The EBRD is providing a €100 million loan to support further modernisation of rail infrastructure in Serbia, in a deal that was announced, appropriately enough, on Serbia’s National Rail Day, 15 September. This is the second €100 million loan offered by the Bank to Serbian Railways in the past 18 months to support its modernisation programme and is the latest in a string of key infrastructure investments across the western Balkans.
Read news story about the signing
“In the current economic environment, when investors and commercial lenders back away from such capital intensive projects requiring long term funding, the EBRD is leading the way in supporting infrastructure development in emerging Europe”, says Thomas Maier, EBRD Managing Director for Infrastructure.
The latest loan offered to Serbian Railways will finance the renewal of over 111 km of rail track along Corridor X, one of the ten pan-European transport routes and a key transit stretch in Serbia, providing vital links to FYR Macedonia and Greece in the south and to Croatia, Hungary and Western Europe in the north. With the support of the EBRD funds Serbian railways will also acquire 15 new energy efficient locomotives to replace some of its dated freight cars.
Boosting regional integration in Western Balkans
The EBRD is also financing the construction of a new motorway section in Serbia, E-80, along the strategic Corridor X, with €150 million provided in September 2009. The modernisation of transport routes along Corridor X in Serbia will contribute to facilitating trade and boosting regional integration in Western Balkans.
Outside of Serbia, the EBRD is financing a number of crucial infrastructure projects in south-eastern Europe.
EBRD funding has been used to complete the construction of the Banja Luka – Gradiska motorway in Bosnia-Herzegovina. This is the first motorway in the Republika Srpska, one of the country’s two political entities, and will link it with the international transport Corridor X. The EBRD is also financing the expansion Sarajevo International Airport, helping it to address the growing passenger traffic.
In Montenegro, the EBRD is financing the upgrade of the Niksic – Podgorica rail line with a €15 million loan. While in Albania, a €50 million EBRD loan is being used to modernise the country’s aged road systems and so improve transport links in Albania’s rural areas and bring essential products and services to the remote communities throughout the land.
Senior Banker Lin O’Grady, who is the Operation Leader of the Serbian Railways project as well as for a number of the Bank’s other investments in the Western Balkans transport sector, says: “These projects help countries align their transport networks to EU quality and safety standards and boost cross border trade links that are key to the development of the economies in the region.”
Uncovering new tourist destinations
In addition to its key transit role, the Western Balkans is becoming an increasingly important holiday destination, its countryside and coastal resorts attracting more and more tourists. EBRD investments are helping to build up the infrastructure that will support the further development of tourism in the region and putting lesser known towns on holiday-makers’ maps. This is the case of Sibenik port in Croatia, an attractive mid-cruise stop for ships operating in the Adriatic area of the Mediterranean, which is being expanded with the support of EBRD funds.
All in all, since the beginning of 2010, the EBRD invested over €550 million in transport infrastructure projects in countries of its operations.
Long lasting impact
EBRD investments in recent months have helped to meet immediate financing demands stemming from a shortage of funds during the global economic crisis. But the Bank’s projects bring significant long-term benefits for future potential investors and for the sustainable development of the economies in the region.
Mobilising considerable grant financing and technical assistance, every EBRD-funded project is another step towards promoting sector reforms, transforming regulatory frameworks and brining them in line with international practice.
The modernisation of Serbian Railways is supported by donor funds from the Central European Initiative, the German government and the EBRD’s Shareholder Special Fund.
“By contributing to this project through the Central European Initiative, Italy is glad to support the reform process in the railway sector in Serbia. Interregional well functioning infrastructure is key for the development and regional integration of the Western Balkans countries”, says Stefania Bazzoni, EBRD Board Director representing Italy.
What makes EBRD projects unique is their contribution to advancing further reforms, paving the way for private sector participation in future investments. This input has a long lasting effect that will outlive the projects themselves.
Further information: please contact the EBRD press office
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