Bosnia Herzegovina road loan

By Sandy Guthrie01 May 2012

The modernisation of transport infrastructure in Bosnia and Herzegovina is being supported by the European Bank for Reconstruction & Development (EBRD) through a €150 million sovereign-guaranteed loan.

This loan is for the construction of a part of the new Banja Luka to Doboj motorway. This segment is the main east-west link in Republika Srpska, one of the two main political entities of Bosnia and Herzegovina. Banja Luka is the second largest city in Bosnia and Herzegovina and the administrative capital of Republika Srpska. Doboj is in the northern part of the region.

In conjunction with this investment, the EBRD will also support the preparation of the first public-private partnership (PPP) project for the main north-south link in Bosnia and Herzegovina, the Doboj to Vukosavlje segment of Corridor Vc.

The Banja Luka to Doboj motorway is a 75km road linking Banja Luka to the new Corridor Vc motorway at Doboj. The EBRD loan will be used to finance the construction of the eastern segment of the motorway from Prnjavor to Corridor Vc at Doboj - a total length of 37km.

Sue Barret, EBRD's transport director, said, "Modern infrastructure is imperative for the economic growth and regional integration of Bosnia and Herzegovina, and the EBRD is firmly committed to support the development of a reliable transport network in the country and the neighbouring region."

Dusan Topic, general manager of RS Motorways, said, "This project is a continuation of successful co-operation with the EBRD. We managed to secure these funds to start the construction of the Banja Luka to Doboj motorway at the same time as we are completing the Banja Luka to Gradiska motorway, including the Mahovljani interchange."

The loan will mature in 15 years and is structured in two equal tranches. The project is supported by technical assistance grants provided by the bank and the Western Balkans Investment Fund. The western segment of the motorway, from Banja Luka to Prnjavor, is expected to be financed by the European Investment Bank.

The EBRD said the project would facilitate the introduction and private sector participation in toll collection. Additionally, through this investment, the EBRD will support the tendering of a PPP contract for the Doboj to Vukosavlje section of Corridor Vc in Republika Srpska. This forthcoming project is expected to be one of the first road PPPs to be developed according to best international standards in the western Balkans, according to the EBRD.

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