“Allocated Percentage” means a share equal to 34.75% of the loan support provided under this Loan Agreement, which the Borrower must transfer to the EWBJF.

“Borrower” means the Republic of Serbia.

“Business Day” means a day on which the TARGET2 payment system is open for business.

“Commission” means the European Commission.

“Confirmation Notice” means the Lender's written notice to the Borrower in the form of Annex 2 setting out the final terms of the Loan Instalment or, as the case may be, a tranche of the Loan Instalment.

“Cost Allocation Methodology” means the Commission Implementing Decision (EU, Euratom) 2024/1520 of 12 July 2024 establishing the framework for allocating costs related to borrowing and debt management operations under the diversified funding strategy5, as amended or replaced as the case may be.

“Conflict of Interests” in line with Article 61 of the Financial Regulation, means that the impartial and objective exercise of the functions of a person involved in the implementation of financial support under the Facility is compromised for reasons involving family, emotional life, political or national affinity, economic interest or any other direct or indirect personal interest. A conflict of interests includes situations that may objectively be perceived as a conflict of interests.

“Corruption” means corruption as defined in

Article 4

(2) of Directive (EU) 2017/1371 or active corruption within the meaning of Article 3 of the Convention on the fight against corruption involving officials of the European Communities or officials of Member States of the European Union, drawn up by the Council Act of 26 May 1997, or conduct referred to in

Article 2

(1) of Council Framework Decision 2003/568/JHA, or corruption as defined in other applicable laws .

“Cost of Carry” is the cost of carry as defined in the Cost Allocation Methodology.

“Cost of Funding” is the cost of funding as defined in the Cost Allocation Methodology.

“Cost of Liquidity Management” is the cost of liquidity management as defined in the Cost Allocation Methodology

“Commission Implementing Decision” means Commission Implementing Decision of 23 October 2024 under Article 15 of Regulation (EU) 2024/1449 on the approval of the Reform Agenda submitted by the Borrower.

“Contribution Arrangement” means the written agreement concluded between the Borrower and the EWBJF Fund Managers which sets out the amount committed by the Borrower to the EWBJF, the currency of such contribution, the manner in which payments thereof will be made to the Fund Account and may contain such other administrative matters as may be required and are permitted by the General Conditions, and will be substantiated in the form attached in Annex A to the General Conditions, as applicable. The Contribution Arrangement also serves as adherence to the EBWJF General Conditions.

“Disbursement” means a disbursement of a Pre-Financing Loan Instalment, Loan Instalment or Tranche to the Borrower under this Loan Agreement.

“Disbursement Date” means, in relation to the Disbursement, the date of transfer of the Net Disbursement Amount to the account indicated in

Article 8

of this Loan Agreement.

“Due Date” means any day on which a payment by the Borrower to the Lender is due under this Agreement, including any date indicated in the Confirmation Notice on which a payment of principal amount, Cost of Funding, Cost of Service, and Cost of Liquidity Management is to be made.

“Diversified Funding Strategy” means the Commission's funding strategy set out in Article 224 of the Financial Regulation and governed by the rules of Commission Implementing Decision 2023/2825.

“Early Reimbursement” means any voluntary early repayment, in total or in part, of the Loan Facility at the initiative of the Borrower.

“Early Repayment” means the early repayment of the Loan Facility requested by the Lender.

“EBRD” – means the European Bank of Reconstruction and Development.

“EIB” – means the European Investment Bank.

“Event of Default” means an event defined in

Article 13

(1) of this Loan Agreement.

“ECB” means the European Central Bank.

“EU” means the European Union.

“External Indebtedness” means all indebtedness of the Borrower (i) which is denominated or payable in a currency other than the lawful currency of the Borrower and (ii) which was not originally incurred or assumed under an agreement or instrument made with or issued to creditors substantially all of whom are residents of the Borrower or entities having their head office or principal place of business within the territory of the Borrower.

“EWBJF” means the European Western Balkans Joint Fund established under the Western Balkan Investment Framework for receiving donors’ contributions, in accordance with the EWBJF General Conditions lastly approved by Commission Decision C(2023)4806 of 19 July 20236.

