Serbia: €273.8 million for road rehabilitation and safety

The European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD) and the World Bank (the International Bank for Reconstruction and Development/ IBRD) signed on 27 November in Belgrade with the Serbian Ministry of Finance three loan agreements totalling €273.8 million aimed at supporting the rehabilitation and safety of part of the Serbian national road network.

The project will involve the rehabilitation and safety of around 1,100 km of major roads throughout Serbia over the next five years. The total cost is estimated at €390m, of which €367m for rehabilitation works and €23m for services including detailed design, institutional strengthening and technical assistance. The project supports the implementation of the first phase of the Government’s National Road Network Rehabilitation Program.

The investments will be carried out by the public enterprise Roads of Serbia and will be financed jointly by the EIB with a EUR 100 million loan, the EBRD with a €100m loan and WB with a €73.8m loan; the balance of the investment cost (€116.2m) will be provided by the government of Serbia.

The project is expected to improve the condition and safety of the national road network. It will also:

• Promote regional and national economic growth, facilitate trade, support private sector development and, in general, contribute to economic and social cohesion in the region;
• cater for international, inter-city and local traffic demand, and;
• have overall positive environmental and social impacts as it will improve access to markets and social services and also provide opportunities for temporary employment for local communities through civil works contractors.

Background

The EIB is the long-term lending institution of the European Union owned by its Member States. It has been active in the Western Balkans since 1977.  Over the past ten years, it has provided finance totaling over €7 billion. Since 2001, the EIB has extended about €4bn in favour of projects in Serbia, of which €1.5bn was signed in the transport sector.

To date, the EBRD has invested €3.3bn in 167 projects in Serbia, of which 40% were in the infrastructure sector, including investments in the transport industry. Set up in 1991, the EBRD is owned by 64 countries and two intergovernmental institutions and supports the development of market economies and democracies in its countries of operations.

The World Bank has provided knowledge and financed 39 projects in Serbia since 2001 to the tune of almost $2bn, including budget support. The current portfolio consists of 12 investment projects under implementation worth around $845m.

Serbia: €273.8 million for road rehabilitation and safety

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