Thewesternbalkans.
The Government of Serbia has adopted a proposed law confirming the Agreement on a credit arrangement between the Republic of Serbia and a group of French and European financial institutions, with the aim of financing the purchase of 12 Rafal multi-purpose combat aircraft.
The value of the Commercial Agreement with Dassault Aviation is EUR 2,745,000,000, and for the financing of this project, Serbia has secured a loan in the maximum amount of EUR 1,921,500,000, which will be paid through direct payments to the seller – the French company Dassault Aviation – for the goods and services provided for in the contract. The remaining amount is covered by advance payments from budget funds.
The credit arrangement was concluded with the banks Bred Banque Populaire, Credit Agricole Corporate and Investment Bank, Credit Industriel et Commercial, Credit Lyonnais, Natixis and Societe Generale, which act as authorized lead arrangers, while Natixis has the additional role of global coordination, structuring and documentation, as well as ESA Agent.
The loan is structured with the application of a variable interest rate based on the six-month EURIBOR, increased by a fixed margin of 0.98% per annum. The deadline for the availability of funds is 57 months from the date of signing the contract, while the repayment of the loan will last seven years, in 14 half-yearly installments.
The contract includes the training of pilot and technical personnel, as well as the purchase of additional equipment, and the Ministry of Defense will be responsible for the implementation of the entire package.
According to the Law on the Budget of the Republic of Serbia for 2025, loans of up to 2.3 billion euros are foreseen for projects of national importance, including under this agreement.
Comment: The purchase of Rafale aircraft is part of a broader strategy to modernize the Serbian Armed Forces and strengthen the capabilities of the Air Force and air defense. Possession of these aircraft is expected to significantly contribute to improving the ability to control and protect airspace, project military power and deter potential threats. In addition, the agreement opens up opportunities for industrial cooperation with French companies in the field of advanced technologies, including the production of components and systems for the aerospace industry.
The geopolitical significance of the deal is in opposition to military-technical cooperation with Russia.
Critics of the agreement in Serbia point out that the Rafale airplanes that Serbia will receive will not be able to be used against Croatia or Kosovo, as they are blocked against NATO targets. The variable interest rate and high price of the aircraft (the Russian Sukhoi and MiG are three times cheaper) are also criticized. The recent unsatisfactory performance of the Indian Rafales, which were hit by Chinese air defense systems in Pakistan, is also recalled.
However, the loan agreement puts Serbia in a better position compared to neighboring Bulgaria, which six years ago paid in advance for 8 American F-16 Block 70 and only recently received only one aircraft, which, however, is currently unable to fly due to a technical defec
