The Government of Serbia has presented the Bill for the confirmation of a credit agreement with the French Development Agency (AFD) to the National Assembly for approval. The agreement, valued at €60 million, will fund the second phase of the modernization of Serbia’s railway sector.
This credit arrangement provides Serbia with access to the funds until May 15, 2030. The agreement allows the country to choose between a fixed or variable interest rate when repaying each installment. The variable interest rate is based on the six-month EURIBOR plus a margin of 0.65%, while a fixed interest rate can be selected if the withdrawal amount is greater than or equal to €3 million, subject to the contract’s maximum limits.
The contract also highlights provisions from French consumer protection and financial laws, ensuring that AFD informs Serbia about the maximum or global effective interest rate. The effective annual global interest rate (Taux Effectif Global) applicable to the loan is 3.11%, with a six-month interest period set at a rate of 1.54%. The loan has a ten-year maturity, including a six-year grace period.
After the grace period ends, Serbia will begin repaying the principal amount in eight equal semi-annual installments. The first installment will be due on November 15, 2030, with the final payment scheduled for May 15, 2034.
The loan agreement was signed in November of the previous year. The total value of the railway sector modernization project is €120 million, which is also supported by the International Bank for Reconstruction and Development (IBRD). The bill to confirm the credit agreement with AFD is now under review by the National Assembly.
