Serbia is seeking an additional RSD5 billion (€42.3 million) in borrowing for the Danube Corridor, increasing financing for an eastern Serbia expressway whose completion schedule has been repeatedly revised since construction started in 2021.
The government has submitted legislation to parliament authorising a long-term investment loan from Banca Intesa for the Požarevac-Golubac section. The loan agreement was signed on July 24 and provides for a 10-year repayment period, including a three-year grace period. The interest rate will be based on three-month Belibor plus 2.4 percentage points, with Banca Intesa receiving an arrangement fee of 0.3%. The variable-rate structure leaves the government exposed to movements in domestic money-market rates throughout the repayment period.
The new financing comes on top of an earlier RSD16 billion loan, worth approximately €136 million when arranged, as well as funding from Serbia’s state budget. The Ministry of Construction, Transport and Infrastructure says the project is being financed through a combination of budget allocations and loans from domestic banks.
68-Kilometre Corridor Connects Eastern Serbia to E75
The Danube Corridor covers 68 kilometres and is designed to link Golubac and Veliko Gradište with Požarevac and the E75 motorway between Belgrade and Niš. The expressway is designed for speeds of up to 100 kilometres per hour and incorporates numerous bridges, interchanges and roundabouts.
The project is one of the government’s major transport investments in eastern Serbia, where transport infrastructure has historically been weaker than in Belgrade and the country’s northern industrial centres, alongside population decline and lower investment. Officials expect the road to support tourism around the Danube and Đerdap Gorge, improve connections between agricultural and industrial markets, and reduce the journey between Belgrade and Golubac to approximately one hour and 15 minutes.
Contract Value and Completion Dates Have Changed
The Serbian government signed a €337 million design-and-build contract with China’s Shandong Hi-Speed Group in August 2021. The contract was concluded without an open tender under Serbia’s interstate infrastructure agreement with China. The Ministry of Construction, Transport and Infrastructure now places the project’s estimated total investment at €524 million, approximately 55% above the original commercial contract value. The two figures may not cover exactly the same categories of expenditure, and the government has not published a detailed reconciliation between them.
The original political target was to complete the corridor by November 2024. The deadline was subsequently moved to 2025 and then to 2026. In June 2024, the government identified September 2025 as a completion target, describing it as 15 months ahead of the contractual deadline. By the end of 2025, however, officials were saying the remaining construction would be completed during 2026.
Approximately 31.8 kilometres of the expressway opened in February 2025, covering sections around Požarevac and the route between Veliko Gradište and Golubac. The ministry later reported physical completion of roughly 82%, with construction continuing on the central section and related structures.
Additional Debt Adds to Project Financing
The latest borrowing increases the financing requirements for a project that has already received substantial public and bank funding. Delays on major road projects can result from land acquisition, utility relocation, design modifications and increases in construction-material costs. Serbia has also experienced a significant rise in construction prices since the original contract was signed.
The successive financing arrangements nevertheless make it more difficult to establish the project’s complete cost when the initial contract, amendments, budget transfers and financing expenses are not presented together. The government’s eventual fiscal burden will also include interest payments, meaning the overall cost of delivering the road will exceed the published construction investment figures.
Subcontracting Adds Scrutiny to Procurement
The procurement structure has also attracted scrutiny because the main contract was awarded directly under Serbia’s infrastructure agreement with China. The Chinese contractor subsequently transferred approximately €163 million of work to a consortium of Serbian subcontractors, according to documents reported by investigative outlet Insajder.
Those subcontracting agreements were also awarded outside the standard public-procurement system. The project’s economic rationale remains tied to improved transport connectivity. Completing the corridor would provide a continuous road connection towards Golubac and could strengthen tourism and business activity along the Danube. The unfinished sections currently limit the network effects expected from the investment, while the latest RSD5 billion loan adds another layer of financing to a project whose investment estimate and completion timetable have both changed since construction began.
