The European Bank for Reconstruction and Development (EBRD) signed today in Sarajevo an official contract with the BiH Ministry of Finance committing to a favourable loan of 110 million euros for the construction of the Mostar North to Mostar South section on the Corridor 5c. For this section the European Union committed 150 million euro in grants.
This is the final section of the southern leg of the Corridor for which funding is being secured and will be connected to other sections south of Mostar to the Croatian border. Once these sections are completed, the motorway from Mostar to Croatian south can be fully functioning. This project includes construction of an interchange at the entrance of the city, and a 15-kilometre long dual carriage motorway section which will help ease traffic congestion around the city of Mostar. The section includes also a toll station, five tunnels with a total length of about 6 kilometres and ten viaducts.
With this latest financing, the EBRD’s total contribution to the Corridor 5c, a key infrastructure project in Bosnia and Herzegovina, exceeds 1 billion euro, with further support of 870 million euro provided in investment grants from the EU.
“We are pleased to extend this additional financing for Corridor Vc and with it provide a new momentum for the completion of the whole corridor. This key infrastructure project will lead to significant every-day benefits to people and businesses across the country, reducing travel times and facilitating trade with key export markets. The Government has also taken an important step in mobilizing commercial co-finance which is required to close the financing for this priority infrastructure project and together with the EU and the EIB we continue discussions with the authorities to progress all sections under construction and discussion,” said the EBRD Head for Bosnia and Herzegovina Manuela Naess.
The European Union is one of the key strategic partners to Bosnia and Hercegovina in the construction of the Corridor 5c. The investment grant for the Mostar North – South section in the amount of €150 million from the EU is being channelled through the Western Balkans Investment Framework (WBIF) and is expected to be signed in the coming months.
“The construction of this particular section will undoubtedly yield numerous benefits for local communities, such as shortened travel times, enhanced road safety and reduced transit through Mostar. The financial support by the EU, EBRD and EIB underscores our commitment to fast-track the completion of the Corridor 5c which will encourage long-term economic recovery, sustainable jobs and economic integration in the region. To that end the European Union has committed 870 million euro in grants to facilitate its completion,” said the Deputy Head of EU Delegation to BiH, Adebayo Babajide.
For the first time, a section of this vital transport artery is also co-financed by commercial banks, with a total of 110 million euro, which is important given the large infrastructure needs in the country and the need to further improve connectivity and transport links to neighbouring countries.
The development of Corridor 5c is a strategic priority for Bosnia and Herzegovina. The 325 km motorway will cross the country from the border with Croatia near the port of Ploce in the south to the northern border in Svilaj and lead onwards to Budapest, Zagreb and Belgrade. It is currently the biggest construction project in the country.
