Government Confirms Agreement on Loan of EUR 700 Million for Construction of Morava Corridor

The members of the Government of Serbia have adopted the Bill on Confirming the Agreement on a Loan of EUR 700 Million which pertains to the unsecured loan to the end of financing the construction services provided by Bechtel Enka for the construction of the Morava Corridor.

As said, this is a loan between the Republic of Serbia, represented by the government and acting through the Ministry of Finance as the beneficiary of the loan and J.P. Morgan SE as the agent and JPMorgan Chase Bank N.A., London Branch, as the initial mandated lead arranger, and Banco Santander, S.A. New York Branch, Crédit Agricole Corporate and Investment Bank and ING Bank, a branch of ING-DiBa AG, as mandated lead arrangers and designated other finance institutions, as the initial lenders. The loan is provided with insurance by the Multilateral Investment Guarantee Agency (MIGA).

The loan agreement, as reminded in the explanation of the law, was signed in London in June 2021 between the Republic of Serbia and J.P. Morgan AG as the agent and JPMorgan Chase Bank, N.A., London Branch, as the arranger, and JPMorgan Chase Bank, N.A., London Branch, as the initial lender, with the support of UK Export Finance (UK's export credit agency), in the amount of EUR 431.7 million.

– For the purpose of the continued realization of this strategically important infrastructure project and securing the remaining amount of financing supported by the MIGA, on December 10, 2021, the Loan Agreement was signed, pertaining to an unsecured loan of up to EUR 400 million related to the construction of the infrastructure corridor of the E-761 highway, section Pojate-Preljina (Morava Corridor), and confirmed at the National Assembly – said the explanation of the law.

The explanation reminds that the 2023 Budget Law envisages the state’s borrowing from foreign investment corporations, funds and banks up to EUR 800 million for the financing of the construction of the Morava Corridor.

– Considering the need for securing additional financial funds for the purpose of the realization of said project in the amount of up to EUR 100 million within the already approved MIGA guarantee, which enables the Republic of Serbia to retain the favorable financial conditions in line with the signed Loan Agreement which pertains to an unsecured loan up to the amount of EUR 400 million with the MIGA guarantee, it was necessary to sign the Letter on Amendments with a repeated statement of the Letter of Engagement – it is said.

Therefore, this summer, as said, the National Assembly adopted the amendments to that agreement.

I. Z.

Vlada Republike Srbije

Ministarstvo finansija Republike Srbije

JP Morgan SE

JPMorgan Chase Bank NA London Branch

Banco Santander SA New York Branch

Crédit Agricole Corporate and Investment Bank

ING Bank a branch of ING DiBa AG

UK Export Finance

Bechtel Enka

Agreement on the Loan on the Construction of the Morava Corridor

Morava Corridor

construction of the Morava Corridor