China Eximbank provides EUR 134.4 million loan for State Road of 1B Category No. 27 Loznica-Valjevo-Lazarevac, Section Iverak-Lajkovac (Intersection on the Highway E-763 Belgrade-Pozega) Construction Project

On November 26, 2021, China Eximbank and the Government of the Republic of Serbia signed an EUR 134,300,000 loan agreement [No. BLA20210340034)] for the State Road of 1B Category No. 27 Loznica-Valjevo-Lazarevac, Section Iverak-Lajkovac (Intersection on the Highway E-763 Belgrade-Pozega) Construction Project. The loan carries the following borrowing terms: a 15-year maturity, a 4-year grace period, an interest rate of 6-month EURIBOR plus 2.35% margin, a 2% default (penalty) interest rate, a 0.5% commitment fee, a 0.5% (EUR 671,500) management fee, an 7.1% (EUR 9,584,786.19) Sinosure credit insurance premium. The borrower was expected to use the proceeds of the loan to finance 85% of the cost of a commercial (EPC) contract between China Shandong International Economic and Technical Cooperation Group, Ltd. of Shandong Hi-Speed Group Co. Ltd., the Government of the Republic of Serbia (represented by the Ministry of Construction, Transport and Infrastructure) and the Public Enterprise “Roads of Serbia”, which was signed on June 10, 2020. The lender made disbursements worth $63,982,000 in 2022. The loan’s (principal) amount outstanding was $0 as of December 31, 2021 and $63,982,000 as of September 31, 2022. The purpose of the project is to construct a two-way, four lane State Road that passes through Valjevo (Popucke, Lukavac, Divci, Klanica, Loznica and Veselinovac), and Lajkovac (Slovac, Markova Crkva,Ratkovac and Nepricava). The road has a total expected length of 18.3 km, and the maximum allowed speed of 100 km per hour. There are 20 bridges (including 4 large bridges, and 16 medium and small bridges), with a total length of about 2.5 km (among which, 1.83 km for 4 large bridges, and 0.51 km for 16 medium and small bridges). Construction commenced in June 2020. Serbian President Aleksandar Vucic visited the project site near the town of Klanica on March 23, 2021. The project was originally expected to reach completion by the end of 2022.

Additional details

1. AidData has estimated the all-in interest rate by adding 2.35% to average 6-month EURIBOR in November 2021 (-0.534%). 2. The China Eximbank loan agreement can be accessed in its entirety via https://www.dropbox.com/s/fgiparvkv6wos1i/China%20Eximbank%20loan%20agreement%20for%20Construction%20of%20the%20State%20Road%20of%201B%20Category%20No.%2027%20Loznica-Valjevo-Lazarevac%2C%20Section%20Iverak-Lajkovac%20%28Intersection%20on%20the%20Highway%20E-763%20Belgrade-Pozega%29.pdf?dl=0 3. The Serbian project title is Пројекат изградње државног пута 1.Б реда бр. 27 Лозница – Ваљево – Лазаревац, деоница Иверак – Лајковац (веза са аутопутем Е-763 Београд – Пожега.

Number of official sources

21

Number of total sources

27