Sarajevo has historically been a town of mixed cultures. It is a cultural, economic, and educational centre, and, as the capital city of Bosnia and Herzegovina, Sarajevo should encourage diversity. It has, therefore, become important to repatriate its pre-war citizens, reconstruct its institutions, economy, and homes, and encourage its cultural ambitions.

The EC allocated 35 MEURO in 1996 through a specific "Europe for Sarajevo" programme in two tranches of 15.5 MEURO and 19.5 MEURO. The programme’s main objectives are to restart the local economy, re-conciliate ethnic groups, create jobs for disadvantaged groups, and work to the benefit of the local population. The programme was sub-divided into the following main areas of support: housing rehabilitation, school rehabilitation, water supply rehabilitation, airport infrastructure rehabilitation, support to public health, and the preservation of civil and cultural landmarks.

7.6 MEURO was allocated to the rehabilitation of housing. Rehabilitation centered on the housing around the airport, which were badly damaged during the war, with the repair of unoccupied and occupied apartments to enable the return of refugees and displaced persons. The programme involved the rehabilitation of over 1,000 apartments in the Dobrinja and Mojmilo estates near Sarajevo airport.

Approximately 9 MEURO was channeled into the rehabilitation of the education sector. Work included rebuilding the Secondary Technical School and Sarajevo University buildings, and also provided financial assistance toward the university programme in anticipation of the growing number of students. Of this amount 1.2 MEURO of funding went towards the repair of primary schools in the areas of Ilidza, Butmir, and Hrasnica in coordination with the rehabilitation of homes in that area, and a further 1.3 MEURO was allocated to a vocational training programme for demobilised soldiers.

1.2 MEURO went to waste related projects for the cleaning of the city, including the riverbanks, waste dumps, rubble from the war, and litter.

3.6 MEURO was committed to cultural and civil building renovation. Funding was provided for the preservation of the Vijecnica National Library, the rehabilitation of Kosevo Olympic Stadium, and the rehabilitation of heating, water, and electricity systems within the Lukavica Presidency Building.

The rehabilitation of the water sector focused on the rehabilitation of the water supply network and water sources that were damaged during the war and accounts for over 70% of Sarajevo’s water supply. 7.4 MEURO was committed to this large project. Work carried out included mine clearance, repair of damaged structures, reconstruction to increase supply, leak detection and repairs, and rehabilitation of equipment required for the purification process.

The rehabilitation of Sarajevo airport terminal building received an allocation of 3 MEURO. The aim is to improve the airport infrastructure in order to enable increased movement of people and cargo through the reconstruction of the terminal building and the provision of necessary equipment.