The Serbian government plans to borrow $608.3 million from the Chinese bank for the construction of the Fruska Gora corridor, i.e. the motorway stretch from Novi Sad to Ruma.
The Government has forwarded Serbian MPs the draft law on confirmation of the lending agreement which stipulates funding for the project of construction of the Novi Sad-Ruma motorway (or the Fruska Gora corridor). The agreement was signed by the Serbian Ministry of Finance and Export-Import Bank of China as the lender.
In October 2020, the Trade Agreement on the Design and Construction of the Novi Sad-Ruma Expressway was signed between the Serbian Government, public enterprises Putevi Srbije and Koridori Srbije and China Road and Bridge Corporation. The business agreement stipulates that Serbia will use the loan funds to cover 85% of the project value, while the remaining 15% will be provided by the state budget.
The agreed price for the drafting of technical documentation, execution of works and delivery according to the commercial agreement is USD 715.7 million. The Budget Law from 2020 envisages the country taking out a loan from Chinese banks in the amount of up to $608,385,000.
The Budget Law from 2021 stipulates even higher borrowing for the said project to the amount of USD 610 million. The loan has a maturity of 20 years, including a grace period of 5 years. The principal repayment period will be 15 years in 30 semi-annual instalments due on May 15 and November 15 of each year.
The annual interest rate is set at 3%. Loan processing costs (at a rate of 0.5% of the total amount) will be paid by the Serbian government at once in the amount of $3.04 million, within 30 days of the entry into force of the above agreement.
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