Macedonia officially gets €46.4 million loan from the European Bank for Development and Reconstruction to start construction of the Kumanovo – Beljakovce railway section that will connect us with Bulgaria.

Deputy PM and Finance Minister Zoran Stavreski and the EBRD’s Director for Transport, Sue Barrett signed the loan agreement on Tuesday.

Mr. Stavreski said that the conditions under which EBRD grants the loan to Macedonia are significantly favourable with a 15 year repayment period, 4 year grace period and interest rate which currently amounts to 1.7%.

The project foresees modernisation of this link - Section 1 of the Macedonia Railway Corridor VIII - Eastern Section, Kumanovo – Beljakovce over a length of 30.8 kilometres. The construction of the section is to start in the first quarter of 2013 while field works are to be completed in three to four years. The tender for construction is to be announced next month.

“This corridor will develop a transportation system that will contribute to increasing the trade between Albania, Macedonia and Bulgaria. It will improve both access and connection with the neighbouring countries and thus increase the competitiveness and development of the economy, as well as the communication with the European countries”, said Mr. Stavreski.

The EBRD’s Director for Transport, Sue Barrett, said, "Once the entire Corridor VIII is operational it will give Macedonia a shorter route to the Black Sea ports. It is also expected to stimulate the regional economy by making transportation flows easier."

The project is supported by a substantial grant funding totalling €4 million provided by the EU’s Western Balkans Investment Framework for project design, tender preparation and implementation assistance. The introduction of an energy management system will also be supported by a €175,000 grant from the Central European Initiative.

The project is also expected to stimulate a reform in further areas such as track access charges being in line with the EU rail sector guidelines and the commercialisation of non-core assets across the company. The project also envisages an energy efficiency programme to improve the energy performance of the company.

To date the EBRD has invested over €1 billion in about 80 projects in Macedonia.