CONTRACT ON COLLATERAL BETWEEN CROATIA, EIB GOES INTO FORCE

ZAGREB, Aug 21 (Hina) - A law confirming a contract on collateral between Croatia and the European Investment Bank (EIB) for the partial financing of construction works on the Rijeka-Zagreb highway, worth 60 million euros, went into force on Wednesday. #L# EIB officials and representatives of the Rijeka-Zagreb Highway company signed in Rijeka on June 24 a 60-million-euro contract on the partial financing of engineering and construction works on the highway. The funds are sufficient to complete the financial scheme for the construction of the 146.5-kilometre highway, which is to be completed by June 2004. The contract includes a variable interest rate which can amount to EURIBOR plus 0.40 percent at the most, with a repayment term of 20 years and a 5.5-year-long grace. The contract, for whose execution the Croatian state has provided guarantees, is subject to Anglo-Saxon law and possible disputes will be settled before British courts. The EIB has estimated the total cost of the project of two highway sections at 177 million euros, of which 57 million are secured by the Rijeka-Zagreb Highway company, 60 million was borrowed by the European Bank for Reconstruction and Development (EBRD), and 60 million by the EIB. The contract with the EBRD was signed in October last year, and its repayment, to last 18 years, starts in 2005. (hina) rml sb