Serbia’s Expo 2027 Relies on Chinese Contractors and Serbian Sovereign Financing

Serbia’s Expo 2027 programme combines extensive involvement by Chinese engineering companies with financing that is largely carried by the Serbian state rather than Chinese policy banks.

Chinese state-owned contractors have secured major roles in construction, equipment supply and transport infrastructure, while funding for the programme is coming primarily from the Serbian budget, domestic bank borrowing and the country’s broader sovereign financing programme. The structure differs from a single China Exim Bank-backed infrastructure package tied to Chinese contractors.

The Serbian Fiscal Council estimates total expenditure on Expo 2027 and directly related projects at approximately €3.4 billion. By the end of 2025, about €1.25 billion had been spent on Expo in the narrower sense and approximately €750 million on associated infrastructure, including the National Stadium, linear infrastructure and railway connection. That brought cumulative spending to roughly €2 billion through 2025. Plans for 2026 and 2027 add approximately €550 million for Expo itself and another €850 million for associated infrastructure.

Broader project scope expands the fiscal envelope

The Fiscal Council’s €3.4 billion estimate is broader than the earlier €1.29 billion figure published for the Expo operating company. The latter covered the exhibition area and a defined group of supporting assets, while the wider estimate includes additional investments, associated current expenditure, subsidies and major connected projects. The programme is large enough to affect Serbia’s public-investment composition but is not, by itself, considered sufficient to destabilise sovereign finances. The principal fiscal exposure arises from its interaction with other capital programmes, energy-sector guarantees, defence spending and Serbia’s comparatively high borrowing costs.

The Fiscal Council expects the fiscal deficit to remain around 3 per cent of GDP in 2026 and 2027, with central-government debt broadly stable in the mid-40 per cent range of GDP. Serbia’s interest expenditure is around 1.9 per cent of GDP, compared with an EU average of 2.1 per cent, despite Serbia having a substantially lower debt ratio.

PowerChina takes major construction packages

Power Construction Corporation of China (PowerChina) occupies a central position in Expo-related construction. Ministry of Finance disclosures identify PowerChina as the directly contracted main contractor for the linear infrastructure serving the new Surčin development, the National Football Stadium, Expo preparatory works and construction of Expo facilities. The contracts were registered between April 2023 and March 2024, with the Republic of Serbia acting as financier or investor through the Ministry of Finance.

The disclosed project register identifies the contractor and procurement method but does not publish the complete values of the major PowerChina packages. PowerChina is also constructing the railway linking Zemun Polje, Nikola Tesla Airport, the National Stadium and the Expo area under a contract valued at €188.1 million. The project was directly awarded under the Serbia-China intergovernmental infrastructure agreement, with financing identified as coming from the Serbian state budget.

Chinese companies supply trains and railway infrastructure

CRRC Changchun Railway Vehicles is supplying nine electric multiple-unit trains for the Expo and Belgrade suburban railway network under a €73.98 million contract. The agreement was concluded directly under the bilateral Serbia-China framework and is financed from the Serbian budget.

China Shandong International Economic is responsible for reconstructing and expanding the Novi Beograd railway station complex under another directly awarded contract worth €138 million, also financed from the Serbian budget. The three publicly valued transport contracts — the PowerChina railway, CRRC trains and Novi Beograd station — have a combined value of €400.08 million. They exclude the substantially larger PowerChina contracts covering the Expo complex, National Stadium and linear infrastructure, for which complete contract values have not been published in the same disclosures.

The concentration of several connected projects under PowerChina can reduce coordination problems between designers and contractors and assist Serbia in meeting the fixed opening date of 15 May 2027. It also reduces the number of competing price references available to the state and increases reliance on a single corporate group for several critical project paths. The Expo exhibition itself is scheduled to run for 93 days, ending on 15 August 2027, increasing the financial consequences of delays as the opening deadline approaches.

China Exim Bank is not financing the main Expo assets

China remains an important creditor to Serbia, but Chinese policy-bank lending represents only a portion of the country’s public debt. As of 31 May 2026, Serbia owed €2.765 billion to the Export-Import Bank of China, compared with total central-government public debt of €41.14 billion. China Exim therefore accounted for approximately 6.7 per cent of central-government debt and around 9.6 per cent of direct external debt.

China Exim was the fourth-largest creditor category after eurobonds, dinar government securities and commercial-bank loans. Available project descriptions, debt reports and loan legislation do not identify a dedicated China Exim Bank or China Development Bank facility financing the central Expo complex, National Stadium, Expo railway, nine trains or Novi Beograd station reconstruction. The disclosed funding sources instead identify the Serbian budget or domestic Serbian borrowing.

Serbia’s financing model differs from other Chinese projects

The structure contrasts with the $850 million Fruška Gora Corridor, where China Exim Bank finances 85 per cent of the accepted contract amount, Serbia provides the remaining 15 per cent from its budget and China Road and Bridge Corporation is the directly selected contractor. The official documentation for that project explicitly identifies both Chinese policy-bank financing and the Chinese contractor. No comparable Chinese policy-bank financing package has been disclosed for the principal Expo assets.

Expo 2027 is therefore being financed through Serbia’s broader sovereign resources while Chinese EPC companies carry substantial responsibility for implementation. Serbia can raise funds through eurobonds, domestic securities and commercial-bank or multilateral borrowing before allocating budget resources to contracts with Chinese companies. This structure places borrowing and refinancing exposure more broadly on Serbia’s balance sheet rather than within a ring-fenced Chinese financing facility.

