Bosnia and Herzegovina: EUR 60m for water and wastewater treatment

The European Investment Bank (EIB) is lending EUR 60 million for implementation of the water and sanitation projects of municipalities and cantons in the Federation of Bosnia and Herzegovina. This will help to improve the quality of life of the country’s citizens and meet Bosnia and Herzegovina’s needs regarding future compliance with EU environmental legislation. The EIB loan will finance an investment programme for the water and wastewater sector in 15 towns that will result in an improvement and expansion of water supply and sewerage systems and the construction of wastewater treatment plants. The Bank would be prepared to consider a similar operation for Republika Srpska, representing the other entity of Bosnia and Herzegovina.

The EIB loan will cover up to 50% of the total costs of the planned projects that will be co-financed by the budgets of the Federation of Bosnia and Herzegovina and the country’s municipalities and cantons and the EU Instrument for Pre-Accession. The remaining funds will be provided by the European Bank for Reconstruction and Development and the World Bank, representing another example of the good coordination and cooperation among all three international financial institutions in the Western Balkans.

At present, project preparation in a number of towns is already in progress, assisted by grants provided by the European Union under the Environmental Project Preparation Facility. Some of the required feasibility studies have already been completed in cooperation between the municipal authorities and internationally experienced consultants, e.g. in Velika Kladusa, Orasje and Bosanski Petrovac, and more are to be undertaken in the course of 2008.

Background:

The EIB, the European Union’s bank promoting European objectives, has provided loans in Bosnia and Herzegovina exceeding EUR 760 million since 2000, including the current loan. EIB lending in the country is on an upward trend. In 2007 alone, the Bank granted loans in the country amounting to some EUR 272 million for various energy and road rehabilitation projects as well as the investments of small and medium-sized companies through indirect support via partner financing institutions operating in the country.