Skopje, 8 October 2024 (MIA) - Minister of Finance Gordana Dimitrieska-Kochoska, as a representative of the Government, signed Tuesday the EUR 500 million loan agreement with the Hungarian Export-Import Bank.

The Minister said the loan terms are favorable with a repayment period of 15 years, a three-year grace period and an interest rate of 3.25 percent.

“The Government's decision to realize the planned foreign borrowing in the 2024 Budget through a bilateral loan from Hungary instead of issuing a new Eurobond, came because of the favorable terms that we received and the funds we will save just on interest. The interest rates for such an amount on the international market are around 6 percent and this represents a significant amount of funds saved in the budget, i.e., an annual saving of around EUR 14 million. Additionally, the repayment period is also advantageous and comes with a lower risk of needing to refinance the loan,” Dimitrieska-Kochoska said, noting that the terms are a result of the policies led by the Government which, she said, were also affirmed by Fitch Ratings last week.

The portion of the loan that is intended for businesses, according to the Minister, will be offered at favorable terms, which, she said, “will result in the beginning of an investment cycle in the private sector of over EUR 500 million that will ensure higher rates of economic growth”.

The funds are expected to be wired to the country’s budget accounts by the end of the week.

The other portion of the loan will be intended for the realization of capital projects in the municipalities.

The loan was agreed by Prime Minister Hristijan Mickoski and Hungarian counterpart Viktor Orban during this year's NATO Summit in Washington. The law for the loan was adopted by Parliament on September 17 in an expedited procedure.

Opposition party SDSM assessed the Hungarian loan as a “big corruption project” that future generations would have to pay for.

Former Deputy Prime Minister for economic affairs Fatmir Bytyqi criticized the political aspect of the loan, noting that the political price for the loan could be more harmful and more significant than the benefits. 

Photo: Ministry of Finance