E-80 HIGHWAY NIS-MERDARE PHASE I

The project consists of the construction of 32 km of highway as the first part of a phased construction of the whole missing link between Nis in Serbia and the border with Kosovo* at Merdare. * This designation is without prejudice to positions on status, and is in line with UNSCR 1244/1999 and the ICJ Opinion on the Kosovo declaration of independence.

The project lies on the indicative Orient/East Mediterranean extended Trans-European Transport Network (TEN-T) and South East Europe Transport Observatory (SEETO) Route 7 corridor, a 314-km long corridor which connects Lezhe in Albania through Pristina in Kosovo* to Nis in Serbia. The project forms part of the broader improvement of the road corridor between Nis and Pristina, pre-identified as a priority in the 2015 Connectivity Agenda. The project is included in the priority project list of the SEETO Comprehensive Network Multi Annual Development Plan 2014-2018. The project is included in the Single Project Pipeline agreed between the Government of Serbia and European Commission. The project is consistent with: the 2013 Stabilisation and Association Agreement between the EU and Serbia; and, 2017 Transport Treaty between the Western Balkan Six, including Serbia, and EU. The project is prioritised within the Government of Serbia's Transport Strategy, 2016-25. The project is eligible under Article 309(c), Transport Projects of Common Interest. In addition, it is also eligible under Article 309(a), Mandate Balkans. The project benefits from three Western Balkans Investment Framework (WBIF) technical assistance grants: for the preparation of the pre-feasibility study, feasibility study and now detailed design. The Government of Serbia is also applying for a WBIF investment grant, valued at up to 20% of the total investment cost, which is expected to become available from the beginning of 2019. The project's consistency to the EIB's Transport Lending Policy (CA/452/11) is to be confirmed during the appraisal. * This designation is without prejudice to positions on status, and is in line with UNSCR 1244/1999 and the ICJ Opinion on the Kosovo declaration of independence.

The Spatial Plan and the Strategic Environmental Assessment (SEA) for the entire corridor and highway Nis-Merdare were prepared and approved in October 2017. If located within the EU, the project would fall under Annex I of the Environmental Impact Assessment (EIA) Directive 2014/52/EU and therefore be subject to an EIA procedure. The project has been subject to a regulatory EIA procedure, including public consultation at scoping and assessment stages, over the period 2016 to 2018 in line with EU standards and compliant with Serbian Law. The EIA report has been submitted to the Competent Authority for the Environment for final approval, after regulatory public consultation, expected in late 2018. The project is adjacent to the protected area of Lalininaka Slatina. In August 2016, the Competent Authority for the Environment issued an opinion stating, inter alia, no Appropriate Assessment was required. The Project will require the permanent acquisition of approximately 400 ha of land and 72 physical structures (including 60 residential households) in the municipalities of Meroina and Prokuplje. A Resettlement Policy Framework, consistent with EIB policy, has been developed which will be applied in the preparation of a Resettlement Action Plan during detailed design. The procedures and outcomes for environmental and social assessment and management are to be further reviewed during the appraisal.

The Bank will require the promoter to ensure that any procurement procedures are done in accordance with the Bank's Guide to Procurement and the relevant applicable EU public procurement rules.

This operation is covered by the ELM Guarantee.