EBRD and Serbia Discuss Loans Amid ‘Borderline’ Level of Debt

Published on 21. November 2011., Uncategorized

 

The European Bank for Reconstruction and Development suggested that Serbia accept two infrastructure loans even though the country is nearing a self-imposed public debt limit.

The EBRD has earmarked 200 million euros ($270.2 million) for Serbia’s state-run rail company Zeleznice Srbija to rebuild tracks and 45 million euros for Elektroprivreda Srbije, or EPS, the country’s power monopoly, to develop new and overhaul old hydro plants.

The bank advised that the loan to EPS be concluded before the end of the year as “all preparations have been completed,” while the other may be divided into smaller parts, starting with a 35 million-euro tranche, Serbia’s Infrastructure Ministry said in a statement today.

EBRD officials discussed the “fate of the agreed loans” at a time of “borderline high debt level of Serbia,” the office of Infrastructure Minister Milutin Mrkonjic said in the statement, promising the government will respond tomorrow.

Serbia is close to its self-imposed public debt limit of 45 percent of gross domestic product. At the end of October, the total public debt, comprising the government’s liabilities to creditors at home and abroad, was 44 percent of GDP.