Reconstruction project funded by sovereign loan and grant donor funds. The project will also prepare the way for sector restructuring and eventual privatisation.
The project aims to:
re-establish access to telecommunications services in areas damaged by the war;
create a legal and regulatory framework to support the normal integration and operation of the telecommunications sector and to encourage private investment; and
strengthen the management and performance of the loan beneficiaries.
A strong component of the project is to develop the basic telecommunications legal and regulatory framework in Bosnia and Herzegovina, which will encourage further investments in the region.
The borrower will be Bosnia and Herzegovina (BH), which will on-lend the proceeds of the loan to the Federation of Bosnia and Herzegovina (FBH) and Republika Srpska (RS). The "beneficiaries" are the three local telecommunications operators (PTT BiH, HPT Mostar and Telekom Srpske), which operate domestic and international telephone communications.
The Bank will provide US$ 20 million (ECU 18 million) in the form of a state loan, with full sovereign guarantee. US$ 21 million (ECU 19 million) will be co-financed by grants from foreign donors (Japan, Italy, Netherlands, Switzerland and Norway).
US$ 51.8 million (ECU 46 million).
The project has been classified B/0, requiring an Environmental Analysis. There are unlikely to be any significant issues associated with the project. However, due to the potential environmental impact in connection with past damage as a result of the war, construction activities and the replacement of old equipment, an Environmental Analysis is required and is being carried out. If any environmental issues arise, appropriate environmental mitigation measures will be developed.
An 18-month technical assistance package, including three major assignments totalling about ECU 1.15 million, will help to finalise and implement the project.
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