“Facility” means the Reform and Growth Facility for the Western Balkans established by Regulation (EU) 2024/1449.

“Financial Regulation” means Regulation (EU, Euratom) 2024/2509 of the European Parliament and of the Council of 23 September 2024 on the financial rules applicable to the general budget of the Union.

“Fund Account” means the bank account, opened and maintained by the EBRD, to which contributions to the Fund will be transferred by the Borrower and out of which the EBRD shall disburse resources of the Fund, as required, in accordance with the EWBJF General Conditions”.

“Funding Instrument” means bond issues, notes, short-term bills or any other appropriate short and/or long-term financial transactions launched by the Commission on behalf of the Union under the Diversified Funding Strategy for the funding of the loan support requested by the Borrower.

“Facility Agreement” means the facility agreement concluded between the European Union, represented by the Commission, and the Borrower in accordance with Article 9 of Regulation (EU) 2024/1449.

“Fraud” means fraud within the meaning of Article 3 of Directive (EU) 2017/1371 of the European Parliament and of the Council and Article 1 of the Convention on the protection of the European Communities’ financial interests, drawn up by the Council Act of 26 July 1995.

“Fund Managers” means, in the context of the EWBJF, the EBRD and the EIB.

“EWBJF General conditions” means the set of provisions governing the administration of the EWBJF, establishing roles and responsibilities, composition, methods of work and decision-making systems of the EWBJF, as initially approved on 7 November 2006, and subsequently amended on 2 October 2009, 16 June 2016 and 6 September 2023, and which may be further amended as necessary by its governing entities.

“IMF” means the International Monetary Fund.

“IMF Arrangement” means any agreement, programme, facility or other financial arrangement between the Borrower and the IMF.

“Interest Payment Date” means any date on which interest is payable under the Loan Agreement.

“Interest Period” means the interest period as defined in the Cost Allocation Methodology.

“Legal Opinion” means the legal opinion issued by the Ministry of Justice of the Borrower in the form set out in Annex 3.

“Lender” means the European Union.

“Loan Agreement” means this loan agreement.

“Loan Facility” means the loan support that the Commission makes available to the Borrower under this Loan Agreement and in accordance with the Commission Implementing Decision.

“Market Disruption Event” means, at the time of a proposed issuance of Funding Instruments, the occurrence of events or circumstances affecting the national or international financial, political or economic conditions or international capital markets or currency exchange rates or exchange controls which in the reasonable view of the Lender - are likely to prejudice materially the ability of the Lender to achieve a successful issue, offering or distribution of Funding Instruments at a reasonable price.

“Maturity Date” means the scheduled date for full repayment of principal of the Loan Instalment or Tranche as defined in a Confirmation Notice.

“Net Disbursement Amount” means the proceeds of the Funding Instrument less the aggregate amount of clearing of the pre-financing according to

Article 6

of this Loan Agreement in relation to any Disbursement, resulting in an amount to be disbursed to the Borrower.

“Pre-financing Loan Instalment” means the part of Loan Facility to be disbursed as pre-financing indicated in

Article 6

of this Loan Agreement.

“Reform Agenda” means the Reform Agenda for the Borrower or amendment thereto assessed by the Commission and approved through the adoption of the Commission Implementing Decision.

“Request for Payment” means the Borrower’s request for the payment of Loan Instalments in the form of Annex 1(a) or Annex 1(b).

“TARGET2” means the Trans-European Automated Real-time Gross Settlement Express Transfer payment system which uses a single shared platform, and which was launched on 19 November 2007.

“Tax” means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).

“Tranche” means a part of the Pre-Financing Loan Instalment or of a Loan Instalment.

“WBIF” means the Western Balkans Investment Framework (WBIF), a joint initiative of the EU, financial institutions, bilateral donors and beneficiaries, aimed at enhancing harmonisation and cooperation in investments for the socio-economic development of the region and contributing to the European perspective of the Western Balkans, as referred to in Article 12 of Regulation (EU) 2021/15297.