The CEB supports regional development in the Slovak Republic

Despite being one of Europe’s most dynamic economies, the Slovak Republic is characterised by important regional differences in terms of income, unemployment and infrastructure, with central and eastern parts of the country lagging behind the rest. In particular, inadequate transport infrastructure hampers investment and economic growth in these regions.  

Admittedly, Slovak regions have greatly benefited from European Union funds. Over the 2007-2013 programming period, the authorities received € 11.6 billion in funding from Structural and Cohesion Funds, with three-quarters of money spent at the regional level. However, regions and municipalities cannot rely solely on EU financing when carrying out public investments, as those funds are often limited to specific policy goals.

Financing at regional level

With its four distinct financial instruments, the CEB is an attractive partner for regions looking to diversify sources of funding for their public investments. In 2015, the self-governing regions of Žilina and Trnava approached the CEB in order to request a Programme Loan, combining long-term and short-term funding.

That same year, the CEB approved a € 49.5 million loan to Žilina and a € 15 million loan to Trnava. The CEB funds are expected to co-finance investments in revitalisation and modernisation of urban public infrastructure, environmental protection, healthcare and the rehabilitation of historic and cultural heritage.

The two loans represent the CEB’s first operations with the self-governing regions of the Slovak Republic and are also the first loans granted to these regions by an international financial institution (IFI).

What the CEB funds will pay for

Both regions will be making considerable investments in transport infrastructure. Repair and maintenance of local roads, bridges and facilities have long been neglected. Moreover, the transport network, built mostly in the 1950s and 1960s, was not designed for the current volume of traffic; at the same time, there has been a significant shift in the use of public transport, with more and more passengers opting for the car.  

Reconstruction of roads and bridges, road surface repairs, rockslide protection, and the purchase of maintenance equipment are therefore among the public investments to be undertaken by Žilina and Trnava and co-financed by the CEB.

Other planned investments include the reconstruction of sanitary facilities in hospitals and healthcare centres, purchase of medical equipment and ambulances, renovation of facilities for the elderly and disabled and rehabilitation of museums and public libraries.

The CEB is to provide long-term financing to cover local contributions by the regions as well as short-term bridge financing to accelerate and facilitate the absorption of EU funds.

In 2016 the CEB also approved € 13 million loan to the self-governing region of Trenčín.