European Investment Bank (EIB) is to provide a €29m loan for the construction of a 10.6km bypass road in Zwettl, Austria.

The project will be carried out under the public-private partnership (PPP) model by the State of Lower Austria, the Administrative Bureau for Road Works and Road Administration and contractor Umfahrung Zwettl Errichtungs- und Betriebsgesellschaft, which was formed by the Swietelsky and Leyrer+Graf companies.

The contractor will handle the financing, design, building and maintenance works of the project.

"The successful realisation of public infrastructure projects has long been relying on engagement by private investors."

Upon completion in mid-2017, the project is expected to reduce the traffic volume by up to 50%.

For locals, the bypass road will reduce congestion, traffic accidents, levels of noise and air pollution.

The road is currently being used by 16,000 vehicles a day, including approximately 1,600 heavy goods vehicles.

EIB vice-president Wilhelm Molterer said: "The successful realisation of public infrastructure projects has long been relying on engagement by private investors.

"When tapping into this potential, the EIB and its instruments play a decisive role. By joining the financing of the bypass, the EU bank is supporting this long-term project mounted by private partners.

"Furthermore, it is signalling to other promoters and potential investors that complex projects with long maturities can obtain reliable financing."