Thursday, January 29, 2009

EBRD will help improve Macedonian roads

The EBRD is lending €50 million to Macedonia to finance the improvement and upgrade of more than 400km of regional and local roads.

These roads form part of key regional network and provide connections to international road corridors. The investments will address an urgent need for road repairs, helping to improve transport links inside the country and support the development of areas to which there is currently limited access.

The construction of the road sections will facilitate local development and regional integration by rehabilitating and upgrading the transport links, increasing access and improving road safety.

The regional component will cover at least 160km of both asphalt and gravel roads in the south, east and west of the country, while the local component will cover approximately 250km of local roads across the country.

- The improvement of these road links will contribute not only to the economic development of Macedonia and its important agricultural sector, but will improve links and trade with neighbouring countries and the EU, reads EBRD press release.

This project is a continuation of the Bank’s financing of road sector improvements in Macedonia. It will support the ongoing road sector reform in the country, including institutional strengthening of Agency for State Roads, the state entity responsible for the operation and maintenance of roads in the country, and road maintenance reform.

The programme will address a plan for road maintenance, road planning and road protection, aimed at improving the efficiency of road transport services and encouraging the use of competitive tendering for both periodic and routine maintenance.

The EBRD loan will be provided in two tranches of €25 million each, with parallel financing by the World Bank of €70 million, which is already committed. Additional technical cooperation has been provided by the EBRD Western Balkans Fund, the EBRD Special Shareholder Fund and the Central European Initiative, totalling more than €3 million.

Sue Barrett, EBRD’s Director for Transport, said that this project demonstrates the EBRD’s continuing commitment to Macedonia and its help to upgrade important segments of the road infrastructure in the country and the Western Balkan region.

Projects like these are key for regional integration, especially given the importance of trade for spurring economic growth and making the country more attractive for investment, Elena Urumovska, the Head of the EBRD office in Skopje, added.

Dr. Trajko Slaveski, Macedonian Minister of Finance, said that the EBRD is an important partner for the country in a number of significant projects. The realization of this project comes at a very opportune time for the country, considering its need for in investments in road infrastructure. The project should create improved living and working conditions for the citizens. Minister Slaveski added that as with earlier projects financed by the EBRD, this loan includes a component for strengthening the capacity of Macedonian institutions which will be directly involved in the realisation of the project.

The Bank has been engaged in the Macedonian road sector since 2003, when it provided a €40m loan to upgrade a section of Corridor X from Smokvica to Gevgelija which was completed in March 2006 and the second phase of the Skopje Bypass which was opened to traffic in July 2008.

Active in Macedonia since 1993, EBRD investments to-date amount to more than €460 million and the Bank has helped generate a further €496 million from its partners. The majority of investments are in sectors including power and energy, general industries, financial institutions and the private sector

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