Ebrd loans bosnia $874 mln for strategic highway

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SARAJEVO Dec 22 The European Bank for Reconstruction and Development (EBRD) on Tuesday signed an 80 million euros ($87.44 million) loan deal with Bosnia to help the Balkan country build two sections of a strategic north-south highway. The sections, between the southern villages of Pocitelj and Buna, as well as a bypass around the central town of Zenica, will be part of the pan-European VC corridor, linking Budapest in the north with the Croatian port of Ploce in the south. The 15-year loan, which includes four-year grace period, will go to the Motorways Company of Bosnia's autonomous Bosniak-Croat Federation, Bosnia's Finance Minister Vjekoslav Bevanda said.

It will carry an interest of six-month Euribor plus 1 percent, Bevanda said, adding that Bosnia will set aside 16.2 million euros for the project. The construction of the two sections, stretching to a total length of some 11 kilometres, will be completed in 2019.

"The development of Corridor VC is a strategic priority... as the work supports national economic development and contributes to regional integration by improving connectivity between the capital Sarajevo, neighbouring countries and the EU," the EBRD said in a statement.

The EBRD has so far invested more than 1.7 billion euros in more than 122 projects in Bosnia. The Bank invests in infrastructure development, support for small and medium-sized firms and strengthening of the financial sector.