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EBRD gives first non-sovereign urban transport loan in Romania
€20 million to help upgrade roads and tram lines in picturesque Arad
The streets and tram tracks of Arad will soon have the chance to catch up with
the charming buildings of this picturesque city in western Romania. To help
improve its transport infrastructure – which will benefit businesses,
residents and tourists – the EBRD is lending Arad €20 million in what will be
the Bank’s first non-sovereign loan dedicated to urban transport in the
country.
The loan will help improve roads and upgrade the tram lines running from the
north to the south of the city, improving safety, efficiency, and customer
service. Technical cooperation funds from the Italian government will also
help fund the commercialisation of the city’s transport sector and promote the
greater involvement of private companies in its operations. A portion of the
loan is being syndicated to Dexia Kommunalkredit Bank AG, an Austrian-based
bank which provides financing to local authorities, municipalities and
municipal associations in central and eastern Europe.
We have been working with municipalities in Romania since 1995 to develop the
water and waste-water sector, said Gavin Anderson, EBRD Business Group
Director for Infrastructure. Urban transport investment has also become
increasingly urgent in recent years. Arad is the Bank’s first project of this
type in the country and we expect it to be the first of many, Mr Anderson
added.
With its close proximity to Hungary, Arad is benefiting from foreign
investment that is helping to support its already growing economy, with many
industries ranging from the production of train wagons and automobile parts,
to agribusiness, toys and clothes production located in the area. Mr Anderson
added that this makes Arad a success story, which has to be largely attributed
to the Mayor and his team.
Arad’s strong economy is a result of good local businesses and growing foreign
investment, focussed around the city’s innovative industrial zones. What
remains is the need to support the activities and needs of local companies and
residents with improved public services, among which transport is certainly
paramount, Mr Anderson said. The EBRD has a good reputation for working with
local municipalities in Romania, and we want to build on that, he added.
Mayor Gheorghe Falca sees the EBRD’s loan as another step in the bank’s close
cooperation in the region. “We are pleased to have the EBRD’s involvement in
the project, which is vital for continuing the economic development of our
city,” said Mayor Falca.
The EBRD is the largest investor in Romania having committed around €2.5
billion in more than 130 projects.
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