Press Release

OPEC Fund supports construction of bypass road in Bosnia and Herzegovina with US$18 million loan

37/2005 April 21, 2005, Vienna, Austria

The OPEC Fund for International Development today signed a US$18 million loan agreement with the Federation of Bosnia and Herzegovina towards construction of a bypass road around the capital, Sarajevo. The new road will help eliminate traffic congestion in the city and provide an integral link to the Pan-European Corridor, which runs from Hungary, through Bosnia and Herzegovina, to the Croatian port of Ploče.

Bosnia and Herzegovina’s economic development is seriously constrained by the poor state of the road transport infrastructure, particularly in the Sarajevo region. This holds true for one of the country’s main roads, the M-17, which connects the city Zenica in the north to Mostar in the south and passes through suburban areas some 10 km west of Sarajevo. In addition to carrying both transit and local traffic, part of the corridor provides the main exit route from Sarajevo to the southwest of the country. These heavy traffic loads cause severe bottlenecks that increase travel time and raise transport costs considerably.

The project will construct a 10 km-long north-south bypass road and an east-west 4.5 km link road that will connect the bypass with Sarajevo. As parts of the bypass will run through hilly terrain, a number of tunnels, bridges and viaducts will be constructed. Once completed, the diversion of much of the existing traffic will enable the population to enjoy improved access to the greater Sarajevo region, reduce the incidence of accidents and alleviate air pollution and noise. The project’s civil works component will also create employment opportunities for the local population.

This is the Fund’s third public sector lending operation in Bosnia and Herzegovina, with the first two supporting projects in the education and agriculture sectors. Additionally, one line of credit has been signed for the private sector to support the development of small and medium-sized enterprises. The Fund has also extended five emergency grants to Bosnia and Herzegovina.

Today’s agreement was signed in Vienna by H.E. Ms. Ljerka Marić, Minister of Finance & Treasury of the Federation of Bosnia and Herzegovina, and by H.E. Mr. Jamal Nasser Lootah, Chairman of the Governing Board of the OPEC Fund.

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