March 18 (SeeNews) - The World Bank's board of directors has approved a $62.5 million (52.3 million euro) loan for the modernisation of Serbia's railway sector, it said.
The World Bank is cooperating with the French Development Agency with a 50% joint co-financing of Phase 1 of the project, taking advantage of aligned priorities such as green transport and regional integration and bringing the total investment for this phase to $125 million, it said in a statement on Wednesday.
The programme, with an overall financing envelope of $400 million, focuses on an increase in network utilisation of 5%, a reduction of fatalities on the rail network by 23% and a 10% increase in the market share of national cargo rail over the next 10 years, the World Bank said.
"The programme will lead to better quality infrastructure, improved safety, enhanced in-country and regional integration, accelerated economic growth, and an improved business environment in the region," Stephen Ndegwa, World Bank Country Manager for Serbia, said in the statement.
The three stages of the World Bank project will include infrastructure investments and asset management, initiatives to strengthen institutions in the sector, and modernisations efforts, the World Bank noted.
According to preliminary assessments, the portion of the project that will lead to mitigation or adaptation benefits for project beneficiaries, also known as climate co-benefits, is expected to exceed 89%, amounting to $111.3 million.
With plans to invest 3.3 billion euro in its rail network over the next decade, Serbia aims to fully electrify its rail line tracks, fully implement the European Railway Traffic Management System, remove speed restrictions, improve freight line capacity on the core network, and enhance the management of rail assets. This is well aligned with EU transport policy and trans-European network requirements.
($ = 0.8373 euro)