PODGORICA (Montenegro), July 21 (SeeNews) – Montenegro has repaid the first installment of the loan from the Chinese Exim Bank for the construction of the Bar-Boljare highway, Montenegrin media reported on Wednesday.
“Montenegro paid 27.79 million euros in principal and interest, and the banks paid 37.44 million dollars in principal and interest to the state, which we diverted to the Chinese bank,” the public broadcaster RTCG quoted Finance Minister Milojko Spajic as saying.
Earlier this month, Montenegro signed an agreement to secure approximately EUR 1 billion (US $ 1.2 billion) of debt with China’s Exim Bank for the construction of the Bar-Boljare Highway. With the hedging operation, Montenegro succeeded in reducing the interest rate on the loan from 2% in US dollars to 0.88% in euros and could save around 8 million euros annually, Spajic said at the time.
“Without hedging, these 27.79 million euros would have been 31.71 million euros. In addition, the interest alone would have been 6.9 million euros, not the 3.06 million euros that we paid, ”RTCG quoted Spajic on Wednesday.
The country’s economic development minister Jakov Milatovic said in April that Montenegro was in talks with the European Union about a possible refinancing of the 2014 loan with a six-year grace period and a term of 14 years.
Montenegro’s economy contracted by 15% in 2020 due to the impact of the COVID-19 pandemic on tourism, the main source of income for the Adriatic.
($ = 0.84925 euros)