Completed Mixed AidData Chinese Aid

China Eximbank provides $297.6 million preferential buyer’s credit for the Belgrade-Stara Pazova Section of Hungarian-Serbian Railway Project (Linked to Record ID#67021 and #68443)

$297.64M USD

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Serbian Ministry of Finance
Country	Serbia
Start Date	May 16, 2017
End Date	Jan 26, 2031
Duration	5,003 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`67020`

Grant Description

China Eximbank provides $297.6 million preferential buyer’s credit for the Belgrade-Stara Pazova Section of Hungarian-Serbian Railway Project On November 24, 2015, the governments of China, Hungary, and Serbia signed two cooperation documents for the Project of Modernization and Reconstruction of Hungarian-Serbian Railway Line (also known as 匈塞铁路 project), including a general contract for the cooperation of the Serbian section of the Hungary-Serbia Railway, marking the official start of the Hungary-Serbia Railway project.

The Hungary-Serbia Railway will run from Budapest, the capital of Hungary, to Belgrade, the capital of Serbia, for a total length of 350 kilometers, including 166 kilometers in Hungary and 184 kilometers in Serbia. The railway was an electrified passenger and freight mixed-line express railway. The total cost of the project of the project was estimated to be EUR 1-1.5 billion.

The Serbian section was divided into three sections.

The first section, Belgrade-Stara Pazova, was 34.5 kilometers long, the second section from Stara Pazova to Novi Sad was 40.5 kilometers long, and the third section from Novi Sad to Subotica was 108.1 kilometers long.

The first section and second sections of the railway were constructed by the consortium formed by China Communications Construction and China Railway International, while the second section of the railway fell under the responsibility of Russia's subsidiary Russian Railways International.

Then, on November 5, 2016, China Eximbank and the Government of the Republic of Serbia signed a Memorandum of Understanding on financing the Project of Modernization and Reconstruction of Hungarian-Serbian Railway Line on the Territory of the Republic of Serbia.

Then, on May 16, 2017, China Eximbank and the Government of the Republic of Serbia’s Ministry of Finance signed a preferential buyer’s credit (PBC) agreement [CHINA EXIMBANK NO. PBC (2017) 9 (435)] worth $297,638,159 for the Belgrade-Stara Pazova Section of the Hungarian-Serbian Railway Project.

📋 Loan / Grant Terms

📅 Maturity20 years

⏳ Grace Period5 years

💹 Interest Rate2%

The proceeds of the loan (PBC) were used to be used by the borrower to finance 85% of the $350,162,540 value of the commercial contract [number 351-5684/2016-2] between the Government of the Republic of Serbia’s Ministry of Construction, Transport and Infrastructure, the Joint Stock Company for Public Railway Infrastructure Management “Infrastructure of Serbian Railways”, and a joint venture of China Railway International Co.

Ltd & China Communications Construction Company Ltd, which was signed on November 5, 2016.

The lender made disbursements worth $59,528,000 in 2018, $37,648,000 in 2019, $34,304,000 in 2020, and $96,724,000 in 2021.

The loan’s (principal) amount outstanding was $59,528,000 as of December 31, 2018, $97,176,000 as of December 31, 2019, $131,480,000 as of December 31, 2020, $228,204,000 as of December 31, 2021, and $294,224,000 as of September 31, 2022.

This project involves the reconstruction and modernization of a 34.5 km double-track section of the Hungarian-Serbian Railway that runs from the capital city of Belgrade to Stara Pazova.

It was designed to accommodate speeds of up to 200 km per hour and to reduce the travel time between the Serbian and Hungarian capitals from eight hours to less than three hours. It was also designed in accordance with EU standards.

The agreement for the Serbian section of the rail line stipulated that only 46% of the contract may go to local Serbian companies.

Zorana Mihajlović, Deputy Prime Minister and Minister of Construction, Transport and Infrastructure of Serbia, said that the first section of the Hungarian-Serbian Railway in Serbia was expected to begin construction in November 2017. China Railway International Co. Ltd and China Communications Construction Company Ltd were the EPC contractors responsible for implementation.

Project implementation commenced on November 28, 2017. The left line of the Belgrade-Zemun section of the Hungary-Serbia Railway was opened successfully on October 21, 2020.

The Belgrade-Stara Pazova Section of the Belgrade-Budapest Railway was successfully put into operation on March 19, 2022. The Belgrade-Stara Pazova Section was originally scheduled to open to traffic by the end of 2021.

📋 Staff Comments

This project is also known as Project of Modernization and Reconstruction of Hungarian-Serbian Railway Line on the Territory of the Republic of Serbia, for Section Belgrade Center-Stara Pazova. The Chinese title for the project is 贝尔格莱德—旧帕佐瓦段 (匈塞铁路). The Serbian project title is Пројекат модернизације и реконструкције мађарско–српске железничке везе на територији Републике Србије, за деоницу Београд Центар – Стара Пазова.
The project is closely related to the China Eximbank-financed Novi Sad-Subotica-State Border (Kelebija) Section of the Hungarian-Serbian Railway Project (captured in Project ID#67021) and the China Eximbank-financed Hungary section of the Hungary-Serbia Railway Project (captured in Project ID#68443).
The Belgrade-Zemun (贝尔格莱德-泽蒙) section is the first section of the Hungary-Serbia railway project with a total length of 6.9 kilometers. It is part of the larger 34.5 km Belgrade-Stara Pazova section.
The loan (PBC) agreement can be accessed in its entirety via https://www.dropbox.com/s/d4fd92pkijplye5/%20Project%20of%20Modernization%20and%20Reconstruction%20of%20Hungarian-Serbian%20Railway%20Line.doc?dl=0.

