Serbia contracted roughly €5.2 billion of new direct state loans in 2025, highlighting both the scale of the government’s investment programme and a gradual change in the structure of sovereign financing. The new borrowing ranged from defence procurement and transport infrastructure to energy, healthcare and public-sector reforms, while commercial banks — including banks operating in Serbia — became increasingly important providers of state finance.
The figures emerge from Serbia’s proposed 2025 final budget account, submitted to parliament on 7 August 2026. The document records new state liabilities authorised through a series of individual borrowing laws during the year.
Of the approximately €5.2 billion in new direct borrowing, around €4.65 billion came from foreign creditors, while another RSD 70 billion, equivalent to close to €600 million, was borrowed from banks operating in the Serbian market. On top of this came approximately €495 million of state-guaranteed borrowing by public enterprises, meaning the volume of newly contracted direct and contingent credit exposure was approaching €5.7 billion.
That figure should not be confused with the annual increase in Serbia’s outstanding public debt. New loans can refinance maturing obligations, be drawn down over several years or coexist with repayments of older debt. Serbia ended 2025 with public debt of around €39.6 billion, while Ministry of Finance data put the public-debt ratio at 44.4% of GDP for the year.
The composition of the borrowing is therefore more revealing than the headline number alone.
The largest single financing package was associated with Serbia’s procurement of Rafale fighter aircraft from France. A consortium of French banks provided approximately €1.92 billion, making the defence transaction by far the largest individual loan included among the new foreign obligations recorded for 2025.
The scale matters. The Rafale financing alone represented more than one-third of the foreign loans added to the list, showing how defence procurement has become a material component of sovereign financing alongside the traditional infrastructure and development sectors.
The second-largest item was approximately €1.13 billion connected with the European Union’s Reform and Growth Facility for the Western Balkans. Although the underlying agreement was concluded earlier, it entered Serbia’s 2025 borrowing framework following ratification.
This financing is structurally different from conventional project debt. Rather than funding a single motorway, railway or power plant, it is tied to a broader programme of reforms and economic convergence with the EU. The appearance of such a large policy-based facility alongside defence and infrastructure loans illustrates how Serbia’s sovereign financing portfolio is becoming increasingly diversified.
International financial institutions remain important creditors, particularly in areas where borrowing is linked to institutional reform and social infrastructure.
Serbia contracted four loans worth a combined approximately €272 million from the International Bank for Reconstruction and Development, part of the World Bank Group. The financing covered programmes including tax administration reform, innovative entrepreneurship and measures aimed at strengthening inclusiveness in Serbia’s education system.
The European Investment Bank accounted for another approximately €357 million of new financing. Projects included investment in clinical centres, the Niš–Dimitrovgrad railway and green-financing programmes.
Other lenders included the European Bank for Reconstruction and Development, Germany’s KfW Development Bank and the French Development Agency — AFD. In several cases, the financing was directed less towards a single physical asset and more towards reform programmes, sector modernisation and policy implementation.
This distinction is becoming increasingly important for Serbia’s debt profile. Traditional sovereign borrowing was historically dominated by identifiable capital projects or general budget financing. Development institutions increasingly attach financing to energy transition, governance, environmental standards, public administration and structural reforms. The state is therefore borrowing not only to build assets but also to finance institutional transformation.
Transport remains one of the largest destinations for conventional project debt.
A further €260 million was contracted for the Morava Corridor, representing the fourth major credit package used to finance the motorway project. The latest facility was provided by a banking consortium led by JPMorgan.
At the same time, Serbia substantially expanded its use of domestic commercial banks to finance road construction.
Four loans classified as domestic borrowing totalled RSD 70 billion. Banca Intesa provided RSD 12 billion for the Ruma–Šabac–Loznica road corridor, while UniCredit Bank Serbia provided another RSD 8 billion for the same route.
OTP Banka Srbija provided RSD 15 billion for construction of the Požarevac–Golubac section of the Danube Corridor, while NLB Komercijalna banka extended the largest of the domestic facilities, RSD 35 billion, for the planned Belgrade–Zrenjanin–Novi Sad motorway.
Although denominated in dinars, the loans contain currency clauses, meaning that their economic exposure differs from conventional fixed dinar sovereign borrowing.
The broader trend is significant: commercial banks are becoming substantially more important creditors to the Serbian state.
According to public-debt data cited in the 2025 reporting, Serbia’s liabilities towards commercial banks have increased from roughly €700 million five years earlier to around €5.3 billion by June 2026. Commercial banks, which ranked around tenth among Serbia’s creditor categories in mid-2022, had moved to third place by mid-2026, behind holders of international bonds and long-term dinar securities.
This represents more than a change in lender rankings.
Direct bank loans allow the government to finance individual projects without relying exclusively on public bond issuance. They can provide greater flexibility over maturities, drawdowns and project-specific financing structures. For banks, meanwhile, sovereign lending provides large-volume exposure to a borrower with comparatively low credit risk.
