A Kuwaiti fund and Bosnia's state officials signed on Tuesday a €34 million worth loan contract and project agreement for construction of a highway section on the Corridor Vc, a pan-European road link, connecting Croatia's Adriatic coast with Hungary and rest of Europe through Bosnian territory.

“I am happy that today we made one more important step towards the construction of highways in Bosnia and Herzegovina because by signing of this loan agreement between Bosnia and Herzegovina and the Kuwait Fund for Arab Economic Development will enable the investment of €34 million in the project of Nemila-Donja Gracanica highway construction,” said Bosnian Finance Minister Vjekoslav Bevanda who signed the loan contract on behalf of the state government.

The investment will enable construction of 17.7 kilometres of the highway, a very important section on the Corridor Vc, said the minister.

He assessed the loan conditions as favourable pointing out that the pay off deadline is 20 years i.e. 15 years plus five-year grace period, with an interest rate of two percent per year.

The state-owned company ‘Autoceste FBiH’ is in charge of the project implementation.

Deputy Director General at the Kuwaiti fund Marwan Al-Ghanem assessed the contract signing as “an important step in the development of mutual cooperation between the fund and a friendly country.”

He recalled that the Kuwaiti Fund has been present in Bosnia since 1997 and so far has approved five loans under favourable conditions in the amount of some $124 million as well as two grants amounting to some $1.2 million.

“We cherish our cooperation with Bosnia and Herzegovina and we assure you in our continued support in accomplishing the common goals, enhancement of friendly relations between our two countries,” said Al-Ghanem.

‘Autoceste FBiH’ General Manager Adnan Terzic stressed the importance of starting the construction as it would connect the capital city of Sarajevo with the town of Zepce, north of it.

Bosnia's Federation (FBiH) entity has 102 kilometres of motorways, which fully belongs to the Corridor VcFore. Republika Srpska (RS) entity constructed three kilometres more, but none of it makes a part of this pan-European road link.

To connect Sarajevo and Banja Luka, the second largest city in the country, RS has to construct some 10 more kilometres, while FBiH needs to build the part of the corridor from the central city of Zenica to Doboj in the north.