Serbia's infrastructure ministry said on Tuesday it has signed an agreement with the Export-Import Bank of China for a loan worth $297.6 million (269.2 million euro) for the overhaul of the Stara Pazova-Belgrade section of the railway connecting Serbia's capital to Budapest in Hungary.
The loan will be repaid in 20 years, including a five-year grace period, and the reconstruction works will begin this year, the Serbian infrastructure ministry said in a statement.
"The high-speed railway from Belgrade to Budapest is the most important project of the "One Belt, One Road" initiative, because it is located on the main route from Greece's Piraeus port to central Europe," infrastructure minister Zorana Mihajlovic
said on the sidelines of the official loan-signing ceremony, as quoted in the statement.
The railway line is of strategic importance for Serbia, as it will become the fastest route for exports to EU countries, Mihajlovic said after the loan deal was signed in the presence of China's prime minister Li Keqiang and Serbian counterpart Aleksandar Vucic.
Serbian citizens will travel from Belgrade to Novi Sad in less than an hour when the project is completed, Mihajlovic added.
China, Serbia and Hungary signed a memorandum of understanding for the reconstruction of the 370 km rail route in December 2014.