The Overseas Private Investment Corporation (Opic) has provided US$250mn in political risk insurance to support financing for the construction of a motorway in Croatia that will do much to improve the country’s infrastructure, reduce transportation costs, and develop the tourism potential of the Dalmatian coast.

Opic provided the insurance to Private Export Funding Corporation (Pefco) to support its financing to Hrvatske Autoceste (Croatian Motorways) for construction of a portion of the Zagreb-Split Motorway, consisting of a tolled four-lane highway connecting Bregana and Zagreb, and Bosilevo with Sveti Rok.

Construction of the motorway segments Pefco is financing is being undertaken by a branch of Bechtel International, the US international construction and engineering company.

JP Morgan Chase Bank served as financial adviser and arranger of the financing.

The motorway is a key component of the Croatian government’s plan to link Croatia to pan-European transportation corridors. It will provide the only highway connection between the capital, Zagreb, and the central Adriatic coastal area of Dalmatia, including Split, the second largest city in Croatia. Split is currently not connected to Zagreb or the rest of Europe by modern roadways, which causes delays in the transportation of goods and reduces tourism and other commercial activity.

“The Croatian motorway will have a profoundly positive effect on the Croatian economy, increasing the volume, efficiency and safety of commercial activity between the country’s major cities,” Opic president and CEO Peter Watson says. “The project will also enable Croatia to take advantage of its integration into the European Union, by exploiting its great tourism potential, and opening the beauty of the Dalmatian coastline to new generations of visitors. Opic is extremely pleased to support Pefco’s contribution to this vital project.”

Pefco was established in 1970 to mobilise private capital as a supplement to financing already available through US Ex-Im Bank, commercial banks and other lending institutions.