The European Investment Bank (EIB), the European Union's long-term credit institution is providing ECU 40 million (1) for the rehabilitation and upgrading of road sections, located between Sofia and Kulata on the Greek border, and between Orizovo in Central Bulgaria and Novo Selo on the Greek border. The loan agreement was signed today in Luxembourg by Mr. Evgeniy S. Bakardjiev, Deputy Prime Minister of Bulgaria and EIB Vice-president Mr. Wolfgang Roth.

The loan to the Republic of Bulgaria is for 20 years with a five year grace period. The EU Commission has financed pre-investment studies under its grant aid programme Phare which will also participate in the funding of the border crossing facilities. The project is another step in the development of an adequate road network which is essential for economic and social development in Bulgaria. It will improve traffic fluidity and safety on two of the major international transit routes crossing Bulgaria: the E79 linking Sofia and Thessaloniki, and the E80/E85 linking Sofia and Plodiv with Alexandropolis.

Commenting on the loan, EIB Vice-President Wolfgang Roth said: 'These road schemes will improve driving conditions and safety along two main links between Bulgaria and Greece which are already heavily used by international truck traffic and which are likely to grow further. For this reason, these roads were included under the Crete Trans-European Network corridor No. IV from Berlin-Prague-Bratislava-Budapest-Sofia onto Greece and Turkey. Well-functioning transit routes built to international standards are vital for stimulating local development and international trade.'

The loan brings total EIB financing in Bulgaria to ECU 386 million. Previous loans were for various road improvement schemes, for the completion of a coal-fired power station, the extension and modernisation of Sofia Airport, the modernisation of the telecommunications network and for upgrading the air-traffic control system. The EIB also provided a global loan (credit line) to Bulgaria's banking sector for financing investment by small and medium-scale companies.

Since it started lending in Central and Eastern Europe in 1990, the EIB has provided some 6.3 billion ECU for projects in Poland (1 761 million), the Czech Republic (1 532 million), Hungary (907 million), Slovakia (615 million), Romania (570 millonmillion), Bulgaria (386 million), Slovenia (195 million), Lithuania (108 million), Estonia (88 million), Albania (70 million) and Latvia (51 million). For the period January 1998 to January 2000 a total of ECU 5.6 billion has been earmarked for projects in the region. This includes ECU 150 million for transport and other infrastructure projects in the FYR Macedonia where the EIB may operate since the beginning of 1998.

(1) On 31 December 1997, 1 ECU = DEM 1.98; USD 1.10; GBP 0.67; LEV 1.98.