Dimitrieska-Kochoska: The first investment cycle of the British loan will be 2.2 billion euros and will last five years

The railway infrastructure and investment in healthcare, in the amount of about 2.2 billion euros, are two reliable projects of the six billion euros of financial framework with the United Kingdom, Finance Minister Gordana Dimitrieska-Kochoska says.

In 360 degrees, she says that as a government they are very careful in that part. We do not go, he emphasizes, suddenly and optimistic in the realization of all six billion given that the country should have projects that are mature and be able to be implemented.

-The first cycle involves for about five years. That means that two billion in five years are 400 million euros. So much is the annual increase in public debt to these investments that, on the other hand, will contribute to the growth of the economy because you, say, have activated several Macedonian companies that will work, etc. So the added value will be higher- the minister said.

Asked why the hospitals in Stip and Kicevo are now mentioned with new sources of funding when they are already part of this year’s budget, the minister responded that this question is partial to the claim that public debt will not grow as others calculate.

-We have been budgeted because we have predicted that we will talk to other international financial institutions that will support these investments. At the moment, these negotiations with the British government, we put as a package and the opportunity to use the funds from there and invest in these two budgeted hospitals. Now, we have to emphasize one more thing. Increasing debt will go stage. Every year we are dragging out of those funds, so will we increase the debt. Returning the loans will be after a certain period. At this point I do not want to give the most accurate answer because we are still in negotiations. We are waiting for the memorandum of cooperation first and see how things will go. Let’s say it’s about project funding. Finally, as a state, let’s start behaving as every European state behaves. You have a specific project. Here people who used loans, bankers can understand me very well, we have an investment that we know what the performance period is. At that time we do not return anything. That’s the grace period we are talking about. Then, the repayment period will follow. What will be the repayment period will show a feasibility study-Minister Dimitrievska-Kochoska.

The selection of companies from the United Kingdom to build the fast railroad from Tabanovce to Gevgelija and several hospitals, according to her, will be based on the Law on Public Procurement, which has clear provisions that are taking place in such agreements « Government with the Government ». That, she adds, means that there will be not only one, but more offers.

-There are true, the member defines that there must be offers, more offers. It cannot be just one, you need to be a few offers, to choose the most favorable. And it is not that only British companies will be and that Macedonian companies will not be hired. It is too early to refine all these things, the Prime Minister clearly told a news conference that there will be Macedonian companies. It is true that some will be British companies that will hire subcontractors. I said there must be more offers, it can’t be just one offer and you will choose the most favorable. This is not something unknown- said Dimitrijeska-Kochoska.

The finance minister says we cannot go and negotiate with a company, but that the Law on Public Procurement is clear that does not exclude such agreements « Government with the Government ». He claims that the contracts will be public.

-We will drag the money as we realize. For five years we will withdraw funds how – they have built one part, billing, using bank funds, we pay. And it will last for five years, at least so it was initially announced. Therefore, I say, not to mention in advance, to refine things. We will have a grace period, that is the performance period. The repayment period when we start repaying the funds is when the railroad begins to generate revenue- the minister adds.

Advance payment, he emphasizes, will not. The first invoice should be in 2027. She emphasized that this is different from the issuance of a Eurobond.

-Creation of Eurobond does not mean project funding. When we have huge projects that will mean added value to future generations, you need to share that cost with future generations. You cannot carry the whole load. So the situation with Corridor 8 and 10D. In 2023 there was the highest transfer of 14.5 billion denars to Bechtel and Enka or 230 million euros. That same year, 2023 a Eurobond was issued with 7 % interest rate. Is that okay. We say we go with project funding, which will be cheaper than these 7 percent, which will be prioritized to invest in the years, not to pay and not repay- said Dimitrijeska-Kochoska.

Regarding the impact on public debt, he said that when investing at the same time there is GDP growth.

-We cannot expect to have borrowing, and to have no GDP growth, and have bad percent or increased public debt. It could have been wasted in the past, when we had situations unproductively and we had situations to make a variety of transfers to certain public enterprises and joint stock companies, the minister said.