Serbian Prime Minister Mirko Cvetkovic and his Republika Srpska (RS) counterpart Aleksandar Dzombic said on Friday that relations between Belgrade and Banja Luka are excellent and have never been on a higher level.

After the first joint session of the governments of Serbia and RS in Banja Luka, which was jointly chaired by Cvetkovic and Dzombic, they said that an agreement has been signed on two loans to the total value of EUR 16 million.

The first loan to the value of EUR 14.4 million will be used for the purchase of 200 railway cars for RS and the other, to the value of some EUR 2 million, will be used to purchase computer equipment for schools in RS.

Cvetkovic expressed pleasure with his visit to Banja Luka, pointing out that this shows Serbia's commitment to cooperation in the region.

At a news conference, Cvetkovic pointed out that Belgrade and Banja Luka need maintain their already good relations and added that the agreements signed on Friday would help achieve this goal.

Dzombic said that the joint session of the two governments had historic significance.

The RS prime minister underscored that cooperation between RS and Serbia has never been on a higher level and assessed that the privatisation of Telekom has reinforced RS both in the political and economic sense.

The two prime ministers told the news conference that during their Friday meeting, they also signed Memorandums of understanding between Serbia and RS in the fields of energy, transport, infrastructure, science and technology and a contract on the joint construction of a gym in primary school Srbija in Pale, eastern BiH.