COUNCIL OF EUROPE FUND GRANTS LOANS FOR RENOVATION OF E. CROATIA

( Editorial: --> 4332 ) ZAGREB, Apr 3 (Hina) - The Council of Europe's Fund for Social Development accepted two projects on the reconstruction of Eastern Slavonia at a March 27 meeting in Paris. The projects were proposed by the Croatian government, whose representatives attended the meeting. The Fund granted a loan worth US$26.6 million for financing the reconstruction of hospitals and one worth US$10.4 million for the reconstruction of schools. According to a statement the Croatian Ministry of Finance issued Thursday, the loans will be available for use once implementation agreements are signed between the Fund and the Croatian government and ratified by the Croatian National Parliament in May. Loan servicing is 15 years with a five year grace period and an interest rate that will in relation to the market rate be subsidised by the Fund with an annual 0.50 per cent during the servicing. The Fund finances up to 50 per cent of a project, while the rest comes from the state budget. The project on the reconstruction of hospitals, worth more than US$56.7 million, will be carried out by the Ministry of Health, and will cover the reconstruction and equipping of 19 hospitals in Vukovar-Srijem and Osijek-Baranja Counties in eastern Croatia. The Ministry of Reconstruction and Development will carry out the project on the reconstruction of schools, worth US$20.8 million and covering the reconstruction of 34 schools in the above mentioned counties. According to the Finance Ministry statement, both projects are of great social and political value. They have been well received and endorsed by the highest Council of Europe bodies and the Fund for Social Development. This is a great political and financial support to Croatia and provides necessary preconditions for the return of refugees and an accelerated reintegration of eastern Croatia. The loans granted by the Fund are the first projects proposed by the Croatian government. Croatia needs and is interested in cooperation with the Fund to be even more successful in future projects and loans, the Finance Ministry statement said. (hina) ha 031211 MET apr 98