April 24 (SeeNews) - Hungary's government has signed a loan agreement with the Export-Import Bank of China (Exim Bank) to finance 85% of the cost for the overhaul of the railway line linking Budapest to Serbia's capital Belgrade on Hungarian territory, finance minister Mihaly Varga said on Friday.
The loan has a fixed interest rate and Hungary will be able to repay it ahead of schedule without any penalties, Varga said in a statement by the Hungarian finance ministry without disclosing details.
The Hungarian government plans to finance with own resources 15% the cost for the overhaul of the railway line on Hungarian territory, which is expected to be completed by 2025, Varga said.
A consortium of Hungarian and Chinese firms signed in June 2019 a $2.1 billion (1.95 million euro) contract to upgrade the Hungarian section of the Budapest-Belgrade rail line. The contract was won by CRE Consortium, 50% of which is owned by RM International, a unit of Hungary’s Opus Global. The remaining 50% of the consortium is held by China Tiejiuju Engineering & Construction and China Railway Electrification Engineering Group.
In November 2017, Serbia started modernising the section of the railway line linking Belgrade to Budapest on its territory. The overhaul represents the first cross-border project carried out by Serbia, Hungary and China in the framework of the China-Central and Eastern European Countries (CEEC) cooperation initiative. The overhaul of the railway line in Serbia is expected to be completed by 2022.
($ = 0.9288 euro)