Lithuanian Transportation Minister Rimantas Didziokas said the reconstruction project, which will cost an estimated $56.9 million, would open up new possibilities in the port and enhance its competitiveness in the Baltic Sea region.
"This is good news for business partners and investors who have large-scale plans, as well as for the people (of Lithuania)," the minister said.
The World Bank also lauded the project.
"The project is very important for the World Bank because it helps (Lithuania) to integrate into Europe. The project is important in terms of environmental protection too," said Christopher Hall, the World Bank loan portfolio manager, after the agreement was signed at the Transportation Ministry.
Lithuania wants to launch the project by the end of this year, with a view to completing it by March 31, 2004.
The World Bank loan, backed with a state guarantee, is repayable in 17 years, including an initial five-year grace period, and carries an annual interest rate of six to seven percent. The loan will have to be repaid by the Klaipeda Seaport Authority.
The authority will invest $21.6 million in the project, aimed at extending the port's north and south breakwaters, as well as deepening and widening the port's entrance channel to allow larger ships to enter. Didziokas said the project would boost the reloading capacity at the port by some 50 percent.
The project also includes the establishment of a port discharge service and environmental mitigation measures.