But increasing reliance on bank financing also deserves attention from a fiscal-risk perspective. It can make the full structure of sovereign borrowing less immediately visible than benchmark bond issuance, where pricing, yields and investor demand are continuously observed by financial markets.
It also creates stronger links between the sovereign and domestic banking system. Serbia’s banks are well capitalised and liquid, but the rapid increase in direct lending to the state means sovereign exposure is becoming more relevant when analysing banking-sector asset allocation and concentration.
The 2025 accounts also show another layer of fiscal exposure: state guarantees issued for borrowing by public enterprises.
Approximately €495 million of newly guaranteed borrowing was recorded during the year. Around €241 million related to loans from foreign creditors, while approximately €253 million was provided by domestic banks.
The largest beneficiaries were energy companies Elektroprivreda Srbije — EPS and Srbijagas, alongside transport and electricity-grid companies.
EPS obtained a €67 million EBRD loan for revitalisation of the Vlasina hydropower plants, while another €30 million from KfW supported the Kostolac wind farm. Both facilities carried state guarantees.
Transmission-system operator Elektromreža Srbije — EMS borrowed approximately €12 million from AFD with a sovereign guarantee.
Rail operator Srbija Voz added two guaranteed facilities: around €90 million from a European rail-vehicle financing institution and another €42 million from the EBRD.
The guarantees illustrate the extent to which Serbia’s investment programme extends beyond the central budget. Major infrastructure programmes are frequently implemented through state-owned companies, but their financing can ultimately remain linked to the sovereign balance sheet.
That is particularly visible in the gas sector.
Srbijagas relied heavily on domestic banking finance for expansion and rehabilitation of the gas network. Banca Intesa provided around €30 million for the Belgrade–Valjevo–Loznica gas pipeline and another €45 million for the Leskovac–Vranje pipeline.
For the Leskovac–Vranje project, Banka Poštanska štedionica provided another €15 million.
Similar financing structures were used for infrastructure around Horgoš, while Poštanska štedionica also extended approximately €51 million for rehabilitation of gas transmission systems.
EPS additionally contracted approximately €52.5 million from Banca Intesa, OTP Banka Srbija and Banka Poštanska štedionica, backed by the state.
These guarantees are contingent rather than immediate budget liabilities: the government becomes responsible for repayment if the underlying borrower cannot service the debt. Nevertheless, they are an important part of Serbia’s broader sovereign-risk picture, particularly where state enterprises operate in capital-intensive sectors with large investment requirements.
The structure of the 2025 borrowing also demonstrates how closely Serbia’s fiscal strategy is connected with its infrastructure cycle.
Roads, railways, electricity generation, transmission infrastructure, gas networks, healthcare and defence all require unusually large amounts of capital. Serbia has simultaneously pursued motorway construction, railway modernisation, energy-sector investment and large public projects while maintaining broader economic and institutional reform programmes.
As long as economic growth remains stronger than the growth of debt, the debt-to-GDP ratio can remain contained even while gross borrowing volumes are high. Serbia’s 44.4% public-debt-to-GDP ratio at the end of 2025 remained well below the levels seen a decade earlier, when the ratio exceeded 65%.
The more important issue for the coming years may therefore be the quality and structure of borrowing rather than the absolute amount alone.
Loans that finance economically productive infrastructure can increase connectivity, energy security and productive capacity. Development-bank financing can support reforms that would otherwise be difficult to fund through annual budgets. But borrowing for projects with weak economic returns, repeated cost increases or limited transparency can create liabilities without generating equivalent future revenue or productivity gains.
The rapid rise of commercial-bank financing adds another dimension. Serbia is no longer dependent primarily on Eurobonds, bilateral creditors and international financial institutions. Domestic and internationally owned banks operating in Serbia are becoming an increasingly important part of the sovereign funding architecture.
That gives the government greater financing flexibility but also means investors, banks and fiscal analysts will increasingly need to look beyond Serbia’s headline public-debt ratio.
The key indicators will include the maturity profile of the new loans, interest costs, currency exposure, the speed at which project loans are drawn, the performance of state-owned borrowers and the volume of guarantees that could migrate onto the central government balance sheet.
The €5.2 billion contracted in 2025 therefore tells a broader story. Serbia is financing one of the region’s largest public investment programmes through an increasingly complex mix of international development institutions, foreign commercial banks, domestic banks, EU financing mechanisms and sovereign guarantees.
The country’s debt ratio remains comparatively moderate, but the creditor map is changing rapidly. Commercial banks are moving closer to the centre of sovereign financing, while infrastructure, defence and energy are absorbing increasingly large volumes of capital.
For Serbia’s public finances, the next phase will be determined not simply by how much the state can borrow, but by whether the assets and reforms financed with that debt generate sufficient economic value to justify an increasingly large and diversified financing programme.
