The European Bank for Reconstruction and Development (EBRD) has announced that it is providing a loan to Serbia of up to EUR 30 million to finance investments in renewable heat generation in several district heating companies in the country, along with related energy-efficiency measures including the modernization of heat substations and district heating networks.
The project will be supported by donor-funded assistance of up to EUR 12 million mobilized by the EBRD from the Swiss State Secretariat for Economic Affairs, the European Union under the Regional Energy Efficiency Programme, and the government of Austria through the Renewable District Energy in the Western Balkans Programme.
It will be implemented by the Ministry of Mining and Energy, in cooperation with the participating municipalities and district heating companies.
Removing dependency on fossil fuels and energy security are important questions in the current climate both in terms of environmental protection and geopolitics. The Regional Energy Efficiency Programme is one of the tools the European Union has to help the region achieve these goals. The objectives of REEP are supporting the Western Balkan beneficiaries to achieve their sustainable energy objectives, help create a sustainable market for energy efficiency in the region, promote renewable energy and energy efficiency and stimulate energy efficiency investments. The initiative signed today checks all the boxes and we are proud to support it, said Emanuele Giaufret, EU Ambassador to Serbia.
Currently, Serbia’s district heating systems rely heavily on fossil fuels and are notably energy inefficient.
This project, the first of its kind in south-eastern Europe, aims to address these challenges by providing significant environmental benefits and boosting energy security.
With Serbia importing up to 90 percent of its natural gas supplies, the increased use of renewable and waste heat in district heating systems will reduce the country’s dependence on imported petroleum products and natural gas for heating and cooling.
The signing of this contract is extremely important for the Republic of Serbia because, in this way, we contribute to a healthier environment through the improvement of air quality, the use of renewable energy sources in the production of thermal energy, and the increase in energy efficiency. In the coming period, we will continue to invest in the energy sector, where we will realize large investments foreseen in the Leap into the Future – Serbia 2027 programme, thereby ensuring the security of supply and monitoring the accelerated development of our economy. In addition, investments in a healthier environment, which directly contribute to improving the quality of life of our citizens, remain at the top of the priorities of the Serbian government, and that is why we will continue with investments in that area as well, said Minister Siniša Mali.
The project is expected to deliver considerable environmental benefits, by producing 115 GWh of renewable and waste heat per year, reducing annual carbon emissions by approximately 14,600 tonnes of carbon dioxide equivalent (CO2eq), and making significant savings in water and energy.
It will invest in district heating companies in Pančevo, Vršac, Kraljevo, Niš, Bogatić, Bečej, Kruševac, Novi Pazar, Paraćin and Kragujevac, integrating cutting-edge solar-thermal technology, heat pumps, and urban and industrial waste-heat and geothermal technologies into their existing systems.
With today’s signing, we completed the complete financial construction for this project, worth EUR 40.5 million with a total of EUR 10.5 million worth of grants, for which I thank our European partners. Citizens of Bečej, Bogatić, Kragujevac, Kraljevo, Kruševac, Novi Pazar, Niš, Pancevo, Paraćin and Vršac will receive a cleaner and more modern district heating system. In the previous period, we worked on the introduction of biomass into district heating systems, while through this project, heating plants in Serbia will start using solar collectors, heat pumps, waste heat, and geothermal sources, along with the accompanying modernization of the hot water network. With the implementation of all planned projects, the production of thermal energy from RES in Serbia will be doubled, with a significant increase in energy efficiency and a reduction in carbon dioxide emissions, commented Dubravka Đedović Handanović, Minister of Energy and Mining.
The EBRD is a leading institutional investor in Serbia and has now invested more than EUR 9 billion through 355 projects in the country, of which the majority have supported the private sector.
The EBRD focus in Serbia is on supporting private-sector competitiveness, green-energy transition, and sustainable infrastructure.
We are pleased to provide financing for this groundbreaking project aimed at transforming district heating systems in Serbia. Given the current dependence of Serbia’s district heating systems on fossil fuels and their significant energy inefficiencies, this project promises substantial environmental benefits and enhanced energy security for the country. In addition, local communities will experience notable improvements in air quality and living conditions, said Odile Renaud-Basso, President of the EBRD.
