EBRD loan to revive Bosnia’s railway sector

SARAJEVO (Reuters) – The European Bank for Reconstruction and Development (EBRD) will this year approve a 140-million-euro ($170-million) loan to revive Bosnia’s railways sector, officials said on Friday. The move came after the country’s central parliament passed a law reforming the muddled railway system, a main condition for the release of the funds. «The adoption of the law and its implementation are a milestone for the reform of the railways but it is very important the law is implemented as soon as possible,» Serban Ghinecu, EBRD’s principal banker and operation leader, told Reuters. The law allows for the creation of an infrastructure management company and a railway regulatory body. Both will supervise passenger and freight operations in the two separate rail companies of the Serb Republic and the Muslim-Croat federation, Bosnia’s two autonomous regions. The law also paves the way for a restructuring plan that will see rail services privatized while the state remains in charge of the infrastructure. Ghinescu said the project would be co-financed by the EBRD and the European Investment Bank. «The preparation of the loan is subject to due diligence, negotiations and approval of the bank’s management and board of directors… but we aim to sign it by the end of 2005,» he said.

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