The European Bank for Reconstruction and Development (EBRD) is intensifying its efforts to help Serbia overcome the damage caused by the floods in May this year. The Bank presented a new range of financial support programmes at a donor conference hosted by the European Union (EU) in Brussels today, where the official flood damage assessment report was also unveiled.
Devastating floods hit the Balkans in May 2014 causing loss of life and forcing thousands to leave their homes across the region. According to the Serbia Recovery Needs Assessment report compiled by the Serbian government with support from the EU, the World Bank and the United Nations, the official damage to the Serbian economy is now estimated at €1.5 billion. The energy and agriculture sectors are among the worst affected, with continuing power shortages and more than 12,000 hectares of land remaining out of use.
In a move designed to help Serbia accelerate its recovery, the EBRD is prepared to extend and reallocate funding to public and private sectors:
- Up to €300 million can be made available to the public sector for repairs, subject to request by the authorities and approval by the EBRD.
- In addition, up to €100 million of financing for small and medium-sized municipalities will be available from the Municipal Infrastructure Development Fund. Resources from this EBRD co-financed fund can be used to help rehabilitate municipal infrastructure in areas affected by the floods.
- In the private sector, the EBRD will use regional funding facilities, including the Local Enterprise Facility (LEF), the Enterprise Expansion Fund (ENEF) and the recently launched Western Balkans and Croatia Finance Framework IV (WBFF IV) to extend support to local businesses directly or through local partner banks.
- Under the WBFF IV €50 million have already been extended to UniCredit Bank Serbia in two facilities – mortgage loans and credit lines for small and medium-sized firms.
- Both loans can be used to finance projects in flood-affected areas.
- Separately, the EBRD is working on new facilities that target strategic sectors.
As a long term objective, the EBRD is considering investing in flood prevention measures on a regional basis, as potential projects, in cooperation with other international financial institutions (IFIs) and donors.
Overall, the EBRD will align its activities with the priorities set out in the country strategy for Serbia and coordinate its efforts with other IFIs and the government. The funds, and in particular the credit lines, will not only help flood victims but will also support the country’s wider economic recovery.
Since the start of its work in Serbia, the EBRD has invested more than €3.5 billion in over 175 projects. The Bank invests in the financial sector, industry, commerce, agribusiness, energy and infrastructure.