Serbia

Cooperation with Serbia in the energy sector began in 2000 with the financing of assistance programmes to secure the electricity supply through imported electricity and the supply of spare parts for the rapid repair of power plants. Shortly afterwards, the rehabilitation of the first district heating systems in the largest cities began. Over time, the projects became much more ambitious: the district heating programme was extended in several phases to smaller towns and cities and, in terms of technology, biomass was also integrated as environmental impacts became increasingly important.

With regard to electricity generation, the promotion of renewable energies also moved into the foreground. In Serbia, KfW’s focus in this area is mainly on hydropower and wind power. To ensure that the transmission grids are equipped for the increased use of renewable energies, KfW also supports the construction of new transmission lines, thus promoting Serbia’s integration into the European grid system at the same time.

New projects for the energetic refurbishment of public buildings are also being implemented, including the region’s largest hospital in Belgrade. In addition, KfW is financing environmental credit lines which enable many MSMEs, private households and communities to invest in energy efficiency and renewable energies through the Serbian banking sector. Today the promotion of the energy sector is the most important pillar of German development cooperation in Serbia with a current commitment volume of over EUR 1.0 billion.

Project information - Energy (PDF, 95 KB, non-accessible)

Serbia: New building for packaging factory saves energy

In its electricity sector, the Western Balkan state is getting closer to the EU

Serbia's largest hospital is being modernised

Sustainable urban development is an important building block for making progress in the environmental sector. KfW supports the Serbian Government in the process of rapprochement with the European Union, particularly in the implementation of relevant EU directives pertaining to water, sanitation and waste management (especially Chapter 27 (Environment) of the conditions for EU membership). Urban development in Serbia also plays a special role with regard to achieving climate goals and systematic adjustment to climate change.

On behalf of the Federal Government, KfW is promoting sustainable and climate-friendly urban development in Serbia. Within the context of these activities, around 1.6 million inhabitants in over 30 towns have directly or indirectly benefited from the financing of supply infrastructure, efficient and environmentally sound water and sanitation systems as well as integrated and climate-friendly waste management. Institutional and financial reforms of municipal public utility corporations and the establishment of modern work processes are a prerequisite for investments and an essential component of the programmes. They thus promote good governance at the local level. Promoting basic infrastructure also secures supply services in the event of climate risks such as heavy rainfall or flooding, thus also serving to protect the population from climate risks.

The result for citizens is need-based, affordable, sustainable and modern basic infrastructure. Sustainable urban development makes an essential contribution to climate change mitigation, climate change adaptation and preserving biodiversity.

By supporting the financial sector, KfW contributes to the sustainable economic development of Serbia, creating and securing jobs. Funds from the Federal Ministry for Economic Cooperation and Development (BMZ), the EU and KfW’s own funds are combined to expand financial services and make them more accessible for micro, small and medium-sized enterprises (MSMEs). The focus here is on rural development, energy efficiency / renewable energies and, in future, also on the promotion of start-ups.

Despite the development of the Serbian banking sector in recent years, it is still difficult for many MSMEs in Serbia to obtain loans. This has been particularly true during the coronavirus pandemic and due to its economic impacts. The reasons for this include a lack of collateral, but also a lack of knowledge among borrowers. Accompanying measures are used to impart the necessary know-how for the successful use of the financial products and at the same time strengthen the capacities of the respective ministries (e.g. Ministry of Agriculture, Ministry of Energy). The aim is to ensure a sustainable source of credit for MSMEs during and after the coronavirus pandemic by providing loan guarantees for commercial banks.

In addition, KfW is investing in several funds to promote MSMEs and energy efficiency / renewable energies in Serbia. In cooperation with the Serbian government, KfW is also currently preparing the introduction of a start-up financing programme.