China Eximbank provides a EUR 300 million loan for First Section of Banja Luka-Prijedor-Novi Grad Motorway Project (Linked to Project ID#66452)

In December 2018, SDHS-CSI BH d.o.o.Banja Luka (SDHS-CSI BH) — a special purpose vehicle and wholly owned subsidiary of China Shandong International Economic and Technical Cooperation Group (CSI) — signed a concession agreement with the Government of the Republic of Srpska for the First Section of the Banja Luka-Prijedor-Novi Grad Motorway Project. Under the terms of this agreement, SDHS-CSI BH is responsible for designing, financing, building, managing and maintaining a 42 km motorway section that runs from Banja Luka to Prijedor. The motorway will have two lanes in both directions, a traffic island, and an emergency lane. According to the project design, the highway section will consist of seven tunnels and 35 bridges, three interchanges and the infrastructure for a closed system of the toll payment as well as the system for traffic safety management and control. This project represents the first highway concession project ever undertaken in the Republic of Srpska. The concession agreement lasts for 33 years, including a 3 year construction period. The EUR 297 million project is being implemented on a public-private partnership (PPP) basis and financed according to an unknown debt-to-equity ratio. During the period in which it operates the motorway, the concessionaire (SDHS-CSI BH) will pay an annual fee of EUR 32.5 million to the Government of the Republic of Srpska. China Eximbank signaled its willingness to finance the project in 2018, and the project was originally expected to reach financial close (FC) during the summer of 2020. However, FC was not achieved according to the original timetable due to unexpected delays. The project’s groundbreaking ceremony ultimately took place on November 6, 2021.

Additional details

1. This project is also known as the 42km Banja Luka-Prijedor Motorway PPP Project. The Chinese project title is 承建的巴尼亚卢卡-普里耶多尔高速公路项目 or 和国巴尼亚卢卡-普里耶多尔-诺维格莱. 德高速公路项目. 2. More research is needed to be undertaken to identify the precise face value of the China Eximbank loan commitment for this project. For the time being, AidData assumes (conservatively) that the EUR 297 million project is being financing according to a debt-to-equity ratio of 70:30, which implies that the face value of the China Eximbank loan is EUR 207.9 million. Meanwhile, "China’s focus means Bosnian economy no longer feeling left behind" published in May 2019 before financial close, suggests that the loan had a face value of EUR 300 million. This issue warrants further investigation. 3. The loan commitment date is another key piece of information that still needs to be identified.

Number of official sources

11

Number of total sources

24