EIB approved first tranche of 10m EUR for reconstruction of Gazela bridge

Under the new terms of the contract, the European Investment Bank (EIB) approved on Thursday (March 11, 2010) the first tranche of the loan for the Gazela bridge reconstruction project in amount of 10m EUR.

According to EIB's announcement, such decision was made at the request of the authorized organs in Serbia and because of the emergency of the current situation and the concern for public security caused by sudden aggravation of the state of the physical structure of Gazela bridge, as well as accompanying social-economic effects.

The decision is made in accordance with the recent decision of the European Bank for Reconstruction and Development (EBRD) to approve the loan for financing reconstruction of access roads to the bridge.

The withdrawal of the funds from the EIB's loan in amount of 33m EUR, for which the contract was initially signed in 2007, was postponed due to certain number of unresolved issues concerning displacement of families who lived under the bridge. EIB and EBRD carefully supervised the process of displacement conducted by Serbian authorized organs and concluded that, despite the fact that some significant progress is made, certain issues have remained unresolved.

Accordingly, the EIB's Board agreed to limit the first tranche of the EIB's credit funds to the amount of 10m EUR in order to enable commencement of emergency works on reconstruction. Approval of the future tranches is conditioned by the fulfillment of requests related to resettlement in the way agreed between Serbian authorities and the EIB, with the additional contractual obligation that the loan be repaid if specific requests are not fulfilled by the end of this year.