Serbia is financing three major road projects with RSD 62.6 billion ($535 million) in loans from domestic commercial banks, increasing the role of local-currency funding in the country’s infrastructure programme.
The financing arrangements were ratified by parliament on August 31 and cover the Bački Breg-Sombor-Kikinda expressway, the Belgrade-Zrenjanin-Novi Sad motorway and the Požarevac-Golubac section of the Danube Corridor. The largest loan, worth RSD 29.6 billion, is being provided by AIK Banka, OTP banka Srbija, Banca Intesa and UniCredit Bank Srbija for the Bački Breg project. It carries an interest rate of six-month BELIBOR plus 2.4 percentage points.
For the Belgrade-Zrenjanin-Novi Sad motorway, UniCredit, Banca Intesa and NLB Komercijalna banka are providing RSD 28 billion, primarily at three-month BELIBOR plus 2.4 percentage points. Banca Intesa is separately extending RSD 5 billion for the Požarevac-Golubac road.
Domestic Banks Expand Infrastructure Financing Role
The combined facilities amount to about €534 million, making the package a significant example of commercial bank financing for large-scale transport infrastructure in Serbia. The structure allows the government to borrow in dinars rather than relying exclusively on euro-denominated sovereign financing. Domestic banks provide access to local liquidity without the procedures associated with multilateral development-bank financing.
Serbia’s infrastructure programme has traditionally drawn on bilateral loans, Chinese financing, Eurobond issuance and funding from institutions such as the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD). The greater use of domestic lenders creates another funding channel while placing a larger share of infrastructure exposure within Serbia’s financial system.
BELIBOR Links Project Costs to Domestic Rates
The dinar structure reduces the state’s direct exposure to currency movements compared with borrowing denominated in euros. However, all three facilities carry exposure to BELIBOR, leaving future debt-servicing costs dependent on domestic interest-rate conditions.
A prolonged period of elevated Serbian interest rates would increase the financing cost of projects with repayment periods extending well beyond the construction phase. For banks, the facilities provide large-ticket infrastructure assets with state-backed counterparties and margins above benchmark rates. Serbian lenders remain liquid and profitable, while non-performing loans are historically low.
The expansion of infrastructure lending nevertheless increases the connection between commercial bank balance sheets and the government’s investment programme.
Road Programme Extends Across Serbia
The three financed projects form part of a wider pipeline covering motorways, expressways, railways and Expo-related infrastructure under construction or preparation across the country. The financing model also connects domestic lenders with international construction companies involved in Serbia’s infrastructure programme.
The road projects include contracts involving AzVirt and China Shandong International Economic & Technical Cooperation Group, creating a structure in which Serbian banks provide financing, the state assumes the repayment obligation and foreign contractors execute significant parts of the construction work. The increased use of domestic bank financing therefore adds another component to Serbia’s existing infrastructure funding model, alongside international sovereign and development-bank sources. The RSD 62.6 billion package also comes as Serbia expands its use of local-currency financing, with domestic banks taking a larger position in funding major public infrastructure projects.
