Serbia has clearly defined decarbonisation goals in the energy sector, and, with the support of international partners, can also advance in other sectors, says Alessandro Bragonzi, outgoing Head of Regional Representation for the Western Balkans at the European Investment Bank.
I believe that Serbia’s path to decarbonisation is driven by laudable ambitions, with concrete measures adopted so far in the energy sector, such as the Integrated National Energy and Climate Plan, amendments to the Law on Energy, and the Renewable Energy Law, as well as strategies for low-carbon development and renovations of public buildings. In 2023, the country successfully launched and awarded its first Contracts for Difference auction for renewable energy production from wind (400 MW) and solar (50 MW) and is now gearing up for its second auction,” explains the departing EIB boss for our region.
Bragonzi believes that, with financial and technical support provided by the European Commission and the EIB, Serbia is gradually advancing by strengthening its multimodal mobility with strategic investments in rail networks, smart urban mobility and waterborne transport, all of which are providing more sustainable alternatives to highly polluting road transportation.
How does the EIB support Serbia’s green transition; and what do you consider as best practices established in the country?
— As the EU climate bank, the EIB has committed to substantially increasing its lending for the green transition and environmentally sustainable projects, not only within EU member states, but across the world. In Serbia, our decades-long support has ranged from large-scale infrastructure projects to credit lines supporting private companies – particularly small and medium-sized enterprises– via partner commercial banks and national institutions, as well as advisory support for public entities.
We are at Serbia’s disposal to help on the implementation of important projects that contribute to decarbonisation, improving digital literacy and strengthening economic development and integration into the EU market
More recently, by signing an €80 million loan agreement, we began financing the installation of about 400,000 new advanced electricity meters for Serbia’s public distribution company (EDS) and its users, as part of a wider electricity grid modernisation programme. These new and more sophisticated meters will help reduce electricity losses, enhance collection rates and better integrate the increasing volumes of renewable energy sources into the electricity distribution network. Over the longer term, this project will enable Serbian households to accurately monitor and optimise their energy consumption.
In June, we approved another €200 million loan to improve capacities for renewable energy production at Electric Power Industry of Serbia (EPS), particularly the rehabilitation of existing hydropower plants, which will help balance more intermittent energy sources, like wind and solar, in the electrical power system.
How do you see progress in this area in Serbia, and how does the EIB support such initiatives?
The European Union plans to tackle its current skills gap – a critical step in ensuring the success of the digital and green transitions. Around 42% of Europeans lack basic digital skills, while 18 million people will need to be reskilled in order for Europe to reach its climate goals (according to the World Economic Forum).
The skills mismatch, massive worker migration, lack of qualified workers and youth unemployment are key challenges for the Western Balkans’ labour markets. In addition, the Regional Cooperation Council estimates that over half of the productive potential of women aged 15 to 64 remains untapped by the economies of the region.
Serbia has rolled out several clear and well-targeted initiatives to tackle digital and educational gaps. For example, the Connected Schools project (supported by a €70 million EIB loan) managed to cover 3,800 schools, equipping them with high-speed internet access. The project aims to foster digitalisation among young people and develop a more digitalised economy.
You are implementing large-scale projects in sustainability and energy transition that support the region’s EU accession. How effectively are we utilising these funds in Serbia?
— We are supporting the development of large-scale renewable energy projects in the region, such as the construction of wind farms in Bosnia and Herzegovina, a solar photovoltaic plant near Pristina, and the improvement of the electricity grid in Serbia. Beyond energy, the EIB is also contributing to the gradual shift to cleaner transportation options with the rehabilitation of the Belgrade-Niš section on railway Corridor X and the improvement of waterway navigation along the Danube and Sava rivers, alongside new projects in the sustainable transportation and environmental protection sectors across the Western Balkans as a whole.
The absorption of funds by Serbia so far is deemed satisfactory and the country has started integrating sustainability and climate goals into its development strategy.
How does the EIB plan to support Serbia’s plans regarding Expo 2027?
— EIB financial activities and objectives are aligned with the European Union’s policy for the region. We work closely with the European Commission and other partner international financial institutions under a financial instrument called the Western Balkans Investment Framework (WBIF), which helps accelerate project preparation and the provision of the most favourable financial arrangements.
The EIB stands with Serbia and its people in helping them tap the opportunities presented within the scope of the Growth Plan for the Western Balkans
In doing this, we strive to align ourselves with national priorities in terms of strategic investments with a long-term positive social, economic and environmental impact. While we have not been involved in financing Expo 2027 projects, we are confident that EIB investments in infrastructure, energy, science and technology will have a positive spillover effect on those projects.
What do you consider as the most important steps for Serbia to fully leverage the opportunities provided by the European Union’s Growth Plan for the Western Balkans?
— The Growth Plan has the potential to accelerate the EU accession process and spur economic growth, while also promoting the creation of a common regional market. The aim is to facilitate the gradual opening of certain areas of the EU single market to regional economies in order to enable the free movement of goods, services, people and capital.
The EIB stands with Serbia and its people in helping them tap the opportunities presented by the Growth Plan. With a view to releasing the plan’s funds, the European Commission will check whether progress is being achieved and the results set out in the Reform Agenda are being met. It will also monitor other parameters, such as macro-financial stability, sound public financial management and transparency.
The European Commission also recently adopted a new €1.2 billion financial package under the Economic and Investment Plan, including €300 million in EU grants for sustainable transportation, environmental protection and SME projects in the Western Balkans. We look forward to deploying these funds, together with our partners, to help the region attain higher prosperity and improved living conditions for its people.
| CHALLENGES The skills mismatch, massive worker migration, lack of qualified workers and youth unemployment are key challenges for the Western Balkans’ labour markets | SUCCESS The absorption of EIB funds by Serbia so far is deemed satisfactory and we’re glad that the country has started integrating sustainability and climate goals into its development strategy |
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