The European Investment Bank (EIB), the European Union's long-term credit institution, announces its first loan for projects in Bosnia and Herzegovina (BiH). The Euro 60 million(1) loan to the Government will help finance three road schemes: a new express by-pass around Sarajevo, a bridge on the Neretva river at Capljina and the rehabilitation of various stretches of roads of national and international importance.
The project is estimated to cost some 120 million Euro. It is expected to receive support from the European Union's grant aid programmes.
The loan agreement was signed today in Sarajevo by BiH's Minister for Foreign Trade and Economic Relations, Mr Mirsad Kurtovic, and EIB Vice-president, Mr. Panagiotis Gennimatas.
The Co-operation Agreement between the European Union and Bosnia and Herzegovina, which entered into force last year, foresees EIB loans of 100 million Euros for transport, energy and environment projects over two years. In this context EIB loans carry a 2% interest rate subsidy provided by the EU budget.
The development and rehabilitation of the road network should facilitate international traffic and foster exports, both key factors for the resumption of growth in Bosnia and Herzegovina. The road sections financed by the EIB are situated on or near Pan-European Corridors V and X selected for development by successive Pan-European Transport Ministers Conferences.
The EIB is the main provider of funds for transport schemes in Central Europe, helping the countries in the region to develop internal and external communications on a cost-effective and durable basis, and linking them up with the trans-European networks (TENs) of the Union.
Since it started lending in the Central European countries, the EIB has provided over 11 billion Euros for projects in Poland (2.9 billion), the Czech Republic (2.1 billion), Hungary (1.5 billion), Romania (1.5 billion), Slovakia (935 million), Bulgaria (700 million), Slovenia (710 million), Lithuania (232 million), Latvia (193 million), FYR of Macedonia (130 million), Estonia (123 million) and Albania (68 million). The EIB's Board of Governors has earmarked lending up to an annual 3.5 to 4 billion Euro for the projects in the region in the period 2000 to 2003.
(1) 1 EUR = 0.621700 GBP; 1.95583 DEM.