CORRECTED - Bosnia Signs 75 Mln Euro Loan Deal with EIB for Key Motorway Construction

A corrected version follows:

SARAJEVO (Bosnia and Herzegovina), December 19 (SeeNews) – Bosnia has signed a 75 million euro ($107 million) loan deal with the European Investment Bank (EIB) to finance the construction of a section of a key motorway across the Balkan country, the Bosnian government said.

The 15.2-kilometre section linking the towns of Zenica and Kakanj in central Bosnia will be completed by 2011, the government said in a statement posted on its website late on Thursday. The north-to-south motorway section will be part of European Union-defined Corridor Vc which connects the Hungarian capital Budapest with the Croatian Adriatic port of Ploce via Bosnia.

The EIB loan will have to be repaid in 25 years, with a six-year grace period, the government said.

The 340-kilometre motorway is Bosnia’s biggest infrastructure project since the 1992-95 war which devastated its economy and road, railway and power networks.

In October, the European Bank for Reconstruction and Development (EBRD) lent Bosnia 180 million euro for building stretches of the motorway. The overall EIB and EBRD investment in priority motorway sections will be 480 million euro, the EBRD has said.

A Bosnian government-commissioned feasibility study has shown the motorway will cost 7.39 billion marka ($5.42 billion/3.78 billion euro) and will need to be financed through the state budget, public-private partnerships, commercial lending and the international financial institutions.

($ = 0.7011 euro)