Provision of a EUR 100 million sovereign loan facility to the Republic of Serbia to finance the construction of mid-mile and last mile fibre broadband infrastructure connecting up to 1,600 rural schools/ public institutions in Serbia to the existing fibre backbone network.
The Project will support deployment of mid-mile and last-mile broadband internet infrastructure that will connect existing fibre backbone to up to 1,600 schools/ public institutions in white zones (without access to broadband network), in rural areas in Serbia. The Project is part of a larger initiative and represents the continuation of the first project (Rural Broadband Rollout, OpID 51835), signed on 30 December 2020, which targeted 600 schools/ public institutions.
Due to geographic isolation and low population density, deploying broadband in white areas is not sufficiently profitable for any single operator. Mid-mile rollout and provision to telecom operators on 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 incentivize 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 recent rapid ICT sector growth, and which now presents a serious hindrance 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 in line with the EBRD Country Strategy for Serbia (BDS/SB/17-1 /F), with objective to improve 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) by "promoting competitive network expansion and access to communications and information to more citizens, through broadband penetration to more distant places".
ETI score: 69
The Project will promote competitiveness with the Bank engaging in a competitiveness-focused policy dialogue initiative that is relevant in the country and sector context. On one hand, by providing the mid-mile infrastructure, MoTT incentivizes the operators to build the last-mile infrastructure, and on the other hand by providing both mid-mile and last-mile infrastructure to heavy rural areas, the MoTT effectively expands the available market by connecting additional subscribers to the network and thereby improving the competitive environment for all operators.
The Project will also promote 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
EBRD investment is needed to close the public sector funding gap. At the same time, EBRD does not crowd out other sources, such as from IFIs, government, commercial banks and/or complements them.
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 up to 1,600 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.
This is the Phase 2 of a previous project, so E&S due diligence (ESDD) initially will be carried out internally in line with ESD ESDD response to COVID-19 by reviewing client's AESRs and previous ESAP implementation to examine further the MoTT's E&S risk management capacities and compliance with EBRD PRs. If any shortcomings are identified, further examination will follow and an ESAP will be updated and agreed with the client. ESD will review the TOR of the Consultant under the project preparation TC.
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
25 Aug 2021
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Independent Project Accountability Mechanism (IPAM)
If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).
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