Provision of a sovereign loan of up to EUR 30 million to the Republic of Serbia (the "Client") to finance investments in Renewable District Energy ("ReDE") in several District Heating Companies ("DHCs") across the country (the "Project").
The Project will support integration of solar-thermal, heat pump, waste heat and geothermal technologies in existing district heating ("DH") systems in several small- and medium-sized municipalities. The sub-projects were assessed and selected through the Renewable District Energy in the Western Balkans Programme ("ReDEWeB") established by the EBRD in 2019. ReDEWeB was set up in partnership with the Government of Austria to incentivise reforms and create an enabling environment for financing ReDE investments in the Western Balkans.
The Project is expected to be co-financed by investment and technical assistance grants from the Swiss State Secretariat for Economic Affairs ("SECO") and the European Union under the Regional Energy Efficiency Programme ("REEP").
DH systems in Serbia depend almost exclusively on fossil fuels. The Project aims to support decarbonisation of the DH systems by introducing at least 142 GWh of produced renewable heat. This is expected to provide significant environmental benefits and contribute to energy security. Most of the ReDE technologies envisaged under the Project will be applied for the first time in South-Eastern Europe. In addition, the Project is accompanied by an ambitious policy dialogue package related to further DH sector development, including the development of a regulatory framework to stimulate further investments in ReDE generation.
ETI score: 80
Primary quality: Green
The expected transition impact of the Project is derived from Green quality through vast environmental benefits arising from carbon emission reduction of c. 25,000 tCO2e p.a. As a result of the Project, total heat generation from renewable sources in Serbia is expected to triple from 0.8 per cent to c. 2.9 per cent. The Project will also involve significant policy dialogue related to development of the DH sector in the country.
The Borrower is the Republic of Serbia represented by the Ministry of Finance. The Project will be implemented by the Ministry of Mining and Energy ("MoME").
EBRD Finance Summary
A sovereign loan in an amount of up to EUR 30 million.
Total Project Cost
Total Project Cost of up to EUR 37.5 million is expected to be financed as follows:
- EBRD loan financing - up to EUR 30 million;
- Investment grants from SECO and EU REEP - up to EUR 7.5 million.
Financing structure: The EBRD offers financing that is not available in the market from commercial sources on reasonable terms and conditions.
Risk mitigation: EBRD helps the client to mitigate carbon transition risks and take climate action, such as to move along a low carbon transition pathway.
Standard-setting: helping projects and clients achieve higher standards: The client seeks/makes use of EBRD expertise on best international procurement standards and higher environmental standards.
Knowledge, innovation, and capacity building: EBRD provides expertise, innovation, knowledge and/or capabilities that are material to the timely realisation of the project's objectives, including support to strengthen the capacity of the client.
Environmental and Social Summary
Categorised B (2019 ESP). Key Environmental and Social (E&S) risks and impacts associated with construction and operation of renewable energy based DH projects in a dozen of municipalities in Serbia will depend on the source of energy and project location, and include potential land acquisition, OHS procedures for contractors, labour management, community safety, disruptions to supply of heat and hot water to the community and public access, air emissions, landscape/visual, and stakeholder engagement. E&S due diligence will be undertaken by an independent consultant and will include a site visit to proposed project locations, a review of the E&S impacts of the technology/design selected, an assessment of the MoME and DHCs' capacity and management systems, and the preparation of an Environmental and Social Action Plan (ESAP) and Stakeholder Engagement Plan (SEP). Additional TC support for ESAP implementation will be required. The Project is considered Paris-aligned for climate mitigation as it features in the joint MDB "aligned list" and no further assessment is required. Once the project locations are defined, the due diligence will include an assessment to determine if the project is Paris aligned for climate adaptation.
Technical Cooperation and Grant Financing
- TC1: Rapid assessment study. The TC supported high level technical and financial appraisal of various project opportunities in several municipalities and prioritised the needs for policy interventions. (completed)
- TC2: Support for Project Preparation. The TC will support MoME in coordination of DHCs/ municipalities, review of the consultancy reports, work on policy initiatives, etc.
- TC3: Technical, Financial, Environmental and Social Due Diligence.
- TC4: Project Implementation Unit (the "PIU") and Tendering Support.
- TC5: Policy dialogue support. The TC will support policy dialogue on further DH sector development in Serbia.
Company Contact Information
(+381) 11 3346 755
Ministry of Mining and Energy, Nemanjina 22-26, 11000 Belgrade
PSD last updated
22 Sep 2022
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Environmental and Social Policy (ESP)
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More information on the EBRD’s practices in this regard is set out in the ESP.
Integrity and Compliance
The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.
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Access to Information Policy (AIP)
The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.
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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).
IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.
Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM via email firstname.lastname@example.org to get guidance and more information on IPAM and how to submit a request.