Srbijavoz to borrow EUR 90 million for purchase of new train engines and modernization of trains – State to provide loan guarantee

The Government of Serbia has confirmed the Guarantee Agreement with the European Company for the Financing of Railroad Rolling Stock (EUROFIMA), which provides a state guarantee for a loan of 90 million euros intended for the improvement of rail traffic. These funds will be used by the company Srbijavoz for the purchase of new vehicles and the modernization of the existing ones, and the guarantor of the payment will be the Republic of Serbia.

Credit funds will be used for the purchase of new train engines (EUR 40 million), the modernization of diesel engine trains of the 711 series (EUR 25 million), as well as the modernization of Z1 type passenger cars for international traffic (EUR 25 million). The modernization project is planned for the period from 2024 to 2027.

In addition to upgrading the existing rolling stock, Srbijavoz also plans to purchase six new modern train engines that will enable more efficient and competitive passenger transportation to Western European destinations, especially after the completion of the Belgrade-Budapest high-speed railroad. The modernization will include about 20 passenger cars of the Z1 type, which will enable train traffic at a speed of up to 200 km/h, in accordance with European standards.

The loan will have a maturity period of 10 years, and the funds will be withdrawn in one or more instances, with the defining of the financial conditions for each withdrawal.

The interest rate will be variable, linked to the six-month EURIBOR, increased by 60 basis points, while the total financing costs (the interest rate, the basic commission of 0.05% and the fee for the cost of the capital of 0.59%) will amount to the six-month EURIBOR increased by 124 basis points.

Other financial conditions will depend on the date of the acquisition and modernization of rolling stock, and they will be defined after the signing of specific contracts.

Let us remind that Ivan Bulajic, the acting director general of Srbijavoz, announced for eKapija in October 2023 that the company was negotiating with EUROFIMA about a loan of EUR 90 million for the purchase of the most modern locomotives that can travel at speeds of up to 200 kilometers per hour, that have the ETCS system on modern railroads.

I. Z.

Vlada Republike Srbije

Srbijavoz a.d. Beograd

European Company for the Financing of Railroad Rolling Stock

EUROFIMA

Ivan Bulajić

purchase of new train engines

modernization of diesel engine trains of 711 series

modernization of passenger cars of Z1 type