Bosnia’s Finance Minister and Director for Transport at the EBRD have on Wednesday signed a loan agreement worth EUR 180 million for Bosnia to build two sections and a tunnel on Bosnia’s part of the pan-European 5C Corridor.

The 5C highway will improve Bosnia’s connectivity with European markets, which is key for the further development of the country, European Bank for Reconstruction and Development Transport Director, Sue Barrett, said at a press conference following the signing of the document.

She explained that the loan will be paid out in two tranches, one worth EUR 120 million for the construction of the Ivan tunnel and a section in the country’s north, and another, worth EUR 60 million, which will be made available next year and used for the construction of a section near the southern town of Mostar.

A total of 16 kilometres of road construction will be funded with this loan.

‘The European Union is our strategic partner in the construction of the 5C corridor and we are very happy that the Western Balkans Fund (WBF) has approved a significant grant for this loan,’ Barrett said.

Head of the EU Delegation to Bosnia, Lars-Gunnar Wigermark, also spoke at the press conference, saying that the EU has already secured EUR 100 million from its grants for the 5C project in Bosnia and that EBRD loans have extraordinarily favourable interest rates.

‘We forward direct messages from Brussels and with this, we send a clear signal to Bosnia and countries in the Western Balkans that we want you to be part of our network of connections, our infrastructure and the network of the entire EU,’ he said.

The loan is to be paid off within 15 years, including a four-year grace period, and is expected to be co-financed from the EU investment grant through WBF to the tune of EUR 11.8 million.