Following the recent resumption of its financing activites in Croatia, the European Investment Bank (EIB) announces a loan of EUR 40 million (1) loan to the Republic of Croatia for the rehabilitation of railway infrastructure and modernisation of the Croatian railway sections of Pan-European corridor Vc, linking the Croatia to Hungary and Bosnia Herzegovina.
This is a priority investment for the reconstruction and development of the Western Balkan region, listed in the Quick-Start operations under the Stability Pact, where the EIB plays an important role as the European Union's long-term financing institution.
As for most of the other countries in the region, the effects of war and regional as well as political fragmentation, have been to the detriment of organised transport means. The project will contribute to improved services on an important transit corridor, assisting the integration of Croatia with the neighbouring countries and with the European Union. Focusing on the complete overhaul of the infrastructure, the modernisation of signalling and telecommunications of the sections 100 km on the Northern branch from the Hungarian border to Samac on the Bosnian border, and 23 km on the Southern branch from Metkovic on the Bosnian border to the Adriatic port of Ploce, is financially jointly supported by the EIB, the EBRD and the World Bank.
The EIB loan is provided under the current mandate for Central and Eastern Europe, which was recently extended to Croatia following the EU's Council Decision of 07.11.2000.
As an immediate response to the leading role given to the Bank by the High Level Steering Group and the Stability Pact in drawing up and coordinating basic infrastructure investment programmes in the region, the EIB evaluated investment needs and identified priority projects in post-war South-Eastern Europe. The region includes Albania, Bosnia-Herzegovina, Croatia, the Federal Republic of Yugoslavia (consisting of Serbia and Montenegro), the Former Yugoslav Republic of Macedonia (FYROM), as well as Bulgaria and Romania.
Projects have been grouped into a Quick-Start Package of capital investment, with implementation commencing, or tenders awarded up to March 2001, and a Near-Term Package of investment which appears prima facie economically justified and does not raise major sectoral or project issues.
The list comprises a total of 85 projects involving some EUR 4 billion. Of these, 35 are Quick-Start projects worth EUR 1.1 billion. The EIB has a lead role in 14 of them, costed at around EUR 800 million, i.e. 72% of the total. The other 50 Near-Term projects total some EUR 3 billion. The EIB is likely to be involved in 18 of them, running to some EUR 1 billion, i.e. 33% of the overall amount.
In addition to the reconstruction programme, the EIB is financing projects in the Balkans under its normal lending activity in the region.
In Albania, Bosnia-Herzegovina and the FYROM, the Bank is operating under the current mandate for Central and Eastern Europe agreed by the Council of Ministers for 2000 to 2007, which provides for EIB lending of up to EUR 8.7 billion in the ten Accession Countries and in three other States in South Esatern Europe, which do not have candidate status: Albania, Bosnia-Herzegovina, Croataia and the FYROM. It is expected that the existing mandate will be extended to the Federal Republic of Yugoslavia (including Serbia and Montenegro) later this year. In Bulgaria and Romania, in addition to lending activity under mandate, loans are also made available under the second Pre-Accession Facility authorised by the EIB's Governors, providing for EIB lending of up to EUR 8.5 billion in the Central and Eastern European Accession Countries as well as in Turkey, Cyprus and Malta between 2000 and 2003.
EIB lending in the Western Balkans totals EUR 352 million.
(1) 1 EUR : 0.924800 USD, 0.638700 GBP