Serbia, Loans from the French Development Agency and the IBRD of a total of 265.2 million euros before the deputies

Published on 25. February 2023., News

During the current session, the members of the Serbian Parliament will decide on the confirmation of the loan in the maximum amount of 176.8 million euros, which was approved by the French Development Agency for Serbia, as well as the loan worth 88.4 million euros from the International Bank for Reconstruction and Development.

As stated in the Bill on Confirmation of the Loan Agreement with the French Development Agency (AFD), Serbia intends to implement the Project of Local Infrastructure Development and Institutional Strengthening of Local Self-Governments with a total value of 265.2 million euros.

That is why, in the contract signed on December 5, 2022, AFD made available part of the money for financing the project, in the amount of a maximum of 176.8 million euros.

The loan was approved with the option of choosing between fixed or variable interest for each tranche that Serbia withdraws, with a fixed reference rate of 3.55 percent per year, as well as with a maturity of 12 years with a grace period of six years.

The co-financier of the Local Infrastructure Development Project is the IBRD, with which the Loan Agreement in the amount of EUR 88.4 million was concluded.

In the explanation of the loan agreement with the IBRD, the Government of Serbia stated that the maturity of the loan is 12 years, with a grace period of three years and an interest rate in the amount of six-month EURIBOR with a variable margin of 0.63 percent.

The deadline for the completion of the Project of Local Infrastructure Development and Institutional Strengthening of Local Self-Governments, for which this loan arrangement with AFD and IBRD was made, is November 30, 2028.

The Project itself has three components – “Climate Smart Mobility”, which focuses on the improvement of transport and supporting infrastructure, then “Strengthening the capacity to provide transport services”, as well as the “Project Management and Awareness Raising” component.

249.28 million euros are planned for the financing of “Climate Smart Mobility”, 10.17 million euros for the capacity building component and 5.75 million euros for project management.

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