Odile Renaud-Basso, President of the European Bank for Reconstruction and Development (EBRD), has proposed a loan of up to 50 million euros to Serbia, aimed at dismantling environmentally harmful heating plants in six municipalities and investing in sustainable heating solutions such as heat pumps and wood biomass. The loan will also support connections to district heating systems as part of Serbia’s Air Quality Improvement Project.
Renaud-Basso emphasized that the project has the potential to significantly reduce CO2 emissions, decrease reliance on imported energy, and lower energy costs for public institutions. The initiative will help accelerate the transition to low-carbon heating solutions, a crucial step toward decarbonizing the heating and cooling sectors.
In December, the EBRD approved a similar loan of 50 million euros for the closure of fossil fuel heating plants in ten Serbian municipalities.
The new loan will benefit public entities responsible for operating polluting heating plants in six municipalities: Belgrade, Smederevo, Nis, Zajecar, Valjevo, and Novi Pazar. The project is expected to replace approximately 70,430 MWh of heat generated from coal and oil with 59,750 MWh sourced from renewable energy or waste processing, complemented by 17,940 MWh from district heating systems. This shift is anticipated to reduce greenhouse gas emissions by 18,000 tons of CO2 annually, an 81% decrease compared to current levels, and significantly cut down on other harmful pollutants.
The project will also bring improved cost efficiency, resulting in over 2 million euros in annual savings on heat production, reducing costs by more than 50%. The EBRD Board of Directors is scheduled to vote on the loan on 25 February.
