The Serbian government has proposed a law under which it would apply for an export credit from the Russian government for the construction of railway infrastructure worth 172.5 million euro.
The loan will finance 75% of the value of each contract for the delivery of goods and works during the construction of the sections Stara Pazova – Novi Sad and Valjevo – Vrbnica (on the border with Montenegro), as well as the construction of a single rail dispatching centre.
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With this export loan, the Government of the Russian Federation financially encourages the export of goods and services originating in that country. The Serbian side will cover the remaining costs up to 57.5 million euro (25% of the value of the project) from the budget of the Republic of Serbia for the next fiscal years.
Serbia will pay 2% annual interest on export credit, while in case of late payment, the interest of 3% will be charged. Serbia will settle its obligations over five years in 20 equal instalments, with the first instalment to be paid by 30th March, 2026.
Serbia’s budget for 2019 foresees borrowing of up to 610,000,000 euro from the Russian government for railway infrastructure construction projects. In early 2019, companies Infrastruktura Železnice Srbije (Serbian Railways Infrastructure) and RZD International signed contracts stipulating construction of railway infrastructure.
(Nova Ekonomija, 04.11.2019)
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