China Eximbank provides RMB 1.436 billion government concessional loan for Belgrade Bypass Project (Section B — Lots 4, 5, and 6)

On September 18, 2018, the Chinese Government and the Government of the Republic of Serbia signed a preferential loan framework agreement for the Belgrade Bypass Project (Section B — Lots 4, 5, and 6). On the same day, China Eximbank and the Government of the Republic of Serbia signed an RMB 1,436,850,000 government concessional loan (GCL) agreement [CHINA EXIMBANK GCL NO. (2018) 27 TOTAL NO. (669)] for the Belgrade Bypass Project (Section B — Lots 4, 5, and 6). The loan (GCL) carries the following borrowing terms: a 2.5% interest rate, a 0% default (penalty) interest rate, a 20-year maturity, a 5-year grace period, a 0.25% commitment fee, and a 0.25% (RMB 3,592,125) management fee. The proceeds of the loan (GCL) were to be used by the borrower to finance the cost of an EUR 227,729,321 (RMB 1,690,411,973) commercial (EPC) contract between the Government of the Republic of Serbia, Public Enterprise “Roads of Serbia”, and Power Construction Corporation of China, Ltd. (PowerChina), which was signed on November 5, 2016 (ID#401-00-01051/2016-01) and amended on September 21, 2017 (ID#401-00-01051/2016-01). The lender made disbursements worth $39,204,000 in 2019, $65,235,000 in 2020, and $73,161,000 in 2021. The loan’s (principal) amount outstanding was $39,204,000 as of December 31, 2019, $104,439,000 as of December 31, 2020, $177,600,000 as of December 31, 2021, and $182,574,000 as of September 31, 2022. The purpose of the project is to construct a 22.6 km stretch of highway on Section B of the Belgrade Bypass. The stretch runs from Otruznica bridge to Junction Bubanj Potok. 13.1 km of the stretch is a semi-profile highway (three lanes) and 9.5 km is a full-profile highway (six lanes). The Belgrade Bypass will be a closed highway with a design speed of 120 km per hour. Upon completion, it is expected to greatly ease existing traffic pressures in Belgrade. Power Construction Corporation of China, Ltd. is the general (EPC) contractor responsible for implementation. Azvirt — an Azeri civil engineering company — is also involved in implementation as a subcontractor. The ceremonial start of project implementation took place on July 24, 2018. As of June 2020, Power Construction Corporation of China, Ltd. had completed the breakthrough of the left tube of the Strazevica tunnel that lies on the 22.6 km-long Ostruznica-Bubanj Potok section of the Belgrade Bypass Road. Power Construction Corporation of China, Ltd. also announced in June 2020 that the section from Ostruznica to Bubanj Potok would be finished in 2022. In May 2021, Lot 4 (Section 4) of Section B was completed and opened for operation. Aleksandar Vucic, President of Serbia and Chen Bo, Chinese Ambassador to Serbia attended the opening ceremony. Lot 5 (Section 5) of Section B was completed and opened for operation on June 15, 2022. Construction of Lot 6 (Section 6) of Section B was ongoing as of 2022. The successful opening of Lot 4 (Section 4) with Lot 5 (Section 5) and Lot 6 (Section 6) will eventually form a complete highway network around the capital city of Belgrade. An opening ceremony was held for the completion for the project on April 29, 2021.

Additional details

1. This project is also known as the Belgrade Bypass Project – Construction of Highway E70/E75, Section: Bridge Over Sava River Near Ostruznica – Bubanj Potok (Sectors 4, 5 and 6). The Serbian project title is Пројекат изградње обилазнице око Београда на аутопуту Е70/Е75, деоница: мост преко реке Саве код Остружнице - Бубањ Поток (Сектори 4, 5 и 6). The Chinese project title is 贝尔格莱德绕城公路项目. 2. This RMB 1,436,850,000 China Eximbank loan is not recorded the China’s Overseas Development Finance Dataset, which Boston University's Global Development Policy Center published in December 2020. 3. The China Eximbank GCL (loan) agreement [CHINA EXIMBANK GCL NO. (2018) 27 TOTAL NO. (669)] can be accessed in its entirety via https://www.dropbox.com/s/tdy56cyqdx94z2i/China%20Eximbank%20loan%20for%20Belgrade%20Bypass%20Project.docx?dl=0. 4. In April 2020, the Government Serbia signed a memorandum of understanding with Power Construction Corporation of China, Ltd. and Azvirt for the construction of the Bubanj Potok-Pancevo stretch of Belgrade bypass road, known as Sector C.

Number of official sources

34

Number of total sources

52