Government signs Road rehabilitation agreements with two European banks

The Government signed on Thursday, June 28 the Financing Agreement on on the Road Sector Programme with the European Investment Bank (EBI) and the European Bank for Reconstruction and Development (EBRD). The Financial Agreement was signed by Torsten Gersfelt, EIB vice president, Mihail Pop, Moldova’s Minister of Finances, and Alexander Auboeck, Business Group Director for Infrastructure at EBRD. The value of the proposed credits amounts to EUR 30 mln each. They will be provided in two stages: first EUR 12.5 mln and EUR 17.5 mln. The financing granted by the European banks will be disbursed starting 2008. The projects are offered at preferential interests for a period of 15 years with a grace period of 5 years. The Government plans to use the money for refurbishing the main roadways on a length of about 500 km. The project will be implemented in two stages. About 200 km of the segment Chisinau-Balti will be refurbished during the first stage, and 300 km of the Chisinau-Hancesti roadway will be repaired during the second stage. The total cost of the project exceeds EUR 100 mln. The total cost of the project on national road rehabilitation tops an estimated 100 mln euros. The necessary funds will be compensated also by the International Development Agency’s loan, estimated at up to 16 mln US dollars. Moldova’s Road Rehabilitation Programme is planned for 2008 -2017, and within this period all the national and international roadways with a length of about 3.5 thousand km are to be refurbished. Minister of Transports and Road Management Vasile Ursu said that at present there is no need for new roadways in the country, but only to refurbish the existent ones. According to him, the experts of the World Bank said that about MDL 1.8 mln are necessary annually to maintain and refurbish the roadways in Moldova. Mihai Pop mentioned that besides the international financing for the refurbishment of roadways, the Government will contribute by increasing by MDL 20 mln the Road Fund every year. The Minister of Finances expressed his hope that the signing of the Agreement with the European banks will be a good example for the potential investors in the economy of Moldova.