SARAJEVO, Jan 4 (Reuters) - Bosnia’s autonomous Serb Republic has ended a $300 million loan agreement with a U.S.-based investment fund after the fund failed to provide financing by the end of 2015 as agreed, the regionals government said on Monday.
The agreement with the Global Bankcorp Commodities and Investments Inc. (GBCI) was signed in October. It made up for missing funds in the region’s 2015 budget after Bosnia failed to reach an agreement on a new loan from the International Monetary Fund and its previous loan agreement expired last June.
“Due to the problems the GBCI has had to secure the agreed financing, it was impossible for the government to withdraw the first tranche, so it decided to break the loan agreement,” finance ministry spokeswoman Vlatka Malidzan told Reuters.
Malidzan added that the government was open to continuing talks with the fund about a new loan deal this year. But some analysts said the government may have cancelled the GBCI deal after the region passed a 2016 budget and adopted a labour law.
Those were key conditions set by the IMF to continue talks on a new arrangement for Bosnia. Meeting the conditions means the region may be able to negotiate a new loan agreement with the IMF>
Opposition parties had criticised the GBCI deal as illegal because it had broken a legally imposed debt ceiling, but the government had said the loan would be withdrawn in tranches as needed. The first instalment of $50 million was due to have been withdrawn by Dec. 31, 2015.
An opposition party bloc has filed criminal charges against Finance Minister Zoran Tegeltija for signing a loan deal with GBCI without prior consent of parliament, in accordance with the law on debt. (Reporting by Gordana Katana, writing by Daria Sito-Sucic; Editing by Larry King)