AGREEMENTS ON FINANCING CONSTRUCTION OF ISTRIA HIGHWAY SIGNED

ZAGREB, Oct 17 (Hina) - Agreements which were signed in Zagreb on Friday will ensure funds for the first phase of the construction of a highway through the northwestern Croatian peninsula of Istria. Construction work will begin in November and will be completed within a period of 27 months, BINA-Istra d.d., the company in charge of the financing, construction, management and maintenance of the road, said in a statement. BINA-Istra and the Union Bank of Switzerland (UBS) signed at the Sheraton Hotel in Zagreb on Friday agreements on financing the construction of the first phase of the Istrian highway, including a stretch from Pazin via Kanfanar to Vodnjan. The shareholders of BINA-Istra include the French company Bouygues, which owns 50.1 percent of the capital, and the Croatian Roads Administration, Istrian Highway and INA oil company, which hold 49.9 percent of the capital. The statement, signed by Director-General of BINA-Istra d.d. Mr A. de la Chaise, said that the construction of the Phase 1A stretch would enable the use of the highway from Rijeka via Pazin and Kanfanar to Vodnjan, with the total length of about 85 km. The agreements signed today provide for three loans -- a DM 170 million export loan arranged by UBS with the guarantee of the French agency COFACE; a DM 35 million commercial loan provided by Zagrebacka Banka; and a DM 30 million provided by UBS. This was the largest loan agreement to be signed by a privately-owned company in Croatia. The BINA-Istra Supervisory Board has given UBS a mandate to prepare a financial plan for Phase 1B which will enable construction of the entire road. (hina) vm jn 172037 MET oct 97