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Serbia receives $1 billion loan from UAE

Staff writer |
First Deputy Prime Minister Aleksandar Vucic said Serbia received a $1 billion loan from the United Arab Emirates (UAE), by which it will annually save $40 million, or approximately $400 million in ten years.

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Speaking at an open government session, at which the conclusion on accepting the loan from the UAE was adopted unanimously, Mr. Vucic said that Serbia has never received a more favorable loan and expressed his hope that a part of the money will be used for debt repayment, while a portion will be invested in boosting the economy.

Minister of Finance Lazar Krstic said the loan was approved at an interest rate of two percent and a maturity of ten years, and the repayment will begin six months from the date the money is released. According to him, the principal will not be repaid until the end of the period, which means that there is a grace period of ten years on the principal.

The money will be transfered in one tranche at the moment when Serbia meets the conditions for that, meaning when Serbian Parliament ratifies the loan, which it will most probably do at the beginning of the second quarter of 2014.

The Minister pointed out that since there are no conditions regarding how the money will be spent, the government is considering the best options, especially if there is room for refinancing some of the expensive loans, or for repaying at least the principals.

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