Republic of Macedonia has become a part of World Bank's regional project over the establishment of specialized facility for reinsurance of catastrophe risks "Europa Re", following the signing of Friday's agreement between Vice Premier and Finance Minister Zoran Stavreski and World Bank country manager Lilia Burunciuc.

The project will enable increased access to funds for protection from natural disasters.

"Macedonia is a region where natural disasters are a common phenomenon. Every year we suffer damages from diverse disasters, such as droughts, floods etc. The problem is there, but the market did not have a product to cover this. That is why this product has been developed", said Stavreski after the signing.

He added Macedonia would take part in the project with US$ 5 million, provided through a World Bank loan with a 22-year repayment period, a 6-year grace period and variable interest rate currently standing at 1.1 percent.

According to FinMin Stavreski, the project would be beneficial for households, economy, SMEs, farmers, i.e. all those who suffer consequences from natural disasters.

Burunciuc stressed the project's significance, since there has been an increasing trend of natural disasters resulting from climate change in Macedonia over the past two decades, along with the fact that the country is located at the Mediterranean seismic belt, which causes earthquakes.

The project foresees the establishment of a joint reinsurance facility "Europa Re", with head offices in Switzerland, which will enable national insurance companies to reinsure products of catastrophe risks. The facility is expected to be operational in 1-1,5 year.

"Europa Re" is expected to assist the insurance market development in the section of catastrophe risk insurance in participating countries. The programme will also work on building technical capacities of local insurance companies, regulatory agencies and policy creators, funded through grants.

Albania and Serbia have also signed agreements, whereas Bosnia&Herzegovina and Montenegro are expected to do the same.