📚 Sources & References

Share to phone Hungary-Serbia Railway, the flagship of the Belt and Road Initiative, 2017 Annual Report
Belgrade-Budapest railway construction starts
Bulletin Public Finance
China and Serbia Expanding Cooperation
China backs Hungarian rail project
China inks deal to finance new high-speed railway across the Balkans
China lends $300 mln to Serbia for railway overhaul project
China's CRI
CCCC to complete Serbian railway project by end-202
CRE Consortium to begin work on Budapest-Belgrade railway upgrade
Europe economy: The 16+1: mixed results and modest prospects
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Foreign Ministry Spokesperson Zhao Lijian's Regular Press Conference on October 23, 2020
HERBERT SMITH FREEHILLS ADVISES CHINA’S EXIM BANK ON FINANCING OF BUDAPEST-BELGRADE RAIL PROJECT 史密夫斐尔助力中国—中东欧重大合作成果落地
High-speed rail to Stara Pazova due in March, rail to Novi Sad in Fall 2021
Hungary to Serbia railway now well on track
Hungary-Serbia Railway Project Makes Significant Progress Hungarian Section Signs Loan Agreement
IJGlobal - Budapest - Belgrade Railway Upgrade
INFRASTRUCTURE Chinese companies sign Serbian railway upgrade agreement
Monthly Report PDA - April, 2018
Overhaul of Belgrade-Budapest railroad to start in November
PREFERENTIAL BUYER CREDIT LOAN AGREEMENT ON PROJECT OF MODERNIZATION AND RECONSTRUCTION OF HUNGARIAN–SERBIAN RAILWAY LINE ON THE TERRITORY OF THE REPUBLIC OF SERBIA
FOR SECTION BELGRADE CENTER–STARA PAZOVA
Project of Modernization and Reconstruction of Hungarian-Serbian Railway
Project of Modernization and Reconstruction of Hungarian-Serbian Railway Line
Project of Modernization and Reconstruction of Hungarian-Serbian Railway Line
Public Finance Bulletin, 2018
Public Finance Bulletin, 2019
Public Finance Bulletin, 2020
Public Finance Bulletin, 2021
Public Finance Bulletin, 2022
Public Finance Bulletin, 2023
Public Finance Bulletin, 2024
Public Finance Bulletin
December 2018
Public Finance Bulletin
December 2019
Public Finance Bulletin
December 2020
Public Finance Bulletin
December 2021
Public Finance Bulletin
January 2018
Public Finance Bulletin
September 2022
Quarterly Report 20180930
Serbia and China sign Belgrade – Budapest loan agreement
Serbia borrows $297.6 million from China to overhaul railway line
Serbia receives Chexim loan for rail project
Serbia Seeks China's Assistance Amid EU Pressure on Belgrade
Serbia
Hungary Seal Rail Deal at Belgrade Summit
Serbia/Hungary: Two agreements on cooperation in rail sector signed
Serbia: Left track of Belgrade-Budapest to be completed in March 2020
Serbia: Overview of Finalized Projects
Serbia: PROJECTS December 2017
Serbian president satisfied with progress in Belgrade-Budapest railway construction
SKM_C65820080612110
The first European project of China Railways is expected to start construction in November
The potential for growth through Chinese infrastructure investments in Central and South-Eastern Europe along the “Balkan Silk Road”
UPDATE 3-Hungary
China sign loan deal for Budapest-Belgrade Chinese rail project
Zakon, Китайцам с сербами по пути, „Serbian Railways“ Director General Dragoljub Simonović Discussed with Representatives of Chinese EXIM Bank and Hungarian Railways in Belgrade on Modernization of Belgrade - Budapest Line
中铁国际代表考察塞匈铁路项目现场
匈塞铁路
匈塞铁路塞尔维亚贝-旧段举行开工仪式
匈塞铁路塞尔维亚贝诺段举行通车仪式
匈塞铁路项目塞尔维亚境内段举行启动仪式
匈塞铁路首段建成通车运营
塞尔维亚基本情况及我 “一带一路”倡议实施条件
塞尔维亚总统：匈塞铁路将于明年3月开通运行
对外投资指南塞尔维亚2018
对外投资指南塞尔维亚2019
武契奇视察匈塞铁路旧帕佐瓦-诺维萨德段高架桥施工现场
莫米洛维奇：加快匈塞铁路建设
重大项目
驻塞尔维亚大使陈波陪同武契奇总统视察匈塞铁路塞境内路段
驻塞尔维亚大使陈波陪同武契奇总统视察匈塞铁路建设工地 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.