Serbia is taking a loan from a Chinese bank to build a road

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Serbia plans to take a 134.3 million euros loan from China’s Export-Import (EXIM) bank to build the Iverak-Lajkovac section. The Government of Serbia sent to the parliamentary procedure the proposal of the Law on Confirmation of the Loan Agreement (Loan for Contracting a Foreign Construction Project) for the project of construction of the state road Lozica-Valjevo-Lazarevac, section Iverak-Lajkovac.
The agreement, signed on November 26, was concluded between the Chinese Export-Import Bank and the Government of Serbia (through the Ministry of Finance).
During the duration of the loan agreement, the Government will undertake that the Commercial Agreement will not be terminated, except due to the full execution of the Commercial Agreement, the bill says.
The contract cannot be canceled or annulled without the submission of a written request and the prior written consent of the lender.
The commercial contract must not have significant changes or additions, excluding technical issues and deadlines that cannot significantly affect commercial conditions.
The draft law states that the interest rate applicable to the Loan or its corresponding part for each interest period will be a variable annual rate determined by the Lender as the sum of the valid EURIBOR increased by the margin.
It also states that any applicable variable rate will not change during the interest period, starting from the date on which such variable rate is determined.
Serbia also undertakes to pay a commission on undrawn funds at the rate of 0.5 percent per year on the daily unused part of the loan, as well as a fee for loan processing of 0.5 percent of the loan, in the amount of 671,500 euros.
The 18.3 kilometer-long Iverak-Lajkovac expressway with two lanes in each direction will connect Valjevo with the Milos Veliki highway, as well as parts of Bosnia and Herzegovina with the Milos Veliki highway and Corridor 10.
Representatives of the Chinese company China Shandog, which is the contractor, said at the end of March that the section would be completed by December 2022, BiF reports.