Provision of a sovereign loan to the Republic of Serbia to finance the construction of mid-mile fibre broadband infrastructure connecting around 600 rural schools in Serbia to the existing fibre backbone network.
The project will support the deployment of mid-mile fibre broadband that will connect existing fibre backbone to 600 schools in white zones (without access to broadband network) in rural areas in Serbia. The project is part of a larger initiative and represents the first of two phases, whereas the second phase targeting around 900 schools is planned for 2021/2022 as a separate project.
Due to geographic isolation and low population density, deploying broadband in white areas is not sufficiently profitable for any single operator. Mid-mile network rollout and provision of this network to telecom operators on a free-use rights basis will decrease the capex required for network expansion to households in rural areas, making targeted white zones more attractive for investment by operators. The Ministry of Trade, Tourism and Telecommunication (MoTT) as client and implementing agency aims to incentivise telecom operators to deploy last-mile broadband to households in white zones in rural areas, which are not targeted for network expansion by any operator in the next 3 years.
The project will address the shortage of digitally skilled labour, which Serbia is experiencing due to the recent rapid ICT sector growth and which now presents a serious handicap to private sector development. The project will also address the digital rural-urban divide, since the lack of broadband in rural areas reduces the capacity of a large portion of the country's population to fully participate in the modern economy.
The project is supported by the Western Balkans Investment Framework ("WBIF") with a Technical Cooperation ("TC") grant in the amount of EUR 1.7 mln for project preparation, whereas the EBRD acts as the lead IFI for this project.
The project is in line with the EBRD Country Strategy for Serbia (BDS/SB/17-1 /F), with the objective to improve the public governance and business climate through "support to new technologies and innovation, benefitting from digital switchover and broadband penetration", as well as with the ICT Sector Strategy (BDS14-052).
The project contributes towards the Bank's Economic Inclusion Strategy (BDS17-067) by opening up access to services that enhance economic opportunities for people in less-developed regions. The project is in line with the EU digital agenda, which supports transition into a digital economy, bringing faster economic growth, more jobs, and better services. The project is also in line with the Strategy for the Development of Broadband Networks and Services adopted by the Serbian government in 2014, and with the Strategy for the development of networks of new generations until 2023 from 2018. The project is in line with Strategy for Development of Information Society and Strategy for Development of Electronic Communications, which together make the Digital Agenda for Serbia.
ETI score: 65
The project will promote competitiveness by engaging in a competitiveness-focused policy dialogue initiative that is relevant in the country and sector context. By providing the mid-mile infrastructure, the MoTT incentivises operators to build the last-mile infrastructure, expanding the available market by connecting additional subscribers to the network and thereby improving the competitive environment for all operators. The project will also promote the inclusive quality through creating new economic opportunities for women/local population in less developed regions and by introducing new, replicable and accredited training programmes to equip young people/ women/ local population with higher skill levels.
The borrower is the Republic of Serbia represented by the Ministry of Finance. The client and executing agency is the Ministry of Trade, Tourism and Telecommunication.
EBRD Finance Summary
Total Project Cost
The EBRD investment is needed to close the public sector funding gap. Additionally, the Bank is a partner organisation under the WBIF acting as the lead IFI in the project. The WBIF blended approach is highly additional with grant support enabling the implementation of the project which would not be otherwise possible.
Environmental and Social Summary
Categorised B under the 2019 ESP and Low-medium risk. Key environmental & social (E&S) issues associated with the construction of a mid-mile fibre broadband infrastructure connecting around 600 rural schools in Serbia to consider include public safety, in particular of school children, traffic disturbance and other nuisances (air and noise pollution) during construction, contractor management, labour & OHS issues and stakeholder engagement and public information on the proposed works. E&S due diligence (ESDD) will be initiated by ESD to examine the MoTT's E&S risk management capacities to structure the project in line with EBRD PRs by initially reviewing the ESDD Questionnaire to be completed by the MoTT. If any shortcomings are identified, further examination will follow and an ESAP will be developed and agreed with the client. As a lead IFI for the project, ESD will review the TOR of the Consultant under the project preparation TC. The Project is expected to contribute to rural schools' access to internet and online educational contents.
Technical Cooperation and Grant Financing
The following Technical Co-operation assignments are envisaged as part of the Project:
- Technical due diligence;
- Environmental and Social due diligence.
The TC programme is subject to further amendments and confirmation. For consultant opportunities for projects financed by technical cooperation funds, visit procurement of consultants.
Company Contact Information
+ 381 11 2020 072
7 Pariska St. 11000 Belgrade, Serbia
PSD last updated
19 May 2020
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Independent Project Accountability Mechanism (IPAM)
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