Grants and loans boost south-east

The Next Wave of EU Candidate Countries and Potential candidates is benefiting from a range of loans and grants for infrastructure projects. Schemes in current candidate countries – Bulgaria, Croatia, Macedonia, Romania and Turkey – can be eligible for the Commission-administered Pre-Accession Instrument for Structural Policies (ISPA) grants. All European countries can receive loans from the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB).

Croatia has received its first ISPA grant, with the Commission deciding on two Financing Memoranda for projects in the transport and environment sectors worth € 22,5 and € 28,8 million. The total value of the two projects – the Karlovac Water and Wastewater Programme and modernisation of a 38 km section of the main Zagreb to Belgrade railway – is € 127,4 million, with ISPA contributing € 51,3 million.

Bosnia and Herzegovina's railway system is to receive a € 70 million loan from the EBRD to help renew 104 km of track along the north-south pan-European Corridor Vc and 70 km of the east-west pan-European Corridor X. The loan is part of a wider € 169 million financing package for the project, which includes an EIB loan of up to € 84 million.

The EU has provided € 4 million in technical cooperation funds to the scheme for, among other things, procurement assistance, while the EBRD's Central European Initiative has provided funding for the environmental impact assessment. Bosnia and Herzegovina is described by the Commission as a 'potential candidate country', along with Serbia and Montenegro and Albania.

The EBRD is also lending Romania € 145 million, its largest loan to date in the country, to boost infrastructure projects around the Black Sea port of Constanta. The loan will go towards 15 bridges, and 105 national road sections, as well as new 22,9 km bypass around Constanta to ease congestion. “Creating the bypass will on the one hand decrease traffic levels in the city, improving safety levels, and it will also enable businesses using the port to transport goods quicker and more efficiently,” said EBRD director for transport Riccardo Puliti.

Ebrd Record

The EBRD is expected to make loans totalling a record € 4,3 billion for 2005. It signed 82 projects totalling € 2,02 billion in the first nine months of the year compared to € 2,27 billion for 71 schemes in the same period of 2004. However, an EBRD spokesman said the full year total is “expected to rise to 159 stand alone projects, which represents a record year for the Bank.”

Projects included supporting cross-border investment in the Western Balkans by working with a Croatian brick company in Bosnia and Herzegovina, financing a 50000 m² logistics and warehousing centre in Moscow and improving water and wastewater infrastructure in Romanian towns and cities.

Profit after provisions for the first nine months was € 821,5 million, compared with € 266,8 million a year earlier, reflecting strong returns from the EBRD's equity project portfolio. Steven Kaempfer, vice president, finance and acting first vice president, said the trend would continue given “the strong pipeline of potential new projects throughout the region.”