Serbian Climate Resilience & Irrigation Project (SCRIP)

Location:

Serbia

Project number:

50848

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Target board date:

27 Nov 2019

Status:

Concept Reviewed

PSD disclosed:

24 Jul 2019

Translated version of this PSD: Serbian

Project Description

The provision of a sovereign loan of up to EUR 15 million to the Republic of Serbia to finance priority irrigation infrastructure in Serbia. The proceeds of the loan will finance construction/rehabilitation of primary irrigation infrastructure in central Serbia (Negotin and Svilajnac regions) and the rehabilitation of two accumulation lakes in Vojvodina (the "Project"), as well as support in Project implementation and supervision of works.

Project Objectives

Contribution to upgrade the country's water and irrigation infrastructure to increase Serbia's resilience to climate change risks, as Serbia's vulnerability to climate change is expected to increase (according to recent estimates, 30 per cent of the total country area and 52 per cent of agricultural land is vulnerable to rainwater related flooding or water logging). Additionally, the rehabilitation of Serbia's aged irrigation and water infrastructure is expected to contribute to water and energy savings.

The Project will be implemented by a Project Implementation Unit composed of representatives of the Ministry of Agriculture, Forestry and Water Management of the Republic of Serbia (MAFWM), the Provincial Secretariat of Agriculture, Forestry and Water Management, Public Water Management Companies "Vode Vojvodine" and "Srbijavode", and managed by the Water Management Directorate of MAFWM.

Transition Impact

Moderate Good

The transition impact of the project is expected to be focused on increasing resource efficiency and climate resilience, as well as on improving competitiveness of the sector.

1. Improved resource efficiency and climate resilience

The Project is expected to reduce Serbia's vulnerability to the impact of climate change risks. Serbia is facing continuing temperature increases and more frequent and prolonged drought. Additionally, its outdated and inefficient water supply system is amajor barrier to efficiency and sustainability of irrigation system. Upgrading the irrigation system will contribute to increase the efficient use of valuable resources as well as enhance the country's climate resilience.

2. Enhanced competitiveness

Upgrade of the irrigation system is expected to contribute to more productive farming in order to meet requirements of higher productivity and sustainable crop farming while maintaining environmental sustainability.

Client Information

SERBIA SOVEREIGN

Government of Serbia, represented by MAFWM as the body responsible for agriculture and water management.

EBRD Finance Summary

EUR 15,000,000.00
A sovereign loan of up to EUR 15 million.

Total Project Cost

EUR 15,000,000.00

Environmental and Social Summary

Categorised B under the 2014 ESP. Key Environmental and Social (E&S) impacts associated with new and rehabilitated irrigation systems include sustainable water use, potential land acquisition/access issues, biodiversity and any impacts from associated facilities in addition to general construction related risks. The Borrower's level of influence over downstream issues such as water quality and responsible use of pesticides and fertilisers will be investigated. E&S due diligence will be undertaken by a consultant and will include a site visit and an Environmental and Social Action Plan will be developed based on the findings.

Technical Cooperation

The Project will benefit from the following TC of up to EUR 1.2 million

  • EBRD-FAO Framework agreement - Irrigation and Drainage improvements (USD 44,000, financed at 70 per cent by the EBRD Shareholders Special Fund (SSF) and 30 per cent by the FAO). Key objectives of the assignment were identification of the country's investment needs in irrigation and drainage infrastructure, understanding of national capacity to implement irrigation and drainage projects, and definition of priority areas for irrigation and drainage investment. The assignment was implemented by FAO.
     
  • Technical, financial, environmental and social due diligence (EUR 323,126 financed by the Government of Austria). The assignment includes a review of technical designs and the present and planned irrigated agricultural activities in the Project areas, environmental and social audit of the facilities to be financed from an EBRD loan, climate risk analysis, assessment of the economic, social, environmental water-/energy-efficiency and climate resilience benefits of the Project.
     
  • Preparation of the Irrigation Strategy for Serbia (estimated at EUR 600,000-800,000 expected to be financed by a bilateral or multilateral donor and implemented by FAO). The assignment will result in development and adoption of a national strategy on irrigation, including the Action Plan for implementation of the Strategy and methodology for prioritisation of investments and financing strategy.

Business opportunities

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