Budapest-Belgrade railway upgrade financing agreement signed

Int’l Relations

Image by Pixabay

Finance Minister Mihály Varga signed the financing agreement for the planned upgrade of the Budapest-Belgrade railway line on Friday, the minister told state news wire MTI.

Image by pixabay

Under the agreement signed with Chinaʼs Exim Bank, Hungary will finance 85% of the investment costs from credit and the remaining 15% from its own funds, Varga said. The loan has a fixed interest rate and the agreement allows for prepayment, he added. Accordingly, the Hungarian government will initiate early repayment if justified by market conditions.

Varga noted that the agreement for the upgrade was signed in spring 2019 with the Hungarian-Chinese contractor consortium. Work has already started on the Serbian section, which is expected to be completed by the end of 2022. The full project is scheduled to be completed by 2025, the minister said.

China has said it will finance 85% of the cost of upgrading the line which will become part of a corridor for the delivery of Chinese goods to Europe from the Port of Piraeus in Greece.

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