The Minister of Mining and Energy, Dubravka Đedović Handanović, and the Minister for European Integration, Tanja Miščević, have inked two grants totaling nearly 10 million euros with the German Development Bank KfW for the second phase of Serbia’s “Renewable Energy Sources – Biomass Market Development Program.”
This initiative aims to fund the construction and refurbishment of up to five district heating systems, replacing polluting fossil fuels with cleaner and more efficient alternatives. Participating municipalities include Prijepolje, Novi Pazar, Majdanpek, Bajina Bašta, Niš, and Rača.
Present at the event were Serbian Prime Minister Miloš Vučević, European Union Commissioner for Neighborhood Policy and Enlargement Oliver Varheji, and German Ambassador Anke Konard.
Đedović Handanović emphasized the importance of not only focusing on electrical but also thermal energy sources. She stated, “The state supports investments in district heating systems to reduce energy waste, increase energy efficiency, enable the use of non-polluting energy sources, and provide citizens with reliable and quality heating at sustainable prices.”
She highlighted that the first phase of the project, supported by the governments of Germany and Switzerland, was completed earlier this year with the launch of biomass heating plants in Majdanpek.
“For years, the EU has been Serbia’s most important trade partner, largest investor, and donor,” Đedović Handanović noted. She reminded of the EU’s support for various energy sector projects, including the Serbia-Bulgaria gas pipeline, transmission network development, assistance for energy-vulnerable consumers, and hydroelectric plant reconstruction.
The second phase is expected to bring several benefits, including healthier and cheaper heating for citizens, an eight percent reduction in network losses, and significant cuts in carbon dioxide and sulfur dioxide emissions.
Minister for European Integration Tanja Miščević explained that the second phase entails expanding existing heating capacities and installing new boilers.
She added, “The program promotes Serbia’s local development,” echoing Commissioner Varheji’s sentiment that this marks a new chapter for Serbia towards energy transition. Over the past decade, the EU has invested 600 million euros in Serbia’s energy sector.
German Ambassador Anke Konard highlighted Germany’s substantial financial contribution to Serbia’s energy sector since 2000, totaling nearly 1.5 billion euros.
The project, valued at 32 million euros, receives grants from various sources, including the EU, the German government, and the German Development Bank KfW. Its completion in participating municipalities is expected in about a year, aiming for 90 percent of energy production from sustainable sources, primarily biomass.
The “Biomass Market Development in Serbia” program, launched in 2019 with KfW’s support, has already shown promising results in its first phase, encouraging a transition to cleaner and more sustainable energy sources in district heating systems.
