Russia $800m credit for Serbia

Russia’s government will grant Serbia an $800 million, five-year credit line to overhaul its railways, Serb and Russian government officials said. The loan, carrying an annual interest rate of 4.1 per cent, will support Serbian infrastructure projects including railway construction and maintenance, Russian Finance Minister Anton Siluanov was quoted as saying in Moscow by Interfax and RIA news agencies. “We have been awaiting that announcement for quite some time and it will be put to a good use as railways ... are crucial for investments and growth,” a Serb government spokesman said. Two years ago, Serbia’s former President Boris Tadic and his Russian counterpart Dmitry Medvedev agreed a $1 billion loan as part of a wider energy and economic deal. Serbia has already drawn $200 million for budget support in 2010. “This is the finalisation of that deal,” the government spokesman said. “There will be a Russian company that will perform an overhaul of the Serb railway grid in cooperation with Serbian subcontractors.” Serbia has borrowed heavily to finance its budget deficit, seen at 6.2 per cent of gross domestic product (GDP) by end-year. Its debt burden is expected to reach 60 per cent of GDP by year-end under a revised 2012 budget.