“A secure credit agreement that is favourable for Hungary has been concluded between Hungary and China with relation to the development of the Budapest-Belgrade railway line”, Minister of Finance Mihaly Varga said in a statement to Hungarian news agency MTI on Friday after signing the credit agreement required for the commencement of the investment project.

“Thanks to the conclusion of the agreement, the investment project that could enable Hungary to become our region’s logistics centre can now begin”, the Minister highlighted. “According to the agreement concluded with China Eximbank, the Hungarian state will be financing 85 percent of the investment using credit, and the remaining 15 percent from its own resources and via an initial payment”, Mr. Varga emphasised. “The financial conditions included in the contract are favourable even in comparison to the sovereign debt financing opportunities currently available on the market”, he added.

“Financial planning and calculability are reinforced by the fact that the loan has a fixed rate of interest, meaning the conditions will not change even if the market experiences a possible downturn. In addition, the credit agreement also enables early repayment, and accordingly the government will be continuously monitoring market conditions, and if it is favourable for Hungary, will initiate early repayment”, the Minister explained.

“The agreement on the modernisation of the railway line was concluded with the Hungarian-Chinese consortium that will be the contractor of the investment project last spring”, Mr. Varga reminded the press. “Refurbishment work is already underway on the Serbian stretch of the railway line, and is expected to be completed by the end of 2022. The goal is for the construction of the whole railway line to be completed by 2025”, the Hungarian Finance Minister highlighted.

(Ministry of Finance/MTI)