Serbia to borrow EUR 630 million for phase 1 of Belgrade Subway – Law on financial protocol with France in parliamentary procedure

The Law on the ratification of the financial protocol between the Government of Serbia and the Government of France on cooperation in the field of financing phase 1 of the Belgrade subway project, which was drafted on December 19, 2025, is in parliamentary procedure.

As stated in the draft law, the Government of France approves financial support to the Government of Serbia for phase 1 of the Belgrade subway project “which is in line with the priorities of the Government of Serbia.”

As specified, the funds provided by the Serbian side amount to 32%, the funds provided by the French Treasury amount to 15%, and the funds provided through bank loans guaranteed by Bpifrance Assurance Export amount to 53%.

– In accordance with the OECD Arrangement on Officially Supported Export Credits, French support represents a maximum of 85% of the total value of the repatriable part of the project (the repatriable part represents all goods and services of French origin and goods and services from third countries) and Serbian goods and services in a maximum amount of up to 50% (fifty percent) of the repatriable part of the contract – the document emphasizes.

French support, in a maximum amount of up to EUR 680 million, is provided in the form of a direct loan from the French Treasury to the Government of Serbia in the amount of up to EUR 150 million and a commercial loan in the amount of up to 530 million EUR through bank loans with a guarantee from Bpifrance Assurance Export for the implementation of the project. The funds to be provided by the Serbian side cover the remaining financial needs for the satisfactory completion of the project, the document notes, adding that Serbia may choose additional sources of financing for this project, outside the framework provided for by this protocol, with the aim of successfully completing its implementation, and will inform France about this.

The risk premiums corresponding to the approval of financial support will be borne by the Government of Serbia.

– For a direct loan from the French Treasury, the loan agreement will be signed by the Serbian Ministry of Finance and Bpifrance Assurance Export. For a commercial contract registered in accordance with this protocol, the repayment period of the financial support will be determined by the Government of France in accordance with the rules of the OECD Arrangement, and it cannot be longer than 15 years. The principal of the loan will be repaid in successive semi-annual installments with an equal amount of principal, with the first installment due six months after the start of the loan repayment period – the draft law states.

As added, for a commercial loan through bank loans with a guarantee from Bpifrance Assurance Export, the financial terms will be subject to negotiations between the banking institutions and the Serbian side.

Default interest, as indicated, will be calculated according to the ESTER (Euro Short-Term Rate) interest rate, increased by 3% per annum, but not less than 5% per annum.

The commission on undrawn funds of 0.5% per annum for the French Treasury loan will be paid by Serbia. It is calculated semi-annually on a daily basis on the unused amount of financial support related to the registered commercial contract and is paid semi-annually. The calculation currency and payment currency will be the euro.

To use the financial support from the financial protocol, the commercial contract signed between the French supplier and the Serbian buyer must be registered no later than December 31, 2026.

As indicated, the approved financial funds cannot be withdrawn after December 31, 2031.

– These deadlines can be extended only in exceptional circumstances after mutual consent of the parties, formalized by an exchange of letters – it was emphasized.

Let us remind that the first phase of line 1 of the Belgrade subway includes 15.4 km of underground subway network with 15 stations and ten operational shafts. The project includes a surface section of 2.1 km from the depot area to the Makis station, a 2.1 km excavation and cover section from the Makis station to the Bele Vode station, and a deep underground section of 11.2 km from the Bele Vode station to the Pancevo Bridge.

The Law on the Budget of the Republic of Serbia for 2026 for financing the Belgrade Subway construction project, phase 1, provides for borrowing from the Republic of France - the Treasury, in the amount of up to EUR 150 million, as well as from foreign investment corporations, funds and banks, in the amount of up to EUR 1.5 billion, which refers to bank loans for which guarantees are provided by Bpifrance Assurance Export, on behalf of and for the account of the Government of France, in the maximum amount of EUR 530 million.

Vlada Republike Srbije

Government of Serbia

Government of France

French Treasury

Bpifrance Assurance Export

Law on the ratification of the financial protocol between the Government of Serbia and the Government of France on cooperation in the field of financing phase 1 of the Belgrade subway project