November 16 (SeeNews) - Serbia's infrastructure minister Zorana Mihajlovic said the government has agreed to finance railway infrastructure works, spending the full amount of a $800 million (680 million euro) loan extended by Russia for state-run railway operator Zeleznice Srbije.
Three years ago, not a single project had been funded with proceeds from the Russian loan and its value was decreasing due to the depreciation of the US dollar, Mihajlovic said in a video file posted on the website of news agency Tanjug on Wednesday.
The Russian loan will allow Serbia to have high-speed railway lines with a total length of 520 km, supporting train speed of between 120 km/h and 150 km/h inr three years, Mihajlovic said.
Serbia's government said on Wednesday it agreed 247.9 million euro financing for a project for reconstruction of Stara Pazova-Novi Sad railway section with Russian railway infrastructure firm RZD International using the $800 million loan.
Russia's RZD International completed the overhaul of the Resnik-Valjevo section of the railway line linking Serbia's Belgrade to Montenegro's Bar on November 14. A total of $79.9 million was invested in the project.
In December 2016, Serbia's government said it signed a protocol to extend until 2021 the deadline for the use of a $800 million loan extended by Russia to complete all projects financed by the credit.
Serbia and Russia signed the loan deal in January 2013. The proceeds from the loan, which was extended at an interest rate of 4.1%, were earmarked for the upgrade of railway sections of pan-European transport Corridor X in Serbia, as well as for the modernisation of the Belgrade-Bar track, the Beograd-Pancevo track and the construction of the Valjevo-Loznica section.
Under the initial terms of the loan, Serbia had to use all the proceeds from the loan by the end of 2017.
($=0.8499 euro)