Montenegro says deal on lifting Chinese debt burden is close
- The Balkan state borrowed nearly US$1 billion in 2014 to fund a project critics branded a ‘road to nowhere’
- Economy Minister Jakov Milatovic says the government is talking to US and European banks about easing the debt burden
Montenegro is weeks away from securing a deal to either swap or refinance with European and US banks nearly US$1 billion in debt owed to China, and hopes to reduce the interest rate on the debt to below 1 per cent, Economy Minister Jakov Milatovic said.
Prime Minister Zdravko Krivokapic, who came to power in December, is seeking to reduce the cost of the Chinese debt which has a 2 per cent interest rate and reduce currency risk as the loan is denominated in US dollars, Milatovic said.
“We are negotiating with a number of Western banks from Europe and the United States. We are for sure going to do it with the Western banks,” Milatovic said, adding that he was seeking an interest rate of “less than 1 per cent” for the debt.
“There are two options: the first is to refinance, the second is to swap the loan, or the third option is to do part of the first one and part of the second one,” he said. “We believe we can get much better terms — I am very optimistic about it.”
Milatovic declined to name the European or US banks but when asked how soon there could be a resolution, he said: “Soon – I think weeks.”