The European Bank for Reconstruction and Development (EBRD) has agreed to provide a loan of €85m to finance the construction of the Niš-Pločnik section of Peace Highway in Serbia.

The loan amount will be used for constructing 39km of road stretch between the cities of Niš and Pločnik in the south of Serbia.

The road will link Niš with Kosovo and Albania and will improve regional integration in the Western Balkans.

EBRD Western Balkans regional director Zsuzsanna Hargitai said: “Following our successful cooperation with the Serbian authorities on transport projects, including Corridor X, the Belgrade Airport concession and Serbian Railways, we are pleased that we can now contribute to the construction of this new highway in the south of the country.

“It is an investment to develop the common regional market in the Western Balkans and facilitate trade and the movement of people.”

Part of Route 7 of the Western Balkans core network, the road is said to be the extension of the Trans-European Transport Network.

In addition, the European Investment Bank (EIB) and the European Union (EU) will co-finance the construction of the ‘Peace Highway’.

For this project, EIB will provide a loan of €100m while the EU will offer a €40.6m investment grant and funding for the project preparation under the Western Balkans Investment Framework.

Peace Highway is a flagship project under the recently announced EU Economic and Investment Plan for Western Balkans.

Upon completion, the project is expected to benefit people and businesses in Serbia’s south region by enabling quicker and safer journeys.

The new highway is expected to further improve regional economic cooperation between Albania, Kosovo and Serbia.