The European Investment Bank (EIB), the European Union's financing institution, is advancing a EUR 50 million loan to the Republic of Croatia, via the Ministry of Finance and the Ministry of Public Works, Reconstruction and Construction (PWRC) to support post-war reconstruction in Croatia. The contract was signed by EIB Vice President Ewald Novotny and the Croatian minister of Finance Mr Mato Crkvenac.

The proposed Framework Loan is for the financing of small to medium-sized municipal infrastructure projects in Areas of Special State Concern (ASSC), i.e those areas in Croatia most devastated by the wars in the 1990's and amongst the poorest and least developed in the country. The operation is aimed at reversing the negative economic consequences of the recent conflicts, accelerating the return of the displaced population, stimulating demographic and economic progress, and ensuring a more balanced development of the ASSC when compared with the rest of the country.

Immediate benefits will accrue to residents from the provision of essential infrastructure on foot of the rehabilitation and construction programme, which will also facilitate the return of refugees and displaced persons to the respective localities. In addition, the resulting physical renewal of settlements will generate a number of positive externalities, principally associated with community development and prospects for regional growth.

During the period 2003-05, the Ministry's overall rehabilitation investment expenditure in the ASSC areas is expected to amount to some EUR 450 m.

The EIB is a lead player in implementing the European Union's priority objectives. In 2002, EIB financing for projects supporting European Union policy objectives totalled EUR 39.6 billion. EUR 33.4 billion went to projects within the EU Member States and EUR 3.6 billion to those in the Accession Countries, while lending in other countries ran to EUR 2.6 billion. To fund these activities, the EIB borrowed EUR 38 billion on the world's capital markets.

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 9.28 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 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.

In 2002 in Croatia, the EIB financed a total of 130 million for road and air transport: the construction of the last two sections of the Rijeka-Zagreb motorway (60 million), air traffic services (20 million) and the rehabilitation of the motorway along Pan-European Corridors X and Xa (50 million).