Serbia seeks another EUR 50 million loan from EBRD to shut down harmful boiler plants in six cities

The President of the European Bank for Reconstruction and Development (EBRD), Odile Renaud-Basso, recommended to the Board of Directors to support the initiative to approve a loan of up to EUR 50 million to Serbia for investment in the dismantling of environmentally harmful boiler plants in six local self-governments, as well as for investments in sustainable heat sources that include heat pumps and wood biomass.

According to the EBRD documents that Biznis.rs had access to, this loan should also enable connections to the district heating network, all within the framework of the Air Quality Improvement Project in Serbia.

- This project will support Serbia's efforts to improve air quality in the country, which is among the worst in Europe - Renaud-Basso emphasized in her recommendation to the Board of Directors.

The project, she said, is expected to significantly reduce carbon dioxide (CO2) emissions across Serbia, reduce the share of imported energy sources and overall energy costs for public users.

- In addition, the project will support the transition to low-carbon heat supply methods, which is a key step towards decarbonizing the heating and cooling sector and a priority within the European Union's Growth Plan and Reform Agenda for the Western Balkans - concluded Renaud-Basso.

Let us remind that, at the end of the year, the EBRD approved a loan in the same amount of EUR 50 million for the shutdown of non-ecological boiler plants in 10 local self-governments across Serbia.

According to the documentation accompanying this potential loan, the beneficiaries are “public entities at the central and local level” responsible for the operation of polluting boiler plants - ministries, public enterprises, academic institutions and the like - located in “six highly polluted local governments:” Belgrade, Smederevo, Nis, Zajecar, Valjevo and Novi Pazar.

When it comes to the planned effects of using this loan, it is calculated that about 70,430 MWh of heat currently generated by burning coal and oil will be replaced by heat produced using renewable energy, or energy from waste processing in the amount of approximately 59,750 MWh, with additional delivery from the existing district heating network in the amount of approximately 17,940 MWh.

- The project will lead to a significant reduction in greenhouse gas (GHG) emissions, reducing CO2 emissions by 18,000 tons per year, which represents a reduction of 81 percent compared to the initial state. It will also significantly reduce the presence of other polluting particles from these boiler plants - it is estimated in the EBRD documentation.

Support for competitiveness is listed as an additional quality of this project.

- It promotes significant improvements in cost efficiency, which will lead to savings in heat production costs in the amount of more than two million euros per year or more than 50 percent of the total cost of heat production - the documentation emphasizes.

The EBRD Board of Directors will decide whether to approve the loan on February 25, and if the decision is positive, the Ministry of Environmental Protection will be responsible for using the money and implementing the project.