Chinese firm secures new contracts in Republika Srpska, entity borrows €500m

The deals were confirmed on Tuesday by Radovan Viskovic, head of the Republika Srpska motorways company Autoputevi RS, who signed a contract with a COVEC representative in Banja Luka for the construction of a 17-kilometre stretch of motorway between Brcko and Bijeljina.

The section forms part of a motorway the Republika Srpska authorities aim to use to link Banja Luka with neighbouring Serbia and its capital Belgrade. The Brcko–Bijeljina segment is expected to cost around €163 million. A separate contract, signed seven days earlier, covers construction of a section between Vukosavlje near Orasje and Brcko, valued at just under €390 million.

"We are very grateful to the Chinese government for all the projects it is carrying out in Republika Srpska," Viskovic said after the signing.

Li Gang, a COVEC executive, confirmed the Republika Srpska authorities would borrow from Chinese banks and said China intended to maintain its presence in BiH through such projects. "Today is an important day, as Autoputevi RS and Chinese banks are signing the loan agreement, meaning the project will soon enter the implementation phase," Li said. "In the future, we will continue to demonstrate responsibility, build infrastructure and contribute to the prosperity and economic development of the people of Republika Srpska."

According to data from BiH's Foreign Investment Promotion Agency, Chinese investments in the country exceed $3 billion. About $2.5 billion of that total consists of credit arrangements directly backed by the Chinese government through state-linked banks. Investment levels are significantly higher in Republika Srpska than in the Bosniak-Croat shared Federation (FBiH) entity, and Chinese firms maintain particularly close ties with the authorities in Banja Luka.

Analysts have raised concerns about Chinese loans, which are often agreed under terms not accessible to the public. In cases of default, they warn, state infrastructure assets can even pass into the ownership of Chinese creditors.