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The Government of the Republic of Serbia

In the service of citizens

Loan agreements signed for climate change, railway modernisation

Belgrade, 10 May 2021

The government of the Republic of Serbia signed agreements today on approving a program loan for public policies for climate change and on a loan for a project to modernise the railway sector in Serbia using a multi-phase program approach.

The agreements were signed by Finance Minister Sinisa Mali with French Ambassador to Serbia Jean-Louis Falconi and Regional Director for Eurasia of the French Development Agency (AFD) Cecile Couprie, as well as with the World Bank Director for the Western Balkans Linda Van Gelder. The signing was attended by Prime Minister Ana Brnabic.

The first loan is co-financed by the International Bank for Reconstruction and Development (IBRD) with €82.6 million and the French Development Agency with €50 million, and relies on two pillars: improving public sector efficiency and transparency and launching a green recovery.

The second loan is related to the development of the railway node in the total value of €102 million, and the World Bank and the French Development Agency are in partnership with the project, which share the financing with €51 million each.

Prime Minister Ana Brnabic pointed out that these are very favourable loans that fully cover areas whose progress is a priority for Serbia in the coming years.

We will be able to improve Serbia's resilience to future risks associated with climate change and to urgently address the challenges of air pollution. In addition, it will be possible to further improve the work of the public sector and its transparency, and money is planned for the improvement of the railway sector in Serbia. Therefore, the green recovery, further improvement of the work of the public sector and its transparency, as well as the renewal of the railway infrastructure are the three key components of these loans, the Prime Minister stated.

She reminded that by signing the Sofia Declaration on the "Green Agenda" for the Western Balkans, Serbia undertook to implement measures in the field of prevention of climate change and pollution, development of energy and biodiversity, mobility and circular economy, sustainable agriculture and food production.

It is up to us to work on reducing carbon emissions, developing market models for the use of renewable energy sources, as well as reducing the use of coal. With this year's budget rebalance, we have increased the allocations for ecology in relation to the initial budget by RSD 16 billion to RSD 24 billion. The increase in the budget is proof that we are serious in that intention, the Prime Minister stated and added that Serbia must follow Europe and its agendas related to climate change.

The World Bank Group is supporting Serbia in its commitment to transition to a green economy, more efficiently utilize energy resources and build resilience to climate shocks, while supporting growth, employment and eliminating poverty, said Linda Van Gelder, World Bank’s Regional Director for the Western Balkans.

The two loans in partnership with the French Development Agency are designed to assist the Government in its endeavor to enhance sustainability of the Serbian economy and regional connectivity, both of which are critical to Serbia’s path to greater prosperity and to accession to the European Union, she said.

Ambassador of France to the Republic of Serbia Jean-Louis Falconi said, "These two first financings of AFD in Serbia are part of France’s broader approach to supporting Serbia’s ambitions and commitments in terms of climate change, environmental protection and green infrastructure development, in line with Serbia’s European perspective. These projects reflect and contribute to the reinforcement of bilateral relations between our two countries, supported by the highest authorities of the State.”

Cécile Couprie, AFD's Regional Director for Eurasia, is delighted with "the signing of these two important programs, which are the result of a fruitful strategic and operational dialogue established with the Serbian authorities to support climate action policy reforms and the development of key green infrastructures, in tandem with the World Bank.

This initiative demonstrates AFD's ability to provide concrete and suitable support to Serbia for accelerating its EU integration agenda, and fostering a sustainable development pathway compatible with the SDGs and the Paris Agreement on climate change. We will continue to invest vigorously in the coming months and years on these key issues in Serbia and in the region, through all the financing and technical tools offered by AFD Group.”