8th October 2024, Skopje – Loan Facility Agreement signed with Hungarian Export- Import Bank was signed in Budapest. Loan Facility Agreement signed on behalf of the Government, and in line with the Law on Borrowing a Loan by the Republic of North Macedonia at the Hungarian Export – Import Bank, private limited company, under the Loan Facility Agreement, was signed by Minister of Finance, Gordana Dimitrieska- Kochoska.
“By today’s signing of the Agreement, EUR 500 million has been provided as budget support, thus underpinning both the local development via municipal projects and the economy as a whole. Our economy was in pressing need therefor, given the poor economic activity recorded in the first quarter, which entailed taking actions that will result in boosted and intensified economic activity. Moreover, implementation of the municipal projects was a necessity given their positive impact on the economic activity, while also playing part in the resolution of certain burning issues of our citizens”, Minister of Finance said upon the signing ceremony.
Loan, as she underlined, is extended under favourable terms and conditions, with repayment period of 15 years, including 3-year grace period and 3.25% interest.
“Government’s decision to provide the planned external borrowing under the 2024 Budget via bilateral loan from Hungary, rather than by issuing new Eurobond, was made on the basis of the favourable terms and conditions offered thereby, and the savings to be made upon the interest alone. Interest rates on such amount would have otherwise accounted for 6% on the international market, thus implying a substantial Budget savings on this basis, i.e. savings of around EUR 14 million on annual basis. Another advantage thereof is the maturity period, accompanied by a lower risk of a need for refinancing”, Dimitrieska-Kochoska said, adding that these favourable terms and conditions are also a result of the policies this Government pursues, as also affirmed by Fitch Credit Rating Agency, which will play an important role as regards the interest rates when our country is to make a borrowing on the financial markets.
According to the Minister, what matters is that one portion of the loan intended for the companies will also be made available under favourable terms and conditions, thus being the cause of launching an investment cycle in the private sector of over EUR 500 million, which will produce higher economic growth rates.
The loan funds are to be disbursed by the end of the week, after which, they will be absorbed as planned.
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