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The Government of the Republic of Serbia

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Russia, Serbia-Montenegro sign debt clearance protocol

Moscow, 30 June 2004

A protocol on yesterday’s agreement between the Russian, Serbian, and Montenegrin finance ministers, Alexei Kudrin, Mladjan Dinkic, and Igor Luksic respectively, concerning the clearance of mutual debts from the times of the former Yugoslavia and Soviet Union and expanding business cooperation between the two countries was signed in Moscow earlier today.

Russia’s debt to the former Yugoslavia is $306.8 million, while Serbia’s state-owned oil and gas company NIS owes $243.3 million to Russian energy giant Gazprom for natural gas delivered between 1994 and 2000.

The protocol was signed by Sergey Kolotuhin on behalf of the Russian Ministry of Finance, Mladjan Dinkic on behalf of the Serbian Ministry of Finance, and Idriz Cetkovic of the Montenegrin central bank, on behalf of Minister Luksic. The protocol represents a stepping stone for an agreement that is to be signed by the two countries’ government this autumn.

The ministerial agreement and a separate agreement reached in Moscow between Dinkic and Gazprom President Alexei Miller envision that $188.8 million, out of Russia’s $288.8 million debt to Serbia, will be used to settle most of NIS’s debt to Gazprom ($188.8 million), while the remaining $100 million will be spent on the reconstruction of the Djerdap hydroelectric power plant and construction of an accelerator station in the Vinca institute. The remaining $55 million NIS owes to Gazprom will be rescheduled for eight years.

The agreement with Gazprom envisages the termination of a short-term gas supply contract with Russian supplier and introduces a long-term, steady delivery of natural gas to Serbia, including an increase in this year’s deliveries to over two billion cubic metres, or 200 million cubic metres more than in 2003, the Tanjug news agency reported.

This document also envisions a long-term cooperation between Gazprom and NIS, including investment by the Russian company into the building of underground storing facilities for natural gas in the Serbian town of Banatski Dvor and the construction of Serbia’s gas network (Nis-Dimitrovgrad, Nis-Leskovac, and Leskovac-Pristina).