State to borrow EUR 260 million to finance works on Morava Corridor

The Government of Serbia has adopted the Draft Law on the Confirmation of the Credit Arrangement Agreement, which concerns an unsecured loan of up to EUR 260 million with a guarantee from the British agency UKEF. The funds will be used to finance construction services performed in Serbia by Bechtel Enka UK Limited, through its branch in Belgrade, for the needs of the company Koridori Srbije (Corridors of Serbia), in connection with the construction of the infrastructure corridor of the E-761 highway, the Pojate-Preljina section, known as the Morava Corridor.

The law is being passed in order to confirm the Credit Arrangement Agreement signed on October 27 between the Republic of Serbia, represented by the Government of the Republic of Serbia, acting through the Ministry of Finance, as the borrower, and J.P. Morgan SE, as Agent, JPMorgan Chase Bank, N.A., London Branch, as the Original Authorized Lead Arranger, Credit Agricole Corporate and Investment Bank and ING Bank N.V., as Authorized Lead Arrangers, and certain other financial institutions, as Original Lenders.

The Morava Corridor, Pojate-Preljina section, is approximately 110 km long and connects central Serbia with key international transport routes, Corridors 10 and 11. The construction of the highway increases accessibility to municipal centers, economic zones and tourist destinations, connecting the settlements of Cicevac, Stalac, Krusevac, Trstenik, Vrnjacka Banja, Kraljevo and Cacak.

The credit arrangement provides for a loan of up to EUR 260 million, with a maturity of up to 12 years, including a two-year grace period.

The interest rate is variable and is based on 6M EURIBOR with a fixed margin of 0.6% per annum, while the commission on undrawn funds is 40% of the margin amount, charged semi-annually.

I. Z.

Vlada Republike Srbije

Koridori Srbije d.o.o. Beograd

Ministarstvo finansija Republike Srbije

Bechtel Enka UK Limited

JPMorgan Chase Bank

Crédit Agricole Corporate and Investment Bank

Draft Law on the Confirmation of the Credit Arrangement Agreement

which concerns an unsecured loan of up to EUR 260 million with a guarantee from the British agency UKEF

Morava Corridor