China Eximbank and Bank of China provide EUR 128 million syndicated loan to Telekom Srbija for Fixed Network Modernization and Upgrading Project

On June 18, 2016, China Eximbank (CEXIM) and the Government of the Republic of Serbia’s Ministry of Finance signed a Memorandum of Understanding (MOU) regarding a Fixed Network Modernization and Upgrading Project. During the same month, Telekom Srbija (Telekom Srbija a.d. Beograd) — a Serbian state-owned telecommunications company headquartered in Belgrade — signed a framework agreement with Huawei as the contractor of the project. Then, on May 12, 2017, CEXIM and Bank of China (BoC) signed an EUR 128 million EUR syndicated loan agreement with Telekom Srbija for the Fixed Network Modernization and Upgrading Project. The loan carries a 10 year maturity. Its interest rate and grace period are unknown. The proceeds of the loan were used by the borrower to partially finance a commercial contract with Huawei worth approximately EUR 150 million. The expected duration of the commercial contract is three and a half years from the date of signature of the first purchase order or financing contract, whichever is more recent. The purpose of this project is to increase fast, stable and secure internet access through the laying of fiber optic cable. The project officially commenced on October 5, 2016. By 2019, the project had resulted in the laying of 4,000 km of fiber optic cable and it was on track to provide fast, stable and secure internet access to more than 700,000 households by the end of 2019. As of October 2020, this project was still undergoing implementation.

Additional details

1. This project is also known as the Telekom Srbija Fixed Network All-IP Modernization Project. The Serbian project title is Projekat All-IP transformacije. The Chinese project title is 固网现代化升级改造项目. 2. The loan that supported this project is not included in the Overseas Development Finance Dataset published by Boston University’s Global Development Policy Center in December 2020. 3. Telekom Srbija is Serbia's biggest fixed network operator with 70 percent of fixed network users.

Number of official sources

16

Number of total sources

23