Serbia approves EUR190m of sovereign guarantees for gas monopoly
The Serbian parliament approved on Thursday sovereign guarantees worth EUR190m for loans the country's state-run gas monopoly needs to repay overdue debts, Reuters reports. The repayment will clear the way for Srbijagas to start building in December a EUR1.5bn section of Gazprom's South Stream gas pipeline, which aims to pump up 63bn cubic metres of gas per year under the Black Sea to southern Europe as of 2015.
Under the borrowing plan, the Srbijagas will seek five-year loans from seven banks, which will be indexed to the euro but paid out in the local dinar currency. Deutsche Bank, Amsterdam Trade Bank and Volksbank would secure a total of EUR140m. Serbian subsidiaries of the OTP Bank, Societe Generale and UniCredit will provide 10m each, while the Vojvodjanska Banka, a part of the National Bank of Greece will secure another 20m.
The guarantees were pencilled into the 2012 budget, which sees the deficit at 6.2% of GDP by the end of the year, the parliament said in a statement.