On the occasion of the signature on the same day in Luxembourg of the Stabilisation and Association Agreement between the Croatian authorities and the EU, the European Investment Bank, the European Union's long-term financing institution, is pleased to announce the signing of its first loan to the Croatian road sector amounting to EUR 60 million (1) for the rehabilitation and upgrading of priority sections of the National road network. The project concerns 26 sections of roads over a length of 450 Km, half of which are located on the Adriatic coastline.
The accompanying Guarantee Agreement was signed by Mr. Mato Crkvenac, Croatian Minister of Finance, and the EIB Vice President, Mr. Ewald Nowotny, in the presence of Mr. Goranko Fizulić, Croatian Minister of Economy.
The Finance Contract was signed by Mr. Vladimir Bizjak, President of The Management Board of Croatian Roads Ltd., and Mr Nowotny.
The loan to the Hrvatske ceste d.o.o (Croatian Roads Ltd) is for up to 20 years. Established in April 2001 for the management, construction and maintenance of main roads, the Croatian Roads Ltd is fully owned by the Croatian State.
Bringing the roads up to modern international standards is crucial to underpin the country's economic development. The EIB's support reconfirms the Bank's commitment to the reconstruction and development of the economies of Southeastern Europe.
Together with cofinancing from Croatian Roads Ltd. itself, and in parallel to financing provided by World Bank and EBRD to other road sections in Croatia, the EIB loan is provided under the current mandate for Central and Eastern Europe, which was extended to Croatia earlier this year following the EU's Council Decision of 07.11.2000. Earlier EIB loans in Croatia concerned Croatian railways (EURO 40m signed in May 2001) and a Global Loan to HVB Bank Croatia (Euro 20m signed in October).
The EIB, established in 1958 by the Treaty of Rome, finances capital investment projects which further the European Union (EU) policy objectives. It also participates in the implementation of the EU's co-operation policy towards third countries. In South-East Europe, the EIB operates under the 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, which complements the EU, as well as EU Member States' own bilateral co-operation policies. To underline its commitment to future post-war reconstruction in the Balkan area, the EIB played an active role in the preparation phase of the reconstruction investment programme, in cooperation with the European Commission and the other multilateral financing institutions. The list of potential infrastructure projects which was published in the Study on Basic Infrastructure Investment in South-Eastern Europe comprises a total of 85 projects totalling EUR 4 billion. Of this total 35 projects are Quick-Start totalling EUR 1.1 billion, in which the EIB has a lead role in 14, totalling EUR 720 million, ie 65% of the total. 50 projects are "Near-Start", totalling some EUR 3 billion, of which EIB has a lead role in 18, amounting to some EUR 1 billion, ie 33% of the total Near-Start package.
(1) 1 EUR: 0.596700 GBP, 7.49392 HRK