Serbia Signs Russia Loan, Abu Dhabi Investment for GrowthGordana Filipovic
Serbia signed a Russian loan and an Abu Dhabi investment pledge worth more than $1 billion to the Balkan country as it seeks to support construction and agriculture, the two worst-performing industries in 2012.
Farming output fell more than 17 percent and construction activity declined 9.9 percent in the third quarter of 2012, helping push gross domestic product down an estimated 2 percent. The five-month-old Cabinet of Prime Minister Ivica Dacic is trying to attract industrial investments, bolster growth and add jobs at a time when one in five is out of work.
The investments will “contribute to accelerating economic growth and significant improvement of Serbia’s foreign trade balance,” Finance Minister Mladjan Dinkic’s press office said in a Jan. 13 statement.
Dinkic toured Russia and Abu Dhabi on the weekend and signed an $800 million, five-year loan with Russia to upgrade its obsolete rail network. He also met with the head of NPO Uralvagonzavod OAO, the sole bidder for its steelworks in Smederevo, and expects the company to make a binding offer within a month, according to the statement.
In the United Arab Emirates, Dinkic signed a preliminary pact with Al Dahra Agricultural Co. worth 100 million euros ($133.5 million) to acquire an 80 percent stake in eight farming enterprises and invest just as much in the Serbian irrigation network and a port, to create infrastructure for more exports, Dinkic’s press office said on Jan. 13.
The Abu Dhabi Fund for Development will consider financial support while Abu Dhabi’s sovereign investment fund Mubadala Development Co. is considering a multi-billion euro information technology factory.
Mubadala is “interested in considering investments in an entirely new factory” in Serbia, at a cost of around 4 billion euros, which would employ 1,000 top engineers, Dinkic said, according to the statement.
The semiconductor plant would exceed a third of total investments Serbia attracted between 2005 and 2011, according to central bank data.