13.12.2012.

KfW Approves Loan Worth EUR 100 Million to the Republic of Serbia

On behalf of the German Federal Government, the German Development Bank KfW has approved to the Republic of Serbia a loan worth EUR 100 million. The loan is intended for financing projects in the fields of agriculture, energy efficiency, renewable energy and municipal infrastructure. Loans will be onlent to end-users through intermediary banks. The National Bank of Serbia is the Republic of Serbia’s agent for this loan.

The funds will be onlent by three intermediary banks – Komercijalna, ProCredit and Čačanska. Komercijalna banka will onlend EUR 30 million for agriculture and food industry and EUR 25 million for municipal infrastructure, ProCredit bank EUR 40 million for agriculture and food industry, and Čačanska bank EUR 5 million for energy efficiency and renewable energy.

Up to EUR 1 million will be made available to end-users through intermediary banks for projects in agriculture, energy efficiency and renewable energy, and up to 1.2 million for municipal infrastructure. The maturity of loans will be up to 7 years, and the grace period up to 2 years. The interest rate will not exceed the highest rate charged by an intermediary bank for the same-purpose loans from other sources. 

In agriculture, funds will be provided for primary production and food industry, including the purchase of agricultural land, facilities, mechanisation and equipment, breeding stock, investment in organic agriculture and fruits production, and investment in working assets of up to 10% of the total loan amount.

Energy loans will be used to finance reconstruction, renovation or refurbishment of small and medium-sized enterprises and households in Serbia which will result in lower per unit energy consumption and reduction in CO2 emission by at least 20%. 

Municipalities will be able to use loan financing for the construction and reconstruction of water pipelines and sewerage systems, purchase of special vehicles and machinery for providing utility services and public transport, reconstruction of streets, construction and rehabilitation of electricity networks, public lighting and urban heating systems, as well as for construction and/or refurbishment of social infrastructure, such as schools, kindergartens, health care institutions and similar. Municipalities beneficiaries of these loans with proven success in the implementation of energy efficiency and environment protection projects will be eligible to apply for EU donations worth 10-20% of the loan amount.

The German Government and KfW pointed out that this credit line is in keeping with the development goals of improving access to finance and raising the competitiveness of small and medium-sized enterprises in Serbia, which will give boost to economic development and employment.      

Governor`s Office