Serbia and EU Sign New Support Package Worth Over 86 million Euros

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Officials from the European Union and Serbia signed today a grant package for Serbia worth over 86 million Euros. The grant package will focus on supporting Serbia in protecting the environment – in particular safe drinking water, supporting the tourism sector and to support small and medium sized enterprises.

The signature of the financing agreement in Palata Srbije by Minister for European Integration Jadranka Joksimovic and the Ambassador of the European Union to Serbia, Sem Fabrizi was attended by President Vucic and the Ambassadors of the Member States of the European Union.

The EU Commissioner for EU Enlargement Negotiations Oliver Varheyli was tuned into the ceremony via a pre-recorded video message from Brussels.

In his video statement from Brussels Commissioner Varheyli stated:

“I am very pleased that today the European Union and Serbia are signing an agreement for a new 86 million EUR programme in grants to support the economy and the environment.

This is a clear expression of our commitment. The European Union has been by Serbia’s side from the beginning of the COVID-19 pandemic. At the start of the outbreak, our focus was on the immediate needs and on helping to strengthen the health care sector. (…)

This week we have announced the delivery of the COVID19 vaccines to the Western Balkans. Over one-third of 651.000 doses of BioNTech Pfizer vaccines from the EU will first go to the frontline medical workers and the rest for some of the most vulnerable groups.

Serbia is doing very well in the vaccination campaign and you are rightfully proud of it. You provided for your people and shared the vaccines with the region as well for which we are grateful. Now, the EU contribution also comes to you – because we care. We care for Serbia and we care for the whole Western Balkans!

The EU support however goes well beyond the vaccinations, focusing also on mid- and long-term recovery. Today’s package will further foster the support to the economy, which has been hit by the crisis. Small and medium sized enterprises are the backbone of the society and we wish to continue our success story with them, as we have been supporting this sector with great results for many years. 

It also ties well in with our Economic and Investment Plan for the Western Balkans, which aims to boost the recovery, speed up the convergence with the EU as well as the reforms.

We also need to see Serbia advancing faster on the EU path. To ensure that, we have suggested ways to accelerate the accession process based on the solid progress in the EU reform agenda. I know the Serbian government is working very hard to deliver this. We have a unique opportunity with a strong Serbian government backed by a strong parliamentary majority. We are ready to move faster and hope that Serbia is also ready to move faster. For this European Commission the Western Balkans is a priority. Your future is the European Union, together with the whole region.

“Today, we received 86 million euros of non-refundable aid from the EU, these are funds that are purposefully spent for programs and projects that have been agreed in advance. These are projects that are of a structural type, from the development and progress of our education, our entrepreneurship, our innovation opportunities, environmental protection, to the progress of the rule of law. Thank you very much, the EU, we still have a lot of work ahead of us! “, Said President Vučić.

“The largest part of the support, which is 45.5 million euros, goes to the sector of environmental protection and achieving the goals of the Green Agreement.” These funds will include the construction of wastewater collection and treatment systems in Cacak, Loznica and Sokobanja. This support will further include preparatory activities that should lead to the construction of a waste management plant in Novi Sad,” said Minister Joksimović.

This substantial support package consists of grants – ie: the funds do not have to be paid back by Serbia.

This 86 million euros package is structured in the following way:

Competitiveness and economy

17 million Euros will support competitiveness of small and medium sized enterprises, particularly in the tourism sector

Environment

The environment and energy pillar be divided in 2 blocks:

  • 45 millions euro to kick-start the Green Agenda in Serbia, preparing improved waste management in Novi Sad, installing water monitoring units for the water districts of Danube, Sava and Morava river basins, as well as air quality monitoring stations to extend the network.
  • 9 million Euros in grants for energy efficiency investments in public buildings reducing costs, CO2 emissions and improving the quality and services for the citizens using the buildings.

Good governance

14 million Euros will be dedicated to support the reforms on governance, acquis reforms and Serbia’s participation to EU programmes

The European Union is the largest donor, investor and trade partner with Serbia.

The EU has acted very quickly in support of the Western Balkan partners from the start of the crisis, mobilising a very substantial package of €3.3 billion to help address the immediate health crisis and mitigate the socio economic crisis. More recently in October, the Commission put on the table an Economic and Investment Plan of up to €9 billion to spur the long term recovery of the Western Balkans and convergence with the EU.

With regard to small and medium sized enterprises the EU in Serbia currently runs a campaign called EU za biznis which features successful beneficiaries of EU assistance in this sector.http://europa.rs/biznis/

Background:

What is exactly being funded and how does EU money work in Serbia? 

The IPA 2020 national programme is the second part of the last of seven annual programmes from the IPA II period (2014-2020). The Financing Agreement for the part I of IPA 2020, in the value of 70.2 million, was signed in May of 2020. The part II value which is signed now amounts to EUR 86.06 million. It was programmed during 2020, and presented to the IPA Committee and approved on 23 November 2020.

The 2020 part II programme for which the FA is being signed today is divided into three big blocks: democracy and governance, which includes an EU Integration Facility (supporting acquis approximation and better standards in a number of sectors) and support for the participation of Serbia in EU programmes such as Erasmus +, Horizon 2020 and Cosme. The overall value of this block of the programme is EUR 14.5 million.

  1. Under the environment, climate action and energy block, there are two components. The first is a large EUR 45.55 million programme for the environmental sector. An innovative facility is dedicated to the implementation of pilot measures for environmental policy and climate change in alignment with the Green Agenda.Funds will further support capacity building for Novi Sad Municipality in solid waste management. It will also provide water monitoring units for the water districts of the Danube, Sava and Morava rivers, as well as improved air quality monitoring across the territory of Serbia. Waste water treatment facilities will be built for the cities of Loznica, Cacak and Sokobanja. The results expected include unlocking the potential for more green investments under Green Agenda, the construction and operation of 3 modern wastewater treatment plants to serve around 160,000 population equivalent. In the targeted cities, wastewater will be fully treated, as compared to current situation where the wastewater is discharged directly without any treatment into rivers.                                                                                                        b) A second part of that block is the support to the Regional Energy Efficiency Programme for a dedicated window for financing projects in Serbia, in the value of EUR 9 million. The programme will support projects leading to buildings retrofitted in line with the energy performance standards set out in the Energy Performance of Buildings Directive, leading in the future to CO2 reductions.
  2. A large block of the programme (EUR 17 million) is dedicated to the competitiveness and economic sector. This is part of the EU for Covid-19 Economic Recovery. It is expected that this support will allow for improved economic growth in targeted municipalities; improved social infrastructure and social cohesion and upgraded tourism/cultural facilities and stakeholder’s skills as part of the Tourism Development Strategy of the Republic of Serbia implementation.

Rundown of the programme in table format with all details:

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