks of transport, telecommunications and energy, research, development and innovation, environment improvement and protection, health and education. Outside the Union, the EIB contributes to European development co-operation policy in accordance with the terms and conditions laid down in the various agreements linking the Union to some 130 countries in Central, South and Eastern Europe, the Mediterranean region, Africa, the Caribbean and the Pacific, Asia and Latin America.