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Serbia, Russia to clear mutual debts through development projects

Belgrade, 18 June 2004

Serbian Minister of International Economic Relations Predrag Bubalo gave a statement to the national broadcaster Radio-Televizija Srbije (RTS) last night, speaking about his visit to Russia and a new agreement on how to clear mutual debts. The Serbian government’s web site brings excerpts from the statement.

Predrag Bubalo

On a new debt clearance agreement:

We agreed to clear mutual debts through development projects and I believe that Serbia will benefit form the agreement. We believe that Russia can settle its debt with Serbia through various equipment that can be used for the Djerdap hydro-electric power plant, mines and other production facilities that need to be repaired. On the other hand, we can clear a portion of our debt with Russia’s Gazprom and settle the rest of the debt by giving the Russian side stakes in local companies or through other investment projects that might interest Gazprom, such as the construction of an underground gas storage facility in Banatski Dvor of gasification projects in Central and Southern Serbia.

On the size of mutual debts:

We have yet to sign a debt settlement arrangement. According to initial estimates, Russia owes Serbia 288 in clearing dollars, while state oil company Naftna Industrija Srbije (NIS) owes Gazprom some $245 million for gas deliveries before 2000.

On how Serbia can repay the debt:

We can clear the debt by giving Gazprom shares in domestic companies or including it in projects and allowing it not to pay for concessions. I believe that would really contribute to mutual development.