Chinese consortium seals highway deal with Bosnia's Serb Republic

China Construction Bank Corp logo is seen on its headquarters in Beijing
China Construction Bank Corp (CCB) logo is seen on its headquarters in Beijing, China, March 31, 2016. REUTERS/Kim Kyung-Hoon/File Photo

SARAJEVO, Feb 23 (Reuters) - A consortium of Chinese companies and the government of Bosnia's autonomous Serb Republic on Thursday sealed a 350 million marka ($190.5 million) loan deal for the construction of a section of a northern highway connecting the region with Serbia.

China Overseas Engineering Group Co Ltd. and China Tiesiju Civil Engineering Group Co Ltd., with help of the China Construction Bank, will plan, build and finance the 17-kilometre-long Brcko-Bijeljina section, Serb Republic Prime Minister Radovan Viskovic said at the signing ceremony.

"This is a big day for Republika Srpska," Viskovic said.

The Serb Republic wants to build a modern highway connecting most of its territory with Serbia, its political ally and largest trade partner.

It turned to Chinese investors after the European Bank for Reconstruction and Development (EBRD) declined to support the project, which it said was not vital.

The 15-year loan will have a three-year grace period and a five-year guarantee, said Viskovic, who declined to provide details of the loan, saying it was up to the Chinese partners.

He said the funding for the section of highway, planned to connect the region's main town of Banja Luka with the Serbian capital Belgrade, did not include VAT.

In August, the regional government signed a 650 million marka deal with China State Construction Engineering Corp. Ltd. (601668.SS) to build a 33-kilometre-long section of the same highway in northern Bosnia.

Reporting by Daria Sito-Sucic; Editing by Alexander Smith

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