Active Development AidData Chinese Aid

China Construction Bank provides $190 million loan for 17 km Brčko-Bijeljina Road Project

$190M USD

Funder	China Construction Bank Corporation (CCB)
Recipient Organization	China Overseas Engineering Group Co., Ltd. (COVEC)\|China Tiesiju Civil Engineering Group Co., Ltd.
Country	Bosnia and Herzegovina
Start Date	Feb 22, 2023
End Date	Jun 11, 2028
Duration	1,936 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`102628`

Grant Description

China Construction Bank provides $190 million loan for 17 km Brčko-Bijeljina Road Project On May 16, 2022, the first Memorandum of Understanding was signed for the financing of the Brčko-Bijeljina Road Project.

On February 22, 2023, China Construction Bank, China Overseas Engineering Group Co Ltd., China Tiesiju Civil Engineering Group Co Ltd., and Public Enterprise ‘Autoputevi Republika Srpska’ d.o.o. signed an EPC Plus Financing (EPC+F) contract for the 17 km Brčko-Bijeljina Road Project.

Under the terms of the contract, China Construction Bank agreed to provide a $190 million loan to a consortium of EPC contractors consisting of China Overseas Engineering Group Co Ltd., China Tiesiju Civil Engineering Group Co Ltd.

The EPC contractors agreed to use the proceeds of the loan to finance their EPC contract with Public Enterprise ‘Autoputevi Republika Srpska’ d.o.o.

📋 Loan / Grant Terms

💰 Loan Amountcarries the following borrowing terms: a 15-year maturity

📅 Maturity15 years

⏳ Grace Period3 years

The purpose of the project is to construct a 17-kilometer section of highway from Brčko to Bijeljina.

Upon completion, the road segment is expected to connect the region's main town of Banja Luka with the Serbian capital Belgrade.

China Overseas Engineering Group Co Ltd. and China Tiesiju Civil Engineering Group Co Ltd. are the EPC contractors responsible for project implementation. Construction began in September 2022. The project was originally expected to reach completion in the fall of 2026.

📋 Staff Comments

This project is also known as Lot 2 of the Brčko-Bijeljina-Rača Highway Project. The Chinese project title is 布尔奇科-比耶利纳高速公路项目. The Serbian project title is Лот Дионица Брчко – Бијељина.
Under most EPCF (EPC+F) contractual arrangements, a loan is extended to the EPC contractor but with a sovereign guarantee from the host government. Therefore, AidData assumes that the loan issued to China Overseas Engineering Group Co Ltd. and China Tiesiju Civil Engineering Group Co Ltd. is backed by a repayment guarantee from the Government of Republika Srpska (i.e. a sovereign guarantee).
One source (https://seenews.com/news/chinese-group-to-start-works-on-brcko-bijeljina-motorway-in-apr-1265216) suggests that construction was not scheduled to commence until April 2025. This issue merits further investigation.

📚 Sources & References

Chinese consortium seals highway deal with Bosnia's Serb Republic
Chinese consortium seals highway deal with Bosnia's Serb Republic
A Contract was signed for the Construction of the Section of the Brcko-Bijeljina Highway
Signed contract on construction of 17 kilometers of Brčko-Bijeljina highway section
Objavljen tender za autoput Brčko-Bijeljina: Povezivanje sa Beogradom
BRČKO - BIJELJINA - BORDER WITH SERBIA
DODIK ZAHVALAN KINEZIMA ZA SPREMNOST DA SARAĐUJU SA SRPSKOM: Izgradnja novih 17 kilometara auto-puta
中海外签约波黑布尔奇科-比耶利纳高速公路项目，加速巴尼亚卢卡与贝, Почела градња аутопута Бијељина - Рача, Траса кроз Брчко под посебном лупом
独家丨中企海外项目周报（2023.2.25-2023.3.3）, Потписан уговор о изградњи дионице Брчко – Бијељина, Све већи интерес кинеских банака за пројекте у Српској, Протокол предсједника Владе Републике Српске за четвртак, 23. фебруар 2023. године
Was the Brčko – Bijeljina section promised to the Chinese ten years ago?
中海外签约布尔齐科—别利那高速公路第一标段设计施工及融资项目谅解备忘录 - 中国一带一路网
Public company 'Autoputevi Republika Srpska' d.o.o. Banja Luka A PC Vase Pelagića 10, 78 000 Banja Luka
Chinese consortium to build €179mn Bosnia-Serbia motorway stretch
Chinese consortium seals highway deal with Bosnia's Serb Republic
Chinese group to start works on Brcko-Bijeljina motorway in Apr Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.