For the construction of the hot water pipeline from the Nikola Tesla Thermal Power Plant in Obrenovac to the heating plant in New Belgrade, the Serbian government plans to borrow about 165 million euros from China’s Export-Import Bank, and the contractor will also be the Chinese company “Power Construction Corporation of China”, writes Nova Ekonomija.
As foreseen by the Bill on Ratification of the Loan Agreement adopted by the Government of Serbia, which is to be adopted by the Serbian Parliament, the maturity of the loan is 15 years, including a grace period of three years.
The annual interest rate is variable – a six-month Euribor plus a fixed margin of 2.7 percent.
The commission on the non-withdrawn portion of the loan is 0.5 percent annually on unused credit facilities. The share of Chinese services such as Chinese equipment, materials, technology, as well as labor services, management, design, audit, project-led consultations must not be less than 15 percent in the total contract amount, the contract states.
The owner / client of the project is the public utility company Belgrade power plants and the city of Belgrade, to which the Republic of Serbia will at a later stage of the procedure, by a special contract, transfer the approved funds for use and specify the division of rights and obligations between all participants in the project of construction of the hot water pipeline, it is mentioned in he draft of the law.
It is also pointed out that the law on the Serbian budget for 2020 plans to borrow from Chinese banks to finance 85 percent of the value of this project, while the remaining 15 percent will be provided by the Serbian side.
The implementation of the project for construction of the hot water pipeline from the Nikola Tesla thermal power plant in Obrenovac to the heating plant in New Belgrade, was agreed on the basis of the Memorandum of Understanding signed by the Ministry of Mining and Energy, the City of Belgrade, Belgrade Power Plants and Power Construction Corporation of China on June 7, 2017.
