New Roads Boost Jobs, Connectivity, and Growth in Bosnia and Herzegovina

Story Highlights

• A World Bank-supported road project in Bosnia and Herzegovina is demonstrating how infrastructure upgrades can strengthen connectivity, support local economies, and improve daily life for remote communities.
• The new road connecting Neum's coastal region with the inland town of Stolac is revitalizing these areas’ economies by incentivizing investment, creating jobs in tourism, and boosting local agriculture.
• Upgraded tunnels and bypasses are improving safety on major transport routes once prone to landslides and long delays.

For remote communities across Bosnia and Herzegovina (BiH), investing in roads is an economic gamechanger. With support from the World Bank, new construction and rehabilitation projects are improving linkages along the Adriatic coast and connecting once-isolated villages and towns with major trade corridors—helping drive investment that is supporting tourism, local businesses, and access to jobs. These efforts are also improving road safety and helping protect key transport routes from landslides and other natural disasters, strengthening the resilience of BiH’s transportation network—a boon for the region’s economy, the country’s, and for BiH towns like Neum and Stolac.

A Coast-to-Inland Lifeline: The Impact of the Neum–Stolac Road

The new 36-kilometer Neum–Stolac road is making a tangible difference for both ends of this mountainous route. In Neum, BiH’s only coastal municipality, better inland access is helping extend the tourist season and improve supply chains. In Stolac, an inland town with strong agricultural potential and growing tourism appeal, easier access to the coast is drawing more visitors and creating new opportunities for local businesses.

Before this new road was built, most travelers avoided the narrow mountain pass between Neum and Stolac, instead driving through neighboring Croatia to reach the coast. This detour involved multiple border crossings, resulting in delays and higher costs—discouraging investment and limiting economic opportunities in inland communities.

“I had been to Stolac maybe five times in my life, it used to take an hour and a half to get there. Now, we’re there in just 25 minutes," said Tomislav Lovrić, the owner of two hotels in Neum. "This road opens up a million possibilities."

In Neum, restaurants and hotels are welcoming more visitors earlier in the year, and many are now able to stay open well beyond the traditional summer season. Easier inland access is also improving supply chains and creating new opportunities for local entrepreneurs.

“We have more visitors than before,” Lovric added. “About 500 people arrive on the first warm day of the year. Our restaurants are open nearly year-round.” That translates into more stable income generation, more permanent jobs, and greater demand for investment.

In Stolac, the new road’s impact is also visible. Dženita Pirija, who runs a restaurant in Stolac, says that the number of both domestic and foreign visitors has grown. Many stop for lunch and a stroll along the town’s historic cobbled streets, while others choose to stay longer and explore the area.

"Thanks to this road, Stolac has become much more accessible, and interest in visiting Stolac is growing, which benefits our local economy," Pirija said. “This season alone, the rise in guests led us to hire more staff to meet growing demand.”

Stolac’s economic revitalization is also being driven by the construction of a new bypass, designed to divert traffic away from the town center. The 1.3-kilometer route, which includes a two-lane alignment, three roundabouts, and a bridge over the Bregava River, has eased congestion and improved road safety.

“This [bypass] road has been a blessing,” said Halid Geri, a local farmer. “Stolac is coming back to life: restaurants are opening, homes are being renovated, and small producers like me now have a chance to sell more.”

Improving Road Safety and Resilience

The Neum–Stolac road and the Stolac bypass are part of the wider Federation Road Sector Modernization Project (FRSMP), which delivered 28 small and medium-sized transit upgrades across the country, including roads, tunnels, bridges, and critical “black spots,” which are sections of road known for high accident rates. Supported by the World Bank and the European Investment Bank, the $101.3 million project has helped address key transport challenges in the country’s south.

These investments became possible after the BiH authorities agreed in 2016 on a framework national transport strategy, which was a critical step toward more coordinated and sustainable infrastructure planning. While the strategy’s implementation has faced delays, in part due to administrative fragmentation, recent progress has helped improve safety, reliability, and connectivity across major transport corridors.

FRSMP also rehabilitated the Crnaja tunnel, a once-dangerous bottleneck on the Sarajevo–Mostar corridor. Located on the Pan-European Corridor Vc—a key north–south trade route linking the Adriatic coast with Sarajevo and Hungary—the site had long posed safety risks due to landslides and limited detour options. Once considered one of the most dangerous road segments in the country, the Crnaja tunnel was narrow, frequently flooded, and in poor condition. Today, the renovated 550-meter Crnaja Tunnel, with its new structural repairs, waterproofing, improved drainage, new lighting, and pavement upgrades, provides a safer and smoother journey on one of BiH’s busiest transit routes.

As Ljubo Pravdić, director of the public company Roads of the Federation of BiH, stressed: “[This project] is a major step for our economy, for tourism, and for all road users. It brings the coast closer to everyone and eliminates long border waits, making our transport routes faster and more competitive.”

FRSMP's Impact at a Glance

• 28 road upgrades, including tunnels and bridges
• 76.9 km of roads improved, including new slow lanes, safer intersections, and black spot fixes
• 35 km of the Neum-Stolac road upgraded, reducing travel time by over 40%
• Rehabilitation of the Crnaja tunnel, improving safety along Corridor Vc
• 1.3-km Stolac bypass built to reduce congestion and preserve the historic town center