World Bank approves €340 million for Serbia's Corridor 10

The board of the International Bank for Reconstruction and Development, part of the World Bank Group, on 27 May approved a €340 million loan to the Republic of Serbia (around 39.9 billion RSD at the NBS reference rate). The funds will finance the rehabilitation and upgrade of the Nis-Presevo section of Corridor 10.

Loan terms:

• Maturity: 30 years
• Grace period on principal: 6 years
• Fixed interest rate: 3.85 percent

Total project value is estimated at €487 million. The remaining €147 million will be covered by the Serbian budget and the EBRD through a parallel €95 million loan.

Scope of Corridor 10 works

The project covers reconstruction of 178 kilometres of railway line between Nis and Presevo.

Main components:

• Electrification of the remaining 102 kilometres of the section
• Four new railway stations in Vranje, Bujanovac and Bosilegrad
• Reconstruction of 14 bridges
• A new ETCS Level 2 traffic control system with a centre in Nis

Completion is scheduled by 31 December 2031, in line with the deadline for aligning Serbian railway infrastructure with TEN-T Corridor X standards.

Economic case for the project

The World Bank’s country representative for Serbia, Seker Esener, set out the project’s economic parameters in a 27 May statement after meeting Finance Minister Sinisa Mali.

The Corridor 10 project has an estimated internal rate of return of 8.4 percent and the potential to raise Serbia’s GDP by 0.5 to 0.9 percentage points in the 2027-2032 period, through effects on logistics, goods exports and reduced travel time between the north and south of the country.

Esener placed the loan in a wider portfolio context.

The largest single World Bank intervention in Serbian infrastructure in the past decade, and part of a €1.82 billion portfolio of active World Bank projects in the Republic of Serbia.

Finance Ministry insights, presented on 27 May by State Secretary Stevan Glisic, point to concrete operational effects.

Key projections:

• Rail travel time Nis-Presevo cut from 3 hours 40 minutes to 1 hour 50 minutes
• Freight capacity up from 9.2 million tonnes to 18.4 million tonnes annually
• Annual road freight cost savings: €142 million
• CO2 emission reduction: 287,000 tonnes per year

Works begin July 2026, phased schedule

Serbian Railways will publish the tender for the first works package, the 78-kilometre Nis-Vranje section, by 6 June. Bid submission deadline is 18 July.

Expected bidders:

• Strabag
• Porr
• Alstom Transport
• Cengiz Insaat

The second package, the 100-kilometre Vranje-Presevo section, will be tendered in September 2026. The third phase, electrification and ETCS, will start in the first half of 2027.

Construction Minister Goran Vesic spoke on 27 May to RTS on the financial dimension.

The Corridor 10 project is the biggest test of Serbian Railways’ capacity to absorb simultaneous credit obligations to multiple financial institutions, which requires the transition to a new accounting system for tracking transactions, operational from 1 July 2026.

Vesic confirmed the fiscal position.

The Republic of Serbia is fully prepared for the financial commitment to the World Bank, which in real terms builds on, but does not breach, the targeted public debt trajectory of 41 to 42 percent of GDP by the end of 2026.

Is the project funded against frozen EU tranches

The open question is whether the project is sufficiently covered in the Serbian government’s financial plan, should the frozen second and third tranches of the EU Growth Plan fail to be unlocked by 31 December.

A follow-up analysis of multi-year budget assumptions will be published shortly.