National Stadium illustrates domestic borrowing structure

The National Stadium provides a direct example of the financing arrangement. The Republic of Serbia contracted a RSD42 billion long-term investment loan from Banka Poštanska štedionica to finance construction. At the official mid-August 2026 exchange rate, the amount is approximately €358 million. PowerChina is the construction contractor, but the financing comes from a Serbian bank and is denominated in Serbian dinars.

The loan has a maturity of up to 132 months, including an availability and grace period of up to 36 months, followed by 32 equal quarterly principal instalments. Its floating interest rate is set at three-month BELIBOR plus 2.90 percentage points. Three-month BELIBOR stood at 4.70 per cent in mid-August 2026, producing an indicative current interest rate of approximately 7.60 per cent. If the full RSD42 billion were utilised, gross annual interest at that rate would be about RSD3.19 billion, or approximately €27.2 million, before principal repayments.

The actual cost will depend on the timing and size of drawdowns and future BELIBOR resets. The loan’s 0.30 per cent upfront fee is equivalent to RSD126 million. The dinar denomination avoids direct foreign-exchange exposure on the stadium loan, while introducing domestic floating-rate exposure. The arrangement places the financing and interest-rate risks with Serbia while PowerChina receives construction payments and Serbian public entities remain responsible for the completed asset.

Special procurement procedures limit price visibility

Procurement transparency represents a separate structural issue for the Expo programme. The Serbian Fiscal Council estimates that public-sector entities concluded procurement contracts worth approximately €15 billion in 2025, with almost €7 billion contracted outside the regular Public Procurement Law. Intergovernmental agreements accounted for roughly one quarter of the value of those exempted contracts. The Council has said that the values and implementation of individual bilateral agreements remain insufficiently disclosed, limiting the ability to assess the efficiency of public spending.

Expo-related reporting illustrates the difficulty of reconciling the available figures. A Ministry of Finance report recorded approximately RSD14.9 billion in Expo procurement under special procedures in 2025, while budget-execution data recorded approximately RSD66 billion for the wider Expo programme.

The discrepancy does not establish that expenditure is undisclosed or improper because the two figures can cover different projects and accounting categories. It does demonstrate that publicly available information does not yet provide a single, fully reconcilable picture linking contracts to total budget expenditure. The issue also intersects with Serbia’s EU accession process. The European Commission’s 2025 report said Serbia continues to circumvent standard procurement legislation through intergovernmental agreements and special laws, explicitly including legislation for Expo 2027.

The Commission identified concerns over legal remedies, tender deadlines, competition and transparency for projects contracted through intergovernmental agreements. Direct awards can accelerate mobilisation and reduce the possibility that tender challenges disrupt a fixed event schedule. At the same time, they remove competitive bids that could provide a market benchmark for EPC pricing, risk allocation, escalation mechanisms and contingency provisions.

Cost overruns would add to Serbia’s fiscal burden

Serbia’s central-government debt was approximately 43.7 per cent of GDP in May 2026, and the Fiscal Council considers the medium-term debt trajectory sustainable. China’s €2.765 billion in Exim Bank exposure is significant but represents too small a share of total sovereign debt to establish Chinese control over Serbia’s financing. The fiscal risk is instead incremental. A 15 per cent cost overrun on the Fiscal Council’s €3.4 billion programme would add approximately €510 million to expenditure. A 25 per cent overrun would increase the bill by approximately €850 million.

At an illustrative marginal financing cost of 5–6 per cent, those additional amounts would generate approximately €25.5 million to €51 million in annual interest before amortisation.

Serbia’s broader debt structure also remains exposed to external financing conditions. Almost 79.7 per cent of public debt was denominated in foreign currencies at the end of May 2026, principally euros and dollars. The dinar-denominated stadium loan provides some diversification but does not materially remove foreign-currency exposure from the overall sovereign portfolio.

Post-Expo assets retain Serbian operating exposure

The financial test will extend beyond completion of the exhibition. The railway connecting the city, airport and Surčin district has an identifiable long-term transport role. The new trains and Novi Beograd railway station can likewise serve the wider Belgrade metropolitan network. The post-2027 commercial case is less established for the National Stadium, exhibition halls, aquatic facilities and new urban district. Their economic performance will depend on event bookings, commercial occupancy, housing use, transport integration, maintenance requirements and the ability to avoid continuing operating subsidies.

Completion of construction does not transfer those risks to PowerChina or other Chinese contractors. Once EPC obligations are settled, Serbian public entities remain exposed to operating costs and the revenues generated by the assets.

Expo combines Chinese execution with Serbian sovereign risk

The available financing structure does not support classifying Expo 2027 as a conventional Chinese debt-trap project. China Exim Bank accounts for approximately 6.7 per cent of Serbia’s central-government debt, while the principal Expo assets do not have a disclosed unified Chinese policy-bank financing facility. Serbia continues to finance itself through eurobonds, domestic securities, commercial banks and multilateral lenders. The programme instead combines concentrated Chinese contractor participation with Serbian sovereign financing. Chinese EPC companies hold major positions across interconnected construction and transport projects, while Serbia carries the financing costs, potential contract variations, schedule pressures and long-term utilisation risks.

The construction deadline creates increasing pressure as 15 May 2027 approaches. Procurement and cost transparency remain significant issues because the largest PowerChina contract values and amendments are not presented through a fully reconcilable public contract register. Serbia’s sovereign refinancing exposure remains manageable, while the principal unresolved financial issue concerns the long-term operating and commercial performance of assets whose demand is less directly connected to transport functions. The structure of Expo 2027 is consequently defined less by Chinese lending than by the division between Chinese companies executing major contracts and Serbian institutions carrying the financing and long-term asset risks.