Bosnia and Herzegovina (BiH) has secured a financial package of €204m from the European Investment Bank (EIB) and the European Union (EU) to build a section of a pan-European highway.

The financial package includes a €204m loan from EIB and a €64m grant from the EU.

This will be used to build a 12.4km section of the highway, which connects Budapest in Hungary and the Croatian port of Ploče through BiH.

Work includes the construction of four viaducts, two twin-tube tunnels, three bridges, and one road interchange.

An operation and traffic control centre, as well as a railway overpass, will also be constructed under the project.

This project aims to create a faster long-distance transport link with Croatia, supporting BiH’s exports and economic development.

EIB vice-president Dario Scannapieco said: “The EIB is particularly proud of our continuing commitment to the economic and social development of Bosnia and Herzegovina and the Western Balkans.

“This time, the EIB and the EU have blended their funds to create a €204m financing package to help Bosnia and Herzegovina develop a modern highway network and enable easier and faster movement of people, goods and services along the key pan-European Corridor Vc.

“This investment will have a positive economic impact beyond Bosnia and Herzegovina, and will benefit citizens and businesses in Croatia, Hungary and the Western Balkans.”

According to BiH Finance Minister Vjekoslav Bevanda, construction is expected to be completed between 2022 and 2023.

Recently, EIB awarded a €90m loan to the Slovenian motorway operator DARS to expand the Karavanke Tunnel.

The financial institution also lent €350m last December for highway improvements in the Netherlands.