The new financing is favoured by local communities as it takes into account environmental concerns. The proposed new design would maintain the existing two lane single carriageway, but the length of the road would increase to 28 km and the total amount of financing would increase by €21 million. The original financing of €74 million provided to the Public Enterprise for State Roads (PESR), a company responsible for the operation and maintenance of the national and regional roads, was signed in November 2014. It was earmarked for the reconstruction of two road sections between Stip and the eastern town of Kocani and the construction of a road section between the central villages of Raec and Drenovo.
A key element of the investment is the improvement of road safety. In addition to providing better roads the project also includes capacity building, including safety audits.
At the signing ceremony in London, EBRD First Vice President Phil Bennett said:
"We see the need for infrastructure development in the country as one of the key priorities for the EBRD's work in FYR Macedonia. Well-developed and modern transport connections will strengthen regional links and improve the access of remote areas to larger markets. In addition, the improved design of the road extension will result in a significant increase in road safety".
Zoran Stavreski, Deputy Prime Minister, Minister of Finance said: "We are grateful for the EBRD's support in this very important national project. We see it as an economic priority connecting the Macedonian regions via national roads and international connections. This project is beneficial for the people, the country, and sustainable economic development."
The EBRD began investing in the Macedonian economy in 1993. To date, it has signed over 90 projects in the country with a net cumulative business volume of more than €1.5 billion.