LONDON, Oct 25 (Reuters) - The European Union and Balkan states signed a treaty on Tuesday in Athens extending energy liberalisation to south-east Europe, in a move to encourage greater investment in the region's infrastructure.

The agreement is the first multilateral treaty to cover all countries in south-east Europe, including Albania and the former Yugoslav states.

It aims to bring down energy bills by encouraging increased competition and to attract more investment to a region where blackouts are still common after infrastructure was damaged during the Balkan war in the 1990s.

"The treaty is good news for security of energy supply in the region because it will provide a stable climate for investment in infrastructure," said UK Trade and Industry Secretary Alan Johnson, who signed the treaty on behalf of the European Union.

The World Bank has agreed to provide a billion dollars worth of "fast-track" loans to assist investments throughout the region, which will provide new opportunities for companies in the UK and EU.

Implementation of the treaty will result in the countries of the region becoming part of the EU's internal market in a key economic sector before their accession to the EU.