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    BEI/02/59 Luxembourg, 16 July 2002

Federal Republic of Yugoslavia: EIB lends EUR 115 million for Transports and SMEs

The European Investment Bank (EIB), the European Union's financing institution, is lending a total of EUR 115 million for road rehabilitation and Small and Medium Sized Enterprises (SMEs) in the Federal Republic of Yugoslavia. The loan agreements were signed today during a visit to Belgrade by EIB Vice-President Ewald Nowotny:

EUR 95 million to the Federal Republic of Yugoslavia are for the rehabilitation of priority roads and motorways in Serbia, which have suffered as a result of a prolonged lack of maintenance. The loan is provided in the framework of the Bank's multi-annual Road Rehabilitation Project to rebuild the Yugoslav road network.

Due for completion in 2005, the project concerns 864 km road-sections along Pan-European Corridor X (from Croatia to FYROM with links towards Hungary and Bulgaria), as well as sections on the trunk roads towards Romania, Bosnia-Herzegovina and Montenegro. Another lot is for upgrading 29 road sections considered particularly dangerous in terms of road safety.

This Project has been prepared jointly with the European Bank for Reconstruction and Development, which is considering a EUR 76 million loan in parallel to the EIB finance.

EUR 20 million in the form of a global loan go to the Federal Republic of Yugoslavia, with the National Bank of Yugoslavia (NBY) acting as agent, for financing investments by private sector SMEs and Municipalities. Initially NBY will channel the EIB funds through Eksimbanka a.d. Beograd and Komercijalna Banka a.d. Beograd. Other banks may be added in due course.

The global loan will help finance small and medium-sized enterprises and small public infrastructure, and by associating large private local banks, contributes to the availability of long-term domestic funds. It further underlines EIB's commitment to supporting investment projects, via reliable local banking partners, in the productive sectors of the Yugoslav economy and long-term development.

This first EIB loan for the private sector in Yugoslavia means a diversification in terms of sector and client involvement. Up to now the EIB has been mainly financing transport sector projects which were supported with a total of EUR 151 million.

Technical assistance for both projects is financed by a grant of EUR 2 million from the European Agency for Reconstruction.

The loans signed by today bring the total EIB lending in support of FRY transportation and private sectors to EUR 226 million in the Federal Republic of Yugoslavia since December 2001 when the Bank resumed lending in Serbia and Montenegro. EUR 66 million helped finance urgent works on national roads in both countries, the upgrading of Belgrade Airport and the reconstruction of the breakwater of the Mediterranean Port of Bar.

In early 2002, EIB granted a EUR 85 million loan for priority rehabilitation works on the main railway lines between Belgrade, Podgorica and Bar. Presently, the EIB is also looking at energy schemes, water and wastewater investments by municipalities, education and health projects.

NOTE TO THE EDITOR

The EIB is a lead player in implementing the European Union's priority objectives. In 2001, EIB financing for projects supporting European Union policy objectives totalled EUR 37 billion (up 13% on 1999). EUR 31 billion went to projects within the EU Member States and close to EUR 3 billion to those in the Accession Countries, while lending in other countries ran to EUR 3 billion. To fund these activities, the EIB borrowed EUR 32 billion on the world's capital markets.

In South-East Europe, the EIB operates under the Mandate for Central and Eastern Europe agreed by the Council of Ministers for 2000 to 2007, which provides for EIB lending of up to EUR 9.28 billion, which complements the EU, as well as EU Member States' own bilateral co-operation policies. To underline its commitment to future post-war reconstruction in the Balkan area, the EIB played an active role in the preparation phase of the reconstruction investment programme, in cooperation with the European Commission and the other multilateral financing institutions. The list of potential infrastructure projects which was published in the Study on Basic Infrastructure Investment in South-Eastern Europe comprises a total of 85 projects totalling EUR 4 billion. Of this total, 35 projects are Quick-Start totalling EUR 1.1 billion, in which the EIB has a lead role in 14, totalling EUR 720 million, i.e. 65% of the total. 50 projects are "Near-Term", totalling some EUR 3 billion, of which EIB has a lead role in 18, amounting to some EUR 1 billion, i.e. 33% of the total Near-Term package.

For further information, please contact the Information and Communications Department (Ms Helen Kavvadia, tel.: +352 4379 3146, fax +352 4379 3189,

Internet: http://www.eib.org)

For all matters relating to procurement, the promoter should be contacted directly.


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