Montenegro paid China $40,7 million for the construction of the highway


The Ministry of Finance of Montenegro has paid the fifth tranche of a loan to the Chinese bank Exim for the construction of a priority section motorway Bar-Bolyare in the amount of $40,7 million, reported Pobjeda.

The ministry clarified that the amount of $32,79 million relates to the principal amount, and the remaining amount of $7,91 million relates to interest on the loan.

“Obligations to Exim Bank are expressed in US dollars, and when settling obligations, Montenegro is obliged to provide dollars and repay obligations in dollars. Considering that the state has earned about $64,03 million by exiting the hedging scheme, this amount will be used to pay the fifth installment. Therefore, there is no need to provide dollars to the market, because they are already provided, which avoids conversion costs,” the ministry said.

They added that if Montenegro were required to provide dollars, without a hedging arrangement, dollars would be bought at the market rate, so the cost of the fifth installment in euros at the average exchange rate of the Central Bank on July 19 would be about 36,2 million euros.

“If, on the other hand, the hedging agreement had been continued on the same terms as defined in the 2021 agreement, which is not possible because market conditions have changed significantly and the agreement could not be continued on the same terms, the value of the fifth tranche of the loan in euro would be about 30,9 million euros,” the message says.

So far, the government has repaid a $208,7 million loan to Chinese bank Exim to build the highway.

"Of this amount, $124,9 million is for principal and $83,8 million is for interest." At the same time, it should be taken into account that interest payments began in 2015, and repayment of the principal debt began in 2021,” the Ministry of Finance said.

Repayment of the loan for the construction of the motorway to date

The first installment of the loan was paid on July 21, 2021: principal repayment amounted to $29,21 million, and interest was repaid in the amount of $8,12 million. The second installment on the loan was paid on January 21 last year - the principal amount is $30,47 million, and the interest is $8,2 million, Pobieda recalls.

The third installment was repaid in July last year, with principal amounting to $32,41 million and interest of $8,21 million, and the fourth installment was paid on January 21 this year - principal repayment of $32,78 million, with $8,38 million repaid on an interest basis.

The department recalled that the loan with Exim Bank was concluded in 2014, with a maturity of 20 years, with a six-year grace period.

“The last payment on the loan must be made on January 21, 2035, when the loan is repaid. In total, $786,9 million of the principal amount of the loan remains to be repaid,” the ministry said.

The priority section of the Bar-Bolyare highway was officially opened on July 13 last year, and the next day it was put into operation. The total length of the first section of the highway is 41,5 km, including 20 bridges on the main highway, nine bridges on roundabouts, two overpasses, eight underpasses, 7,2 km of concrete walls, and 16 double-pipe tunnels.

The plot has four loops with toll ramps, on which the connection of the highway with the existing state is realized, namely Smokovac, Pelev Brijeg, Veruša and Mateševo ​​(Smokovac, Pelev Brijeg, Veruša, Mateševo). Top speed is limited to 100 kilometers per hour.

Ten days ago, motorway operator Monteput reported that 2,16 million vehicles have traveled on the motorway since it opened, and almost 8,75 million euros in tolls have been generated in that period.

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