Precise Conditions: KS Government Seeks 10 Million KM Loan from EBRD for Water Supply Network Rehabilitation

The exchange of information and details regarding securing the first tranche of a loan from the European Bank for Reconstruction and Development worth 10 million KM for the reconstruction and rehabilitation of the water supply network was the topic discussed today by the Prime Minister of Sarajevo Canton, Elmedin Konaković, and the ministers of communal economy and infrastructure and finance in the Cantonal Government, Senad Hasanspahić and Jasmin Halebić, with the director of the European Bank for Reconstruction and Development (EBRD) Representation in BiH, Ian Brown, reports the Patria news agency.

According to Prime Minister Konaković, the rehabilitation and reconstruction of the water supply network is the number one project for this government in its remaining term.

-Our goal is for concrete works on the ground to begin as early as June or July. We intend to allocate part of the funds from the budget for 2016, in order to select as soon as possible a credible international company that will carry out the works in the highest quality manner and using the most modern technology, and accurately and precisely diagnose the condition and all deficiencies in our water supply network, on which the subsequent requested amounts of credit funds from your bank will depend, emphasized Prime Minister Konaković.

Director Brown emphasized that in the first step, it is necessary to determine the exact amount of necessary funds as well as a precise specification, according to EBRD rules, of why and how these funds will be spent, while the remaining phases of the loan may depend on the diagnosed condition.

The government representatives were also interested in other lending conditions, especially those involving the calculation of so-called "penalties" on unrealized but reserved funds, as well as the length of the grace period.

From the EBRD, they were informed that this cost begins to be mandatorily calculated after the expiration of 60 days from the date of signing the Loan Agreement. They were also informed that the act of signing the Agreement can be postponed until the moment of actual need for spending the loan funds, and that during that period all necessary tenders can be announced and the procedure for selecting actors, i.e., contractors, can be carried out, taking into account the necessary time for ratification of the mentioned loan agreement by the legislative branch of government.

-The grace period at the EBRD depends on the type of project being financed, and the longest given so far is 42 months. At this moment, it is not possible to estimate the length of the grace period for the loan we are discussing today, explained Brown, emphasizing that the same lending conditions apply to all 37 countries that have approved loans from this bank, and that the mentioned conditions were established and have been in effect since the 1990s.

They also proposed that all preparatory actions for the implementation of this project be carried out and completed under EBRD conditions, so that it would be possible for the budget funds allocated and spent for their implementation to be planned within the loan funds, the KS Government announced.