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The European Investment Bank, the financing arm of the European Union, is seeking a co-ordinating role in the financing of infrastructure projects in south-east Europe as part of international efforts to accelerate reconstruction in the wake of the war in Yugoslavia.
Sir Brian Unwin, EIB president, said yesterday that the bank's Balkans task force had identified a first list of potential projects worth around E6bn ($6.3bn), that would satisfy the bank's lending criteria and could take at least three to five years to complete.
The EIB's study was presented yesterday to the high-level steering group on economic co-ordination in south-east Europe meeting in Washington. However, the EIB still needs permission from the EU to allow it to operate in Kosovo, which remains under Yugoslav sovereignty under the terms of United Nations Security Council resolutions.
The EIB is conducting a further mission in the region this week to seek to examine more closely projects that include investments in roads, railways, ports and airports as well as in water supplies, telecommunications and energy and the Danube waterway, which has been blocked by the collapse of bridges hit during Nato's 11-week bombing campaign against Yugoslavia.
Sir Brian said that priorities had to be very clear since investment needs were "enormous" and financial resources were "extremely scarce", and projects must generate "an adequate economic return", he said.
Financial institutions still face significant obstacles in gaining backing for investment in regional infrastructure projects, as many western governments, in particular the US and the UK, remain reluctant to provide financial support for Serbia, as long as Yugoslav president Slobodan Milosevic remains in power.
The EIB said that a special case could be made for restoring urgently the function of the Danube as an international shipping artery serving trade between central Europe and the Black Sea.
The report says that clearing the Danube "is likely to be take several years", estimating during the latest war in Yugoslavia 50 road bridges were damaged or destroyed, of which nine were across main rivers, the Danube and the Sava.
Some 19 railway bridges and 12 airports were severely damaged. The destruction in Yugoslavia has badly affected trade between the Balkans and central and western Europe as the country straddles most of the main transit routes.
The report recommends that projects in the energy sector should prioritise the interconnection of national networks with the aim of improving the quality of power supplies in the region. There is little need for new electricity generating capacity.