Bank loan

Montenegro repays second installment of Chinese Exim Bank loan

PODGORICA (Montenegro), Jan 24 (SeeNews) – Montenegro has repaid the second installment of a loan granted by Chinese bank Exim for the construction of the Bar-Boljare highway, the country’s finance ministry has announced.

The government paid 28.96 million euros ($32.8 million) of the second tranche of the loan, realizing savings worth 5.15 million euros, due to an agreement signed in July to cover $944 million in debt owed to China for the construction of the Bar-Boljare highway, the finance ministry said in a statement on Friday.

The total amount of the second tranche of the loan is $38.67 million, including $30.47 million in principal and $8.2 million in interest, the finance ministry said.

“Based on this, the State of Montenegro paid an amount of 27.73 million euros to four banks under the principal and interest cover agreement, while they paid 37.28 million dollars to the state for Exim Bank.In total, the second tranche of the loan cost Montenegro 28.96 million euros, because this final amount includes an additional uncovered part of the principal and interest of 1.4 million dollars,” the finance ministry said.

Thanks to the hedging operation, Montenegro managed to lower the interest rate of the loan to 0.88% in euros against 2% in US dollars and will be able to save around 8 million euros per year, said the minister of Finance Milojko Spajic in July.

In July, Montenegro repaid €27.79 million of loan principal and interest.

($ = 0.8829 euro)