PODGORICA (Montenegro), November 29 (SeeNews) – The European Investment Bank (EIB) has signed a 40 million euro ($45.4 million) loan deal with Montenegro's government for the rehabilitation and upgrading of five main roads, the lender said.
The project aims to improve road conditions and safety, thereby facilitating trade and regional integration, the EIB said in a statement on Wednesday.
The scheduled works include the reconstruction and rehabilitation of several bridges and tunnels.
The project will also benefit from a 1.5 million euro technical assistance grant under the Economic Resilience Initiative (ERI) to finance the specialised professional services required to supervise the execution of the road works and implement the project successfully.
The total road length that will benefit from the EIB loan and the ERI grant is around 180 km, a quarter of the national network, the bank said.
The repayment period of the EIB loan cannot be longer than 20 years, while the maximum grace period will be five years, Montenegro's finance minister Darko Radunovic said in the statement.
The interest rate will be determined at the time of the withdrawal of funds, which will depend on market conditions, Radunovic added.
The ERI was launched by the EIB in 2016 following a request from the European Council. The initiative is aimed at addressing social and economic infrastructure gaps and stimulating private sector-led growth and job creation to tackle the root causes of migration.
The EIB has financed 22 projects worth 720 million euro in Montenegro since 1977, with infrastructure (road and railways) being a focus. In 2018 the EIB’s support to the country amounts to 140 million euro, equalising the record high achieved in 2017.
($ = 0.880479 euro)