Serbia incurs debt of EUR 113.1 million – Two loan agreements signed with World Bank

Minister of Finance Dusan Vujovic and Tony Verheijen, the World Bank Country Manager for Serbia, signed agreements on two loans on Friday, May 12, in Belgrade. The loans pertain to the project of inclusive pre-school education and development policies in the field of managing risks of natural disasters with an option of delayed withdrawal of funds. The total amount equals EUR 113.1 million.

As said for Tanjug by the Ministry of Finance, the signing of the agreement on the loan for the project of inclusive pre-school education means that the International Bank for Reconstruction and Development will approve a loan of of EUR 47 million to achieve development goals pertaining to the enhancement of accessibility, quality and equality in services of pre-school education, especially for children from socially vulnerable environments.

The maturity date is 21 years, including the grace period of up to five years, an interest rate equal to the reference rate, i.e. six-month EURIBOR augmented by a variable margin, as well as the access fee of 0.25% and the annual fee for undrawn amounts of 0.25%.

The funds are available until December 30, 2022.

The project, as the ministry explains, consists of four components – expansion of the offer of free places in pre-school institutions, strengthening of the quality of pre-school services, support to children and families and project management, technical help and monitoring.

The Ministry of Finance said for Tanjug that the loan for development policies in the field of managing risks of natural disasters, with an option of delayed withdrawal of funds, amounted to EUR 66.1 million and took the form of a stand-by arrangement for urgent actions in extraordinary situations in order to respond to the negative impact of natural disasters, especially those growing more prominent due to climate changes.

The maturity date is 20 years, including a grace period of 10 years, an interest rate equal to the reference rate, augmented by a variable margin, an access fee of 0.50% and without the fee for undrawn amounts.

As the ministry specified, the final deadline for drawing down funds from this loan is October 31, 2020, with potential four consecutive extensions, making the funds available for 15 years.

– The said loan will provide support to the Government of Serbia in strengthening the legal and institutional framework for the reconstruction following natural disasters and managing risks of natural disasters and climate risks, strengthening technical capacities for planning and implementing activities of managing risks of natural disasters and reducing fiscal impacts, as well as strengthening financial capacities for urgent actions in case of natural or other disasters – the competent ministry said.

Ministarstvo finansija Republike Srbije

Svetska Banka-WB Beograd

loan from World Bank

Tony Verheijen

project of inclusive pre school education

loan for development policies in managing risks of natural disasters