State to borrow long-term investment loans from three banks for Belgrade-Zrenjanin-Novi Sad highway

The Government of Serbia has submitted to the National Assembly a proposal for three laws on Serbia’s borrowing from three banks, in connection with the construction of the Belgrade-Zrenjanin-Novi Sad highway. As can be seen, the state plans to take out a loan for this purpose from UniCredit Bank Srbija ad, Banca Intesa ad and NLB Komercijalna banka ad.

As indicated, the borrowing is carried out on the basis of the long-term investment loan agreements signed in July this year with these three banks, and on the basis of the Commercial Agreement on the Design and Execution of Works on the Belgrade-Zrenjanin-Novi Sad Highway Construction Project signed on November 10, 2023, and the Relevant Annex 4 of the Framework Commercial Agreement on the Design and Execution of Works on the Belgrade-Zrenjanin-Novi Sad Highway Construction Project, in the amount of EUR 300,023,446.21, between the Government of the Republic of Serbia, represented by the Ministry of Construction, Transport and Infrastructure as the financier, JP Putevi Srbije as the investor, Koridori Srbije doo as the client, and China Shandong International Economic & Technical Cooperation Group and its branch in Serbia China Shandong International Economic & Technical Cooperation Group Ltd. branch Belgrade as the contractor. The conclusion of the Government of Serbia adopting the Draft Long-Term Investment Loan Agreement between Serbia and these banks for the purposes of financing this project was adopted in July 2026.

As for the debt with UniCredit Bank, it will be made available in the form of a long-term investment loan in dinars. The loan amount, as emphasized, may not exceed 13,000,000,000 dinars at any time and may be used exclusively for financing part of the Belgrade-Zrenjanin-Novi Sad highway construction project, including additional (additional) works at the request of the financier and the client related to the project.

The loan is scheduled to be repaid every six months, and the maturity period is set at 9 years, including a grace period of two years, with repayment of the principal in equal six-month installments. The fee for processing the request and realization of the loan will be 0.30% of the total loan amount and will be paid in one lump sum, and the same amount will be the fee for undrawn funds on an annual basis. The interest rate is also provided for in the form of three-month BELIBOR plus a fixed margin of 2.40% per annum. The loan funds can be withdrawn three years from the date of entry into force of the agreement, and the availability period can be explicitly extended by the bank, in writing, based on a previously submitted written request.

The possibility of early repayment of the loan is also envisaged, if it is assessed to be more favorable from the point of view of public debt management. The early repayment fee will be 1.50% of the loan amount that is repaid early.

When it comes to borrowing from Banca Intesa, a long-term investment loan in the amount of 5,000,000,000 dinars is planned. The loan is scheduled to be repaid quarterly - on January 1, April 1, July 1 and October 1 of each year with a maturity of ten years, including a grace period of three years, with the principal being repaid in equal quarterly installments. Other conditions are the same.

The loan with NLB Komercijalna Banka provides for a long-term investment loan in dinars in the amount of up to 10,000,000,000 dinars. As for the terms, the loan is scheduled to be repaid quarterly on January 5, April 5, July 5 and October 5 of each year, and the maturity period is ten years, including a grace period of three years, with repayment of the principal in equal quarterly installments. The other terms are the same as in the contracts with the other two banks.

As indicated in all three draft laws on borrowing from these banks, the loan beneficiary will use the loan only for the purpose of financing phase 1 of the project, which includes part of Section 1 Belgrade-Zrenjanin, namely subsection 1, the remaining part of the works, not included in Phase 1, on the section from km 0+000 to km 7+100 (including: asphalt works and superstructure, traffic signals, public lighting, telecommunications installations, terrain development and noise protection walls, embankments on bridges, bridge sewage) and complete works on the section from km 7+100 to km 11+500. This work also includes subsection 4 on the section from km 52+000 to km 67+662.46 (including: bridge over the Begej River, complete works on the Ečka interchange, works on the road structure, traffic signals, public lighting, telecommunications installations, terrain improvement, noise protection walls, embankments on bridges) and complete works on the section from km 48+000 to km 52+000.

The Serbian Budget Law for 2026, as stated, approved borrowing for this project in the amount of up to 35 billion dinars. As it is added, in support of greater use of the dinar and reduction of foreign exchange risk in the domestic financial system, the parties agreed that the borrowing in question would be in dinars.

D. A.

Vlada Republike Srbije

Ministarstvo građevinarstva, saobraćaja i infrastrukture Republike Srbije

JP Putevi Srbije Beograd

Koridori Srbije d.o.o. Beograd

China Shandong International Economic and Technical Cooperation Group Ltd

construction of Belgrade Zrenjanin Novi Sad highway