Serbia is turning increasingly to its domestic banking sector to finance major transport infrastructure, securing RSD 62.6 billion (€534 million) in loans for three road projects.
The facilities cover the Bački Breg-Sombor-Kikinda expressway, the Belgrade-Zrenjanin-Novi Sad motorway and the Požarevac-Golubac section of the Danube Corridor, strengthening the role of Serbian commercial banks in the country’s infrastructure investment programme.
The largest facility amounts to RSD 29.6 billion and was arranged by AIK Banka, OTP banka Srbija, Banca Intesa and UniCredit Bank Srbija for the Bački Breg-Sombor-Kikinda project. The loan carries an interest rate of six-month BELIBOR plus 2.4 percentage points and matures in June 2036. A further RSD 28 billion facility for the Belgrade-Zrenjanin-Novi Sad motorway is being provided by UniCredit, Banca Intesa and NLB Komercijalna banka, while Banca Intesa is separately financing the Požarevac-Golubac project with a RSD 5 billion loan.
Shift Toward Local-Currency Infrastructure Financing
Serbia has traditionally funded major infrastructure through a combination of Eurobond issuance, bilateral government loans, Chinese policy-bank financing, the European Investment Bank and the European Bank for Reconstruction and Development. The growing participation of domestic commercial banks provides another source of financing as the government advances projects in roads, railways, energy, Expo 2027-related construction and the Belgrade Metro.
The use of dinar-denominated loans also changes the state’s exposure. Since government revenues are primarily collected in local currency, such borrowing reduces direct exposure to movements in the euro-dinar exchange rate compared with foreign-currency debt. The loans, however, are linked to BELIBOR, transferring part of the financing risk from foreign-exchange movements to domestic interest rates. Any sustained increase in domestic borrowing costs would raise the total cost of servicing the facilities over their long maturities.
Banks Become More Closely Linked to Infrastructure Investment
The road financing package increases the exposure of Serbia’s largest banks to government-backed infrastructure projects. Such loans provide lenders with sizeable volumes, established counterparties and margins over benchmark rates. For the government, domestic bank liquidity can provide financing without a new Eurobond issue or the longer assessment processes associated with multilateral lenders.
Serbian banks remain strongly capitalised, while non-performing loans are historically low. At the same time, larger infrastructure exposure creates a closer connection between bank balance sheets and public investment programmes as additional road, railway and energy projects enter construction.
Road Projects Combine Local Financing and Foreign Contractors
The three projects form part of Serbia’s broader transport infrastructure expansion. The Bački Breg-Sombor-Kikinda corridor is intended to improve connections in northern Serbia toward Hungary and Romania. The Belgrade-Zrenjanin-Novi Sad motorway will strengthen links between Belgrade, Banat and Novi Sad, while the Danube Corridor project extends road infrastructure toward Požarevac and Golubac.
The projects also involve international construction companies, including AzVirt and China Shandong International Economic & Technical Cooperation Group. This creates a financing and construction structure in which Serbian banks provide capital, the state carries the repayment obligation and international engineering companies undertake significant parts of project execution.
Dinar Financing Expands Serbia’s Funding Options
A larger domestic market for long-term infrastructure borrowing gives Serbia additional flexibility in managing access to international capital markets and could contribute to the development of a longer-term dinar financing curve. The government’s recent opening of Serbian dinar government bonds to international investors through Euroclear is also consistent with a broader expansion of local-currency financing.
For the three road projects, however, financing costs remain linked to the movement of BELIBOR because the facilities are priced against the domestic benchmark. The €534 million package therefore represents not only additional funding for Serbia’s road network but also a growing role for domestic commercial banks in financing the country’s large-scale infrastructure programme.
