News in English     | 19.02.2019. 16:42 |

Loan agreement signed with Kuwait Economic Development Fund for 5C Corridor

FENA Darinka Mitrović

SARAJEVO, February 19 (FENA) - Deputy Chairman of the Council of Ministers of Bosnia and Herzegovina and Minister of Finance and Treasury of BiH Vjekoslav Bevanda signed today a loan agreement with the representative of the Kuwait Fund for Arab Economic Development (KFAED) Marwan Al-Ghanem, and the Director of the Motorways of the Federation BiH, Adnan Terzić signed a contract on the construction of the section of the motorway on the 5C Corridor, Nemila - Donja Gračanica.

Bevanda said that another important step has been made in the construction of motorways in BiH, because the signing of the loan agreement between BiH and the Kuwait Fund will allow the investment of about 34 million euros for the project of Nemila - Donja Gračanica motorway section.

As for the terms of the loan, they are favorable and the repayment term is 20 years, 15 years plus five years of grace period, and the interest rate is 2 percent annually.  

The Kuwait Development Fund, as Bevanda emphasized, is a significant partner for BiH because Kuwait, as a friendly country, has been supporting projects in the field of infrastructure and other sectors for many years.

“The money secured by this loan agreement will finance the section of the motorway from Nemila to Donja Gračanica in the length of 17.7 kilometers, which is very important road communication on the corridor 5C and has been financially supported by other creditors as well. It would be redundant to underline how important these infrastructure projects are for the development of BiH's economy and employment,” Bevanda said.

A representative of the KFAED, Al-Ghanem, said that the signing of this agreement is an important step in the development of the mutual cooperation between the Fund and BiH.

The Kuwaiti Fund, he added, attaches special significance to this project, as it will contribute to the improvement of the social and economic situation in BiH through improving the transport links between BiH and Central and Eastern Europe and increase the efficiency of the road infrastructure on the Nemila - Donja Gračanica section.

He reminded that the Kuwaiti Fund has been present in BiH since 1997. To date, the fund has granted five loans to BiH under favorable terms, and their total amount is about USD 124 million. In this way, the Fund participated in the financing of development projects in different sectors, and two grants for technical assistance were also approved, with a total amount of USD 1.2 million.

The signing of the agreement, as stated by Director of the FBiH Motorways, Adnan Terzić, is another contribution to the construction of the motorway on the 5C Corridor.  

Terzić also noted that they are planning to take up loans with domestic commercial banks to reduce exposure to European banks.

Terzić added that he hopes to round-up the project by mid this year and that the local banks will provide about 250 million euros for the construction of the Corridor and secure and will finance the Mostar-North - Mostar South section in the length of 15 kilometers.

“We are currently working on the 22 kilometers and in the south of the country and in the area around Zenica. Also, we are currently in the allocation phase for the three lots, 21 kilometers long, along with preparatory works for three more lots in the length of almost 20 kilometers that have been completed,” said Terzić.

(FENA) S. R.

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