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Serbia, World Bank sign agreements worth $192.5 mln

Serbia and the World Bank signed in Belgrade on Friday five loan agreements worth $192.5 million, intended for a range of development projects aimed at improving the economy after more than a decade of wars, isolation and mismanagement.

Serbian Finance Minister Mirko Cvetkovic said after signing the agreements that out of the entire sum, $4.5 million are donations, so Serbia's debt for this loan is $188 million. Cvetkovic said that the government plans to use $43 million for improvements in the eastern Bor region, $21.5 million to reform agriculture, $50 million for irrigation and drainage works, $50 million to overhaul the nation's road network, and $28 million for improving energy efficiency. Of that sum, $20 million were obtained interest-free under highly favorable conditions of International Development Association (IDA), meaning a 20-year repayment period, 10-year grace period, and 0.75% service fee, while the remaining $168 million were obtained under favorable commercial conditions, which means a 17-year repayment period and 5-year grace period.

New director of the World Bank Office in Belgrade Simon Gray, who signed the agreements, said that the project of development of Bor includes increase of employment and environmental protection in that region, and that the project of reform of agriculture refers to the Stara Planina mountain and help in increasing competitiveness among small producers. Modernization of the road network will improve the country's economic development and make it easier for citizens to use employment opportunities, while the project of energy efficiency will be implemented in orphanage centers and hospitals, Gray said.

World Bank Country Director for South-East Europe Orsalia Kalantzopoulos said that the deadline for realization of these projects is from three to four years, and that Serbia will receive the first tranche in a few weeks.

Since 2002 the World Bank has loaned Serbia $725.5 million under IDA conditions. The country also owes the bank $2.16 billion that includes loans used to consolidate the debts of the former six-republic Yugoslavia. (