European Investment Bank lending to projects in the Czech Republic has reached EUR 2 billion following signature of two additional loans totalling EUR 195 million(1) for road and motorway projects with Konsolidacni Banka which will on-lend the funds to the Roads and Motorways Directorate of the Czech Ministry of Transport:
- EUR 100 million is for the improvement of thirteen major European E-road sections, mainly by building new bypasses, road realignments and widening and bridges to eliminate bottlenecks and improve traffic fluidity. The EIB funds will also help pay for new road building equipment and technical assistance,
- EUR 95 million will help finance the rehabilitation of a number of priority sections of the Czech road and motorway network:
The EIB, the European Union's financing arm, provided its first loan for projects in the Czech Republic in 1992 and since, lent more in the Czech Republic than in any other Central European country except Poland.
Commenting on the loan, EIB Vice-President Wolfgang Roth said: ' More than half of the EUR 2 billion we lent to Czech projects so far went to transport schemes, of which some EUR 400 million were for the modernisation of the major international railway lines. The various traffic modes in the Czech Republic will soon have to cope with a sharply growing mobility in an enlarged European Union. The various road improvement schemes financed by the EIB with a total of some EUR 700 million will mean more safety and comfort for travellers on axes of Czech and European importance.'
In addition to transport schemes, the EIB financed in particular the Czech telecommunications fixed network, environment-friendly investments in several coal-fired power stations in northern Bohemia, municipal infrastructure and the reconstruction of infrastructure damaged during the 1997 floods in northern Moravia. Small and medium-scale industrial and energy investments are being financed through global loans (credit lines) to commercial banks established in the Czech Republic.
Since 1990, the EIB has lent over EUR 10 billion to projects in twelve Central European countries: Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia, Hungary, Slovenia, Romania, Bulgaria, the Former Yugoslav Republic of Macedonia and Albania.
The prospects of rail in the CEEC's
In Prague, EIB-Vice-President Wolfgang Roth also presented to the press a report by the Center for European Policy Studies (CEPS) on The Prospects of Rail in the CEECs. A CEPS Working Party chaired by Mr Roth, concluded that rail infrastructure, and transport infrastructure investment in general, will play a crucial role in the enlargement process. The applicant countries will have to raise real spending to finance, together with the European Union's grant and loan facilities, the investment needed to adjust infrastructure to the new European market and the expected growth in both passenger and freight transport. Against this background, CEPS launched a Working Party to examine the needs and possibilities to propose innovative approaches in both the East and the West to set up a joint investment programme for rail infrastructure. Railways can play a significant role in three markets - provided they are allowed to operate in a commercial manner, serving customers at competitive prices: (1) long-distance freight, (2) quality passenger transport on high-volume corridors, and (3) urban-centred regional transport. Governments must allow this to happen by (1) reducing their direct role in railway management and (2) refrain from burdening railways with social tasks which are the direct responsibility of Governments.
(1) 1 EUR = 1.95583 DEM, 0.647500 GBP, 35.7750 CZK.