Danube hydropower plant Iron Gate on the border between Serbia and Romania

Core area “Climate and energy, just transition” Protecting the environment and human health through wastewater treatment plants and renewable energy

Serbia does not have enough wastewater treatment plants, and most waste is deposited in uncontrolled landfills. Energy generation relies mainly on lignite and oil. All these factors constitute health hazards, pollute the environment and lead to high greenhouse gas emissions.

Serbia lacks the necessary funding to modernise and expand its environmental and energy infrastructure and to comply with the standards of the EU.

Germany is therefore active in Serbia with a view to supporting the reduction of emissions and the decarbonisation of the energy sector, as well as environmentally sound water, wastewater and waste management.

Working together with the World Bank (which is the lead institution in the effort) and the Agence française de développement (AFD), KfW Development Bank is currently preparing a policy-based loan to provide targeted support for reforms in the energy and environmental sectors (Green Transition Development Policy Operation / DPO). This effort focuses on “green” fiscal policies, the implementation of the new energy legislation adopted in 2021 to foster renewable energy and energy efficiency, and the implementation of the climate change legislation adopted in 2021, with a focus on waste management and clean air.

Renewable energy and energy efficiency

In the energy sector, the focus is on supporting the reform agenda of Serbia's Ministry of Energy, with targeted efforts to increase renewable energy generation (especially hydropower, wind energy, and biomass, but also photovoltaics) and to foster energy efficiency and the implementation of relevant EU directives and standards laid down by the regional Energy Community with the EU. Another focus is on modernising, with Financial Cooperation funding, the power grid and integrating it in the European interconnected grid through the Trans-Balkan Corridor from Romania via Serbia and Montenegro all the way to Italy.

In order to improve energy efficiency, German funds are used to support energy upgrades to public buildings such as preschools and schools and the VMA hospital in Belgrade, one of the largest in the Western Balkans. KfW Development Bank is also assisting Serbian banks in providing loans to municipalities and small and medium-sized enterprises for investments in energy conservation measures, environmental improvements and renewable energy.

Sustainable urban development

Under Financial Cooperation, activities have been carried out so far in more than 20 cities in Serbia with a total of about 1.6 million people, with a focus on improving and expanding drinking water supply systems. Now the efforts mainly target medium-sized Serbian towns as they set up environmentally sound wastewater systems. Two modern treatment plants in line with EU standards were put into operation last year in Kruševac and Vranje. Two new national programmes are currently under preparation. They will support the expansion and/or rehabilitation of water and wastewater systems in up to 20 small and medium-sized towns in line with environmental and climate needs. In addition, a programme is being prepared for the introduction of environmentally sound waste management systems in three regions.

In the field of waste management, special attention is being given to the interests of the Roma community. Roma are more likely than other population groups to live in poor hygienic conditions. Often, collecting and recycling waste is their only source of income. They are to be included in the work of the newly established circular economy entities.

As at: 08/04/2022