In connection with the news that the Saudi Arabian Development Fund has shown interest in financing three projects in Serbia worth about 200 million dollars, we checked how far our country has come with the use of credit arrangements with development funds and governments of Arab countries.
This year’s budget includes two loans from the Fund for the Development of Abu Dhabi (United Arab Emirates), as well as a loan from the Kuwait Fund for Arab Economic Development, and we are repaying loans from the Government of the Emirate of Abu Dhabi and rescheduled obligations to the Kuwait Investment Authority fund.
The older of the two Abu Dhabi Development Fund loans was approved back in 2014, for the first phase of the development of the irrigation system. Its total value is 356.28 million dirhams or about 100 million dollars, and we are repaying it from March 1st, 2019, until 2033. The current balance of debt under that loan amounts to 29.9 million euros.
Starting in 2021, Serbia will repay the USD 1 billion loan that was approved in 2016 to support the budget to the Abu Dhabi Development Fund. The balance of the debt under that loan is 713 million euros, and this year’s installment amounts to 178.3 million euros.
At the end of last year, that fund granted Serbia a new budget support loan in the amount of one billion dollars.
“The goal of the Project (budget support) is to strengthen the country’s economy through supporting the budget deficit, ensuring current liquidity, refinancing due obligations based on the public debt of the Republic of Serbia and providing assistance to the state in achieving the planned development,” the loan agreement, which was signed in September 2022, states. , and confirmed two months later in the Parliament of Serbia.
It is interesting that it was agreed that the loan will be paid all at once, so that the first and last installments are due on August 14th of the following year.
When it comes to Kuwait’s loans, the debt balance for rescheduled obligations is 186 million euros, while the principal installment for this year is 15.5 million euros.
Let us remind you that this is a debt for which a swap transaction was realized in February 2021. In this way, as the Public Debt Administration announced at the time, the obligation based on the Debt Reprogramming Agreement between Serbia and the Kuwait Investment Authority, the largest investment fund in Kuwait, was converted from US dollars to euros.
“Obligations based on the aforementioned reprogrammed loan, contracted in dollars at an interest rate of 1.5 percent, Serbia will pay in euros at an interest rate of 0.393 percent, which will save about two billion dinars,” it was pointed out at the time.
The oldest among the loans that we are still repaying is the loan from the Kuwait Fund for Arab Economic Development, which in 2012 approved a loan worth 25 million euros for the construction of the Belgrade railway station “Prokop”, i.e. “Belgrade – Center”.
Repayment of the principal on that loan began in 2018, and the debt balance currently amounts to EUR 20.5 million. The last installment is due on August 1st, 2031, and this year we need to pay 714,000 Kuwaiti dinars or about 2.1 million euros in the name of the principal.
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