Serbia plans to take a 100 million euro loan from the European Bank for Reconstruction and Development (EBRD) for a project to introduce broadband internet in rural areas.
The Government of Serbia sent to the parliamentary procedure the draft law on confirmation of the loan agreement (project for construction of broadband communication infrastructure in rural areas 2) between the Republic of Serbia and the European Bank for Reconstruction and Development.
The purpose of the project is to help Serbia accelerate the development of high-speed broadband networks in white zones (without broadband access) across rural areas, with a focus on schools as access points and priority users of rural broadband networks.
The plan is to provide a connection of at least 100 megabits per second (Mbps) to as many rural settlements as possible. Other public institutions will be used as access points in settlements where there is no school.
The Ministry of Trade, Tourism and Telecommunications estimates that over 90 percent of the access points included in the Project will be rural schools.
The bank will finance the design and construction of broadband infrastructure that will connect 1,200 schools and public institutions in Serbia with the existing broadband infrastructure.
Under what conditions does Serbia borrow?
the deadline for completion of the project is December 31, 2025,
the loan is disbursed in two tranches, both in the amount of up to 50 million euros,
the maturity of the loan is up to 15 years, including the starting period of up to three years after which the payment of the loan principal will begin in 24 equal semi-annual installments,
the first loan repayment date is December 22, 2024, and the last is June 22, 2036,
a variable interest rate equal to the reference interest rate will be applied – six-month EURIBOR, increased by a fixed margin of 1 percent, with the possibility of fixing the interest rate if it is considered a more favorable option from the point of view of public debt management,
the possibility of early repayment, as well as cancellation of the loan, in the minimum amount of one million euros,
the subscription fee at the rate of 1 percent of the total loan (one million euros) is paid once to the bank from the borrowers’ funds and will amount to 500 thousand euros for the first and 500 thousand euros for the second tranche,
the commission rate on the undrawn part of the loan is 0.5 percent per annum.
The agreement also envisions Serbia’s obligation, through the Ministry of Trade, Tourism and Telecommunications (MTTT), to work with consultants and other relevant state and local authorities to develop and implement digital literacy and community information training programs in rural areas.
It is necessary to ensure that at least 4,000 individuals (including 2,000 women) receive basic digital literacy training and that at least 500 people are trained to use e-government in the regions covered by the project.
The project is part of a larger initiative and is a continuation of the Project for the construction of broadband communication infrastructure in rural areas signed on December 30, 2020, which included 600 settlements, Nova Ekonomija reports.
