The World Bank's Board of Executive Directors has approved a new loan to Croatia in the amount of US$ 75.3 million for the Trade and Transport Integration Project, which is expected to support Government's efforts to develop the Port of Ploce, the second largest port in Croatia, the World Bank said in a statement on Wednesday.
The euro denominated fixed spread loan is repayable in 15 years, with a 5 year grace period, the bank said.
The project's objective is to develop trade along Corridor Vc by improving the capacity, efficiency and quality of services on the southern end of the Corridor, with a particular focus on the Port of Ploče and on coordination aspects among all corridor participants, the statement said.
The Trade and Transportation Integration Project consists of three components: a port infrastructure development component for the port of Ploče, a trade and transport integration component, and a capacity building component for project implementation.
"As the Port of Ploče has been experiencing significant traffic growth, mostly resulting from industrial restructuring in neighboring Bosnia and Herzegovina, it is vital for Croatia to upgrade the infrastructure and operational capabilities of its second largest port to meet the growing demands in traffic, while maintaining its own financial viability," said Anand K. Seth, the World Bank Regional Director for Croatia, Bulgaria and Romania.
The direct economic activity generated by the traffic represents today about US$19 million per year for the port, the Croatian railways and other Croatian transport intermediaries, the World Banks said.
The Trade and Transport Integration Project, built on a partnership between the Government of Croatia, the Port of Ploče, the World Bank and the European Bank for Reconstruction and Development, is expected to be a major driving force in achieving a direct increase in economic growth for the southern region of Croatia as well as for neighboring countries such as Hungary and Bosnia and Herzegovina, the statement said.
At the regional level, successful project implementation will bring about significant transport cost savings in servicing current and projected business demands from the Eastern Slavonia sub-region, neighboring Hungary and especially Bosnia.
At the local level, the project activities will have a similar effect, increasing current levels of cargo traffic, directly benefiting the Port of Ploče, and at the same time generating economic benefits for the people of Southern Dalmatia through substantial, year-round economic direct and indirect activity.
To date, the World Bank has offered support for 31 projects with a total value of US$1.73 billion, and it has approved 48 grants with a total value of US$51.5 million. The projects completed so far have been assessed as satisfactory. The success of the overall project portfolio over the past years is also above the regional average, and fund disbursement rates are high, the World Banks said.