Financing is being secured for a key road project in Serbia - image © courtesy of Vasile Bobirnac, Dreamstime.com
Contractor Bechtel has been able to secure a funding package worth €430 million for an important road project in Serbia. The guaranteed loan has been agreed with UK Export Finance for a 5G-ready highway stretch in Serbia.
Bechtel will construct the road in partnership with Turkish contractor Enka and with the assistance of the UKEF-supported Buyer Credit Facility. This is the first export credit deal to be concluded by UKEF for Serbia’s Ministry of Finance. Bechtel and Enka have been joint venture partners on a number of successful highway projects in the Balkans Region in the past. Perhaps the most notable of these was the award-winning highway project connecting Kosovo's capital Pristina with the Albanian border.
According to Bechtel, the deal is worth €150 million to the UK economy, driving investment into local communities and supporting jobs.
The Morava Corridor (Infrastructure Corridor E-761) will be the second major transport artery in Serbia. It will connect Pojate in the east to Preljina in the west and provide a link to Serbia’s North-South highway, which runs between the country’s borders with Hungary and North Macedonia.
“This welcome support from UK Export Finance will allow Bechtel, together with our partner ENKA, to deliver this transformational infrastructure project using goods and services exported from the UK,” explained Brendan Bechtel, Bechtel chairman and CEO. “At a time of post-COVID-19 recovery, this investment in the supply chain will benefit both the UK and Serbian economies.”
Bechtel Enterprises, the project development and financing arm of Bechtel, supported the Republic of Serbia throughout the financing process together with JP Morgan Chase Bank as mandated lead arranger of the facility. Global law firm Ashurst advised JP Morgan and UK Export Finance on the financing.
The project poses interesting challenges due to the terrain and a major flood defence system is included in the design to protect surrounding areas from flooding, erosion, and subsequent water pollution. This is the first flood mitigation system of this scale to be built alongside a highway in the Balkans.
