The funds would "support government efforts to improve water supply and water collection and treatment services, as well as flood protection measures," the bank said in a statement.

It said the project would help provide safe drinking water as well as collect and treat waste water in the country's Sava, Drava and Danube river basins.

"The government and the World Bank will coordinate the activities of the Inland Waters Project with the European Union, which will help Croatia in harmonising environmental protection directives," said Croatian Agriculture Minister Petar Cobankovic.

Croatia opened membership talks with the EU in 2005 and is hoping to become the bloc's 28th member by the end of the decade.

Since 1993, the World Bank has given Croatia 34 loans worth 1.64 billion euros and approved 48 grants with a total value of 39 million euros.

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