Serbia to borrow EUR 70 million from KfW bank for efficient water supply and wastewater treatment program

A draft law on the ratification of the EUR 70 million loan agreement between the German KfW Bank and the Government of Serbia is currently in the parliamentary procedure. This loan is intended for the program of efficient water supply and wastewater treatment for ecological and sustainable cities in Serbia (Green Cities). The agreement in this regard was signed on December 27, 2024 in Frankfurt and Belgrade.

In addition to the loan agreement, Serbia and KfW Bank are also to conclude two grant agreements.

As for the loan terms, a fixed interest rate is envisaged, which is expressed on the basis of the SWAP rate determined on the basis of the Bloomberg ICAE page plus a margin of 0.65% per annum, which takes into account the non-refundable funds made available by the Government of the Federal Republic of Germany. If the interest rate calculated in accordance with the above falls below 0% per annum, the fixed interest rate will be 0% per annum.

The loan is available until June 30, 2030. Serbia is to repay the loan in 21 equal semi-annual installments in the amount of EUR 3.33 million, due every May 15 and November 15, starting in May 2030 and ending in May 2040.