Russia To Provide Loan Finance For Serbia-Montenegro High Speed Rail Link
Op/Ed by Chris Devonshire-Ellis
Moscow Reclaiming Financial Authority In The Balkans
Russia and Serbia have signed an agreement for a loan of €172.5 million during the weekend visit of Prime Minister Dmitry Medvedev to Belgrade on Saturday.
The loan is for the upgrade of the railway to a high-speed line from the Serbian city of Valevo to the border with Montenegro, the creation of a unified dispatch center, in addition to the provision of electrical infrastructure in the sections between Belgrade, Hungary’s Budapest and Stara Pazova – Novi Sad. Russia is lending €172.5 million euros, while another €57.5 million will be allocated by the Serbian Government. This will usher in high speed rail from Budapest via Belgrade to Bar. Bar is Montenegro’s major port on the Adriatic Sea. A Chinese consortium has been building the Budapest-Belgrade section.
Since 2014, Russian Railways has been carrying out large-scale work on the modernization and construction of railway infrastructure in Serbia. At the moment, the reconstruction of the Belgrade-Pancevo section, railway facilities as part of the development of the Pan-European Transport Corridor X, the Resnik-Valevo section of the Belgrade-Bar line has been completed. Russian has also delivered diesel trains to Serbia. Bar is Montenegro’s major sea port opening out on the Adriatic, and the improved link provides both incoming goods via Bar better access to Serbian and Hungarian markets as well as providing improved potential for Serbian and Hungarian exports via Montenegro’s Bar Port.
The loans come as Serbia opted to join the Eurasian Economic Union rather than the European Union last month, and at a time when the EU has broken promises to both Albania and North Macedonia concerning negotiations over joining the EU. The EU has also been heavily criticized by Budapest over claims of soverignity infringement when Brussels blocked a Chinese-won tender for improvements to the rail service between Budapest and Belgrade. These incidents provide Moscow with the opportunity to promote the Eurasian Economic Union as a Trade Bloc alternative to the European Union in the Balkans.
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