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EIB signed EUR 100m loan to finance construction of Niš and Merdare highway

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• The EU Bank has signed a EUR 100m loan to finance the construction of the new highway linking Niš and Merdare
• The project will also benefit from a EUR 48m investment grant from the Western Balkans Investment Framework, an EU-led initiative
• The project, known as the Highway of Peace, represents a concrete step towards regional cooperation and reconciliation
• EU Commissioner for Mobility and Transport Violeta Bulc attended the signature event

The European Investment Bank (EIB) is continuing to support transport infrastructure in the Western Balkans region by signing a EUR 100m loan to build the new highway linking Niš and Merdare (a village in the municipality of Kuršumlija) in Serbia. The project concerns the construction of the first 32 km (out of 100 km in total) section – also called the Highway of Peace – connecting Niš, one of the largest cities in Serbia, with Priština. The new road is part of the 314 km-long corridors connecting Southern and Eastern Europe.

The project is worth EUR 255m and will also be supported by EUR 48m in grants under the Western Balkans Investment Framework platform (WBIF), consisting of a EUR 40.6m investment grant and a EUR 7.4m technical assistance grant for project preparation. It is expected that the project will be completed by the end of 2024.

The project includes the construction of four grade-separated junctions, six tunnels ranging from 200 to 1 200 m long, nine major bridges between 100 and 1 000 metres long, as well as rest areas, a local control centre and platforms for service stations. It will be constructed as a single carriageway but will be designed for subsequent easy upgrading to full Trans European Motorway standards when traffic reaches the requisite level, expected in about 15 years’ time.

The finance contract and the investment grant were signed in Belgrade in the presence of the EU Commissioner for Mobility and Transport Violeta Bulc. The documents were signed by the EIB Director for Italy, Malta, Slovenia, Croatia and Western Balkans Miguel Morgado, the Serbian Deputy Prime Minister and Minister of Construction, Transport and Infrastructure Zorana Mihajlović, the Minister of EU Integration Jadranka Joksimović, and the Assistant Director of the Corridors of Serbia Dušan Purić.

EU Commissioner Violeta Bulc emphasised the following: “We are stepping up our work in support of modernised infrastructure in the Western Balkans region. This highway will improve road safety and efficiency while enabling better connectivity within the region. Even more so, this project is a concrete example of increasing cooperation and reconciliation between the peoples of Serbia and Kosovo.”

EIB Vice President Dario Scannapieco stated: “The EIB has strongly supported the infrastructure sector in the Western Balkans since the beginning of its activity in the area more than 40 years ago. I am proud that the EU bank will support this project, for its crucial geopolitical importance: not by chance, this section of this trans-European transport network is also known as the Highway of Peace.”

Deputy Prime Minister Zorana Mihajlović added: “The Niš-Merdare highway is one of the six highways that Serbia is starting to build this and next year. This highway is significant both for its regional connectivity – as it will connect Serbia with Albanian ports on the Adriatic Sea – and for the faster development of the districts in Southern and Central Serbia that the new highway will connect. Infrastructure is not just concrete and asphalt, so I expect that this project will help to build a better future for this region and will create a better life for all the people who live here.”

Serbian Minister of EU Integration Jadranka Joksimović said: “This project is important for regional interconnectivity, which will be a significant impetus for the future growth and development of the region, and especially for Serbia. It is part of our joint effort with the EU to promote infrastructure connectivity and connectivity in general. Investment in infrastructure has never been a wasted investment, and everyone benefits – both Serbia and the region and the EU. We managed to negotiate a significant grant of EUR 40.6m from the Western Balkans Investment Fund while securing the rest of the funds through a favourable credit line with our EIB partners, with whom we have collaborated on other infrastructure projects in Serbia.”

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