WASHINGTON/SARAJEVO (Reuters) - The International Monetary Fund said its executive board on Wednesday approved a three-year extended loan arrangement for Bosnia worth about 553.3 million euros ($619.7 million) to support the country’s economic reform agenda.

The decision will enable immediate disbursement of about 79.2 million euros ($88.7 million), the IMF said, with the rest available in 11 installments subject to quarterly reviews.

The extended fund facility deal was initially agreed in May by IMF staff and authorities of Bosnia’s multiple governments in May. The deal carried a 4-1/2-year grace period in exchange for a set of structural reforms and measures to safeguard financial stability.

The program will replace a 33-month, $720 million program which expired in June 2015 after the IMF froze it because of delays to pledged reforms by the government.

Bosnia’s two autonomous regions, the Bosniak-Croat Federation and the Serb Republic, whose total budget deficit amounts to about 1 billion Bosnian marka ($573 million), need IMF cash to secure their financing needs. The regions are linked via a weak central government.

In a surprise move in early July, Bosniak officials declined to sign the letter of intent in what appeared to be an internal spat, prompting the board to delay its consideration of the deal, originally scheduled for mid-July. The officials signed the letter at the end of July.

IMF Deputy Managing Director Tao Zhang, said Bosnia needed to improve its business climate, enhance fiscal policy and safeguard financial sector stability.

“To reach faster growth and create more jobs, greater efforts will be necessary to drive forward the structural reform agenda,” Zhang said in a statement. “The recent adoption of the entity labor laws is welcome, but continued progress is needed to improve private sector incentives for job creation, including by addressing the very high labor tax wedge.”

The IMF said the structural reform program would aim to improve the composition and quality of public spending while gradually lowering public debt.

The measures sought by the IMF are part of a wider program the European Union wants Bosnia to implement to further its bid to join the bloc, particularly on social welfare, pensions and health funding.