The European Bank for Reconstruction and Development (EBRD) is set to provide a €71m loan for the construction of a new, 30km-long section of highway in Kosovo.

It will be used to develop the section to connect Kijeve, a village near the capital Pristina, and Zahaq, a village near the major city of Peje.

The highway is set to form part of Route 6b of the Western Balkans Comprehensive Network.

"The project demonstrates the government’s commitment to the development of the country’s road infrastructure, which is a key factor for economic growth and regional integration."

In addition to the EBRD funding, Kosovo will also receive an additional €80m loan from the European Investment Bank (EIB) and a €3.2m grant from the Western Balkans Investment Framework (WBIF) for preparatory works related to the development.

EBRD Transport director Sue Barrett said: “Better connectivity will benefit the many small businesses of Kosovo, which to date have been affected by unsatisfactory transport connections.

“The project will also support improvement of road sector financing, as well as road sector reform by developing by-laws and regulations on road safety.”

The investment is also expected to support the commercialisation of Kosovo’s road sector and assist in the procurement of appropriate funding for road development and maintenance during future projects.

Kosovo Minister of Finance Bedri Hamza said: “This project is a high priority for our government as it will improve connectivity within Kosovo’s regions and its neighbouring countries.

“The project demonstrates the government’s commitment to the development of the country’s road infrastructure, which is a key factor for economic growth and regional integration.”

EBRD has invested more than €220m in more than 50 projects across the state to date.