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EBRD supports road rehabilitation in Yugoslavia
Upgrading road network is essential to facilitating regional trade and development
The European Bank for Reconstruction and Development agreed a €76 million loan to help rehabilitate important road networks in the Federal Republic of Yugoslavia. Guaranteed by the Federal Government, the loan to the state-run Roads Directorate will assist the revitalisation of more than 500 km of road, currently in a poor state of repair. This includes sections of Pan European Corridor X, a vital road corridor linking Yugoslavia with neighbouring Croatia, FYR Macedonia, Hungary and Bulgaria.
The loan is part of an overall financial package totalling €171 million, the balance of which was co-financed with the European Investment Bank, which provides financing for an additional 400km of road, largely in the north of the country. The total network affected by this joint project is over 900km. The United States Government and the EU's European Agency for Reconstruction (EAR) contributed additional financing for technical support.
Speaking in Belgrade, Henry Russell, the EBRD Director for Yugoslavia, said upgrading the road network would facilitate the transportation of goods throughout the region, fostering trade and development, and bringing southeastern Europe closer to the EU. Mr Russell commented on the cooperation among the EBRD, EIB , the EU and US. "We have all channelled our energies towards one important goal and, with the support of the government, got this project underway quickly and efficiently," he said.
Whilst the aim of the project is to upgrade the roads, the EBRD will also assist in institution building and strengthening the country's capacity to monitor and implement the long-term maintenance of roads. To this end, the US has provided financial assistance towards the preparation of a 5-year road plan by the Roads Directorate. The EBRD plans to assist the Government to define the best approach for financing the further development of Corridor X, including options for the private sector through road maintenance or operating concessions.
With the close cooperation of the European Agency for Reconstruction, the EBRD is supporting the creation of a well-managed unit within the Directorate to co-ordinate the tendering of contracts for work required under this project. EAR is financed through EU donor support.
To date, the EBRD has provided €1 billion towards 23 road projects in 16 countries. The project brings the total level of commitments by EBRD in the Federal Republic of Yugoslavia to €350 million.
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