EBRD supports Zagreb-Rijeka motorway upgrade

EBRD finances new airport terminal in Armenia

Portugal leads the way in coastal development

Mongolia to join EBRD as country of operations

US housing market slowing

Price of Japanese land rises

EBRD supports Zagreb-Rijeka motorway upgrade

Croatia ’s coastline is becoming more easily accessible thanks to EBRD financing for the completion of the Zagreb-Rijeka motorway and the upgrading of this road from a single to a dual carriageway.

The EBRD is supporting the completion of this motorway construction, which is expected to boost tourism and trade, with a €50m loan to the state-owned Autocesta Rijeka-Zagreb (ARZ). The loan complements a €210m loan provided by the European Investment Bank.

The motorway connects the Croatian capital Zagreb with Rijeka, the country’s third largest city with 150,000 inhabitants and its gateway to the Adriatic, a popular destination for tourists. The city's economy largely depends on sea transport, shipbuilding as well as tourism. Rijeka is also an important junction with links to the peninsula of Istria to the west and the city of Split in the south.

EBRD finances new airport terminal in Armenia

The EBRD is lending $20m to Armenia International Airports (ArIA) to finance the completion of a new passenger terminal at Zvartnots Airport in Yerevan, including the acquisition of modern equipment to further upgrade the quality of service, as air traffic through the capital increases.

Sharp improvements in the Armenian economy and expanding tourism have boosted the number of passengers passing through the airport, which is likely to top the 1.15m mark by the end of this year.

“This project will play an important role in the development of external transport links and an efficient transport system for Armenia, a land-locked country heavily dependent on air-transport services”, said Michael Weinstein, head of the EBRD office in Yerevan.

The deal is being undertaken jointly with DEG, part of the German KFW Group, which is providing a further loan of $10m.

ArIA operates the Zvartnots Airport under a management contract signed in 2002 and is owned by a New York-based holding company.

Portugal leads the way in coastal development

According to a new report published by the European Environment Agency (EEA), artificial surfaces (primarily roads and buildings) in coastal zones increased in almost all European countries between 1990 and 2000.

Portugal led the way with the fastest development in Europe (34 % increase in ten years), followed by Ireland (27 %) and Spain (18 %). France, Italy and Greece made up the other top six countries.

Mongolia to join EBRD as country of operations

The EBRD is shifting the borders of its activities further east for the first time, following acceptance by all of its shareholders to admit Mongolia as a country of operations. The admission will allow the EBRD to start financing projects in this vast, landlocked country of 2.8m people bordered by Russia and China.

An EBRD delegation met the Mongolian Prime Minister in Ulaanbaatar on 18th July to assess business opportunities in the country. The EBRD plans to work with the Mongolian government and the business community, specifically with the aim of helping to finance the development of private enterprise and the process of privatisation.

As in other Early Transition Countries (ETC) countries, SMEs and microfinance will be a priority. Another key goal will be to strengthen the financial sector. The Bank will also seek ways to help finance the improvement of Mongolia’s infrastructure.

“The EBRD is delighted to be able to start working fully with Mongolia. We see Mongolia’s admission as a recipient country as a natural continuation of the work the Bank started in central and eastern Europe 15 years ago”, said EBRD President Jean Lemierre who is expected to visit Mongolia in September.

As a prelude to its becoming a country of operations, the EBRD has already been working with Mongolia to secure grants from donor countries to help finance the transition to a market economy, including legal reform. The Mongolian Cooperation Fund was set up in March 2001 with total funds from donors of €10.3m.

So far, the Bank has worked on 45 projects, committing €8.5m of MCF funds to provide technical support in such areas as financial institutions, aviation, telecommunications and power. The EBRD already has a representational office in Ulaanbaatar and will have a fully operational office in place by the end of this year.

US housing market slowing

The residential property market in the United States is now showing clear signs of waning and analysts say that has worrying implications for consumer spending in the world’s largest economy.

Most economists agree that housing demand is likely to slow further in coming months, after recent interest rate hikes and soaring energy prices.

Price of Japanese land rises

The price of land in Japan rose for the first time in 14 years on the back of a positively active property market, according to the Japanese government.

The Japanese National Tax Agency reveals that the average price of Japanese land alongside major roads rose 0.9% to 114,000 yen per sq m in January 2006 compared to the same time a year earlier.