"Nothing is holding back South Stream project"

"Nothing is holding back South Stream project"

Speaking at a Russian-Serbian round table on energy in Belgrade on Thursday, Bajatović said that he expects appropriate solutions regarding a loan agreement for the project to be found next week, adding that the agreement will be signed soon.

This, he said, has also been confirmed by First Deputy Prime Minister Aleksandar Vučić.

Bajatović said that the technical part of the tender for contractors in the construction of the section of South Stream through Serbia has been completed and the contractors will be chosen by the end of April.

This will create the conditions for the works to commence immediately after that, he added.

He pointed out that there have been neither significant delays nor holding back the South Stream project, but rather only a small deviation from the original plan of procedures, as it is vital to negotiate the financial part of the loan agreement carefully.

Bajatović said that the Serbian government has done everything to put this project to implementation. He pointed out that the loan, which Gazprom offered Srbijagas, amounts to about EUR 270 million, and is favorable given a fixed annual interest rate of 4.25 percent and a repayment period of 15 years.

Gazprom has not demanded a state guarantee for this loan, Bajatović said, adding that the original intention of Srbijagas to ask for a EUR 75 million loan as its incorporation stake in South Stream, which also required a state guarantee, has been dropped.

The Srbijagas director and representatives of the Serbian Energy Ministry said during the roundtable that despite the pressure, Serbia has a political will to see the project completed as that is in Serbia’s economic interest.

The fact that Serbia signed a strategic agreement in the energy sector with Russia, passed a special law on South Stream, which serves as a guarantee that the project is of national interest, and signed a transportation agreement guaranteeing that Gazprom will be entitled to a one hundred percent pipeline capacity lease, speaks enough about Serbia's intention to carry the project through to completion.