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China Eximbank reschedules $27,770,943 debt of Government of Serbia (Linked to Record ID#85131)
| Funder | Export-Import Bank of China (China Eximbank) |
|---|---|
| Recipient Organization | Government of Serbia |
| Country | Serbia |
| Start Date | Feb 20, 2009 |
| End Date | Apr 27, 2030 |
| Duration | 7,736 days |
| Number of Grantees | 1 |
| Roles | Recipient |
| Data Source | AidData Chinese Aid |
| Grant ID | 67023 |
Grant Description
On December 23, 1999, China Eximbank signed a general buyer’s credit loan (BCL) agreement [BLA99012] worth $200 million with a Yugoslavian state-owned bank called Beogradska bank a.d., Beograd. The Federal Republic of Yugoslavia (FRY) issued a sovereign guarantee for this loan.
A set of subsidiary loan agreements [no. 99012D, 99012F and 99012G] were subsequently issued to two state-owned power companies: Elektroprivreda Srbije (“JP EPS”) and Elektromreza Srbije (“JP EMS”). Then, Beogradska bank a.d. Beograd went into bankruptcy in early 2002 and the FRY dissolved in 2003.
On February 20, 2009, the Government of the Republic of Serbia signed a Debt Restructuring Agreement with China Eximbank.
In its capacity as guarantor, the Government of the Republic of Serbia assumed responsibility for an outstanding debt obligation to China Eximbank worth $46,296,184.
Under the terms of this agreement, 40% of the outstanding debt (approximately $18,495,448) was written off by China Eximbank. The remaining 60% of the outstanding debt was rescheduled.
The value of the rescheduled debt obligation (60% of the total value of the sum of unpaid principal, accrued but unpaid interest, and accrued penalty interest aggregated in the period ended 25 March 2009) was $27,770,943.88. The new interest rate that was contractually agreed upon by the parties was a 6-month LIBOR plus a 1.3% margin.
The average 6 month LIBOR rate in February 2009 was 1.757%, so AidData has coded the all-in interest rate as 1.757% + 1.3% = 3.057%.
The parties also agreed that the loan principal would be repaid in 22 semi-annual installments (on January 21 and July 21), with a grace period of one year starting from the effectiveness date of the loan.
In the event of delays in settling liabilities matured, a penalty interest rate of 1% above the regular interest would apply.
Record ID#85131 captures the debt forgiveness that was granted to the Government of the Republic of Serbia and Record ID#67023 captures the rescheduling of the outstanding obligations of the Government of the Republic of Serbia.
Staff Comments
According to the financial reports published by JP EPS, it contracted a $35,938,868.58 loan with the Chinese Government on June 25, 2010 to finance the imports of goods and services — including transformers, transmission lines, conveyors and bulldozers — from China. This loan also has an 11-year repayment period (between July 21, 2010 and January 21, 2010) and it also carries an interest rate of 6-month LIBOR plus a 1.3% margin. It is unclear if this loan is distinct from the China Eximbank loan that was rescheduled on February 20, 2009. For the time being, in order to err on the side of caution, AidData does not record a separate loan to capture the loan that JP EPS reportedly contracted on June 25, 2010. However, this issue merits further investigation.No transaction amount is recorded since this project represents a loan rescheduling, not an original flow of resources to recipient country.
Sources & References
- Independent Auditor's Report and Consolidated Financial Statements Year Ended December 31, 2009
- Public Enterprise Electric Power Industry of Serbia Consolidated Financial Statements
- China's overseas lending
- PUBLIC ENTERPRISE ELEKTROPRIVREDA SRBIJE BEOGRAD: CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 AND INDEPENDENT AUDITOR'S REPORT
- PUBLIC ENTERPRISE: 'ELECTRIC POWER INDUSTRY OF SERBIA'
- EPS and Subsidiary Companies - Financial Liabilities on the date 30.06.2014
- Pregled_kredita_JP_EPS JNO 1000-0001-2018 (3642-2018).PDF, 1.2_2014_Cons_Fin_Liabilities_30_06_2014.pdf, Прeглeд финaнсиjских oбaвeзa ЈП ЕПС-а и зависних привредних друштава нa дaн 30.06.2014
- Investing in Central Europe
- 中国进出口银行年度报告, ПРЕДЛОГ ЗАКОНА, ПРЕДЛОГ ЗАКОНА О ЗАВРШНОМ РАЧУНУ БУЏЕТА РЕПУБЛИКЕ СРБИЈЕ ЗА 2012. ГОДИНУ, И З В Е Ш Т А Ј О РЕВИЗИЈИ НАЦРТА ЗАКОНА О ЗАВРШНОМ РАЧУНУ БУЏЕТА РЕПУБЛИКЕ СРБИЈЕ ЗА 20 11 . ГОДИНУ
- Zakon o budzetu 2009 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.
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