The European Investment Bank (EIB) has approved a loan to Serbia for the construction of a bypass road in the capital city of Belgrade.

The €40m ($54m) fund will be used to construct the 5.4km Section B5 of the Belgrade bypass from Orlovaca to Avala.

The Belgrade bypass is part of the Pan-European Corridor X, which runs between Salzburg in Austria and Thessaloniki in Greece.

On completion, the bypass will include 48 new bridges and five interchanges, which will help reduce road congestion on the existing urban road network.

In 2007, EIB approved a €180m ($245.5m) loan for the construction of a 20km section of bypass roads and a 27km stretch of a four-lane motorway in the Serbian capital.

Serbia received €60m ($81m) towards the road construction programme and is expected to receive the remaining amount of €80m ($108.6m) next year.