MIGA Adds Support to Serbia’s Motorway Project
WASHINGTON, January 3, 2024 – The Multilateral Investment Guarantee Agency of the World Bank (MIGA) has issued guarantees of €901 million ($973 million) to four banks for their loans to Serbia’s ministry of finance. The guarantees provide non-honoring of sovereign financial obligation coverage to develop, construct, and operate a highway and flood prevention systems along the West Morava River for a period of up to 15 years.
The banks are J.P. Morgan Chase Bank N.A. London Branch of the United States, Banco Santander S.A. of Spain, Crédit Agricole Corporate and Investment Bank of France, and ING Bank of Germany.
This additional support is in addition to more than €513 million in guarantees provided in 2022 and earlier in 2023 to J.P. Morgan, Banco Santander, Crédit Agricole Corporate and Investment Bank, CaixaBank, S.A., UBS Switzerland AG, and Raiffeisen Bank International AG. Overall, MIGA’s guarantees to the project total approximately €1.4 billion.
The project consists of a greenfield six-lane, 112-kilometer dual-carriageway tolled motorway in a low-level flood plain along the West Morava River Valley. In addition, the project includes bridges, culverts, over/under passes, digital corridor supported by power lines, tolling systems, and river regulation works to protect its surrounding areas from flooding.
"MIGA is glad to support the motorway project in the Republic of Serbia, which we hope will contribute to its economic progress,” said Hiroshi Matano, MIGA Executive Vice President. “Incorporating climate resilience measures in our projects ensure that sustainable infrastructures are built for long-term growth and prosperity.”
The Morava region is prone to flooding due to the extreme and unpredictable fluctuation of its river’s discharge. To prevent major disruptions due to flooding, the motorway’s design will ensure continuity of road connectivity during the wet season. It will have limited impact from climate hazards due to significant climate resilience measures implemented throughout the river valley.
“J.P. Morgan is pleased to lead additional financing requirements for the Morava Corridor, one of the largest ongoing infrastructure projects in the country. The highway will connect key commercial centers across Serbia, building an economic corridor that will form a critical part of Serbia’s development progress and we congratulate Republic of Serbia and MIGA on another successful loan closing”, said John Meakin, Global Head of Export & Agency Finance at J.P. Morgan.
The project will improve road quality and safety, save travel time, and enhance telecommunication connectivity. It is expected to generate travel time savings by doubling vehicle average speed. Construction of the motorway began in November 2020, and it is expected to employ around 3,100 workers.
Serbia’s economy rebounded quickly from the initial COVID-19 shock. MIGA’s credit enhancement will facilitate competitive pricing for longer-term funding from commercial loans for the government of Serbia.
About MIGA
MIGA was created in 1988 as a member of the World Bank to promote foreign direct investment in emerging economies by helping to mitigate the risks of restrictions on currency conversion and transfer, breach of contract by governments, expropriation, and war and civil disturbance; and offering credit enhancement to private investors and lenders. Since its creation, MIGA has issued over $76 billion in guarantees across 123 developing countries, supporting more than 1,000 projects. Over the past decade, MIGA’s guarantees have generated more than 156,000 jobs in developing countries.
Contact:
In Washington:
Elizabeth Howton, ehowton@worldbankgroup.org or +1 (202) 458-5922
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