Serbia secures EUR 50 million loan for air quality projects

The Government of Serbia has secured a EUR 50 million loan to fund a series of air quality projects across several cities. The funds will primarily go towards replacing coal- and fuel oil-fired boiler rooms in six cities.

For years, air pollution has been one of the biggest environmental issues in Serbia.

Minister of Environmental Protection Sara Pavkov and First Deputy Prime Minister and Minister of Finance Siniša Mali have signed two agreements with the European Bank for Reconstruction and Development (EBRD), which will soon lead to significant investments in air protection projects in multiple Serbian cities, the Ministry of Environmental Protection said.

Mali signed a EUR 50 million loan agreement, while Pavkov inked the project agreement. On behalf of the bank, both documents were signed by Matteo Colangeli, EBRD Regional Head of the Western Balkans.

EUR 50 million will be invested in cities with the highest levels of harmful emissions

Pavkov noted that based on these agreements, EUR 50 million would be invested in cities mapped as those with the largest excesses of harmful emissions. This is good news for residents of Belgrade, Niš, Valjevo, Zaječar, Novi Pazar, and Smederevo, where the projects will be implemented, she added.

In these cities, old, outdated boilers running on fuel oil, coal, and other fuels with an adverse impact on air quality will be replaced. Modern and sustainable heat energy sources, such as heat pumps, biomass, and industrial waste heat, will be installed, she stressed.

The projects will also include, where possible, connection to district heating systems or natural gas networks.

An air protection law is in the process of adoption

“These projects are the culmination of years of work. We have entered a phase where we can expect the launch of construction and intensification of the efforts for cleaner air, which remains one of our top priorities,” Pavkov stressed.

She recalled that an EBRD loan had helped replace 50-year-old coal boilers with state-of-the-art gas boilers at the Kragujevac district heating plant. The second phase, the remediation of the ash landfill, has also begun, she added.

From 2021 to 2024, the ministry has implemented projects to replace 169 boiler rooms in public institutions across 76 local authorities, according to Pavkov.

Under a public call, funds have been allocated for projects in 18 municipalities in 2025, with another call currently underway. An air protection bill is now before the National Assembly, intended to provide a new overarching framework and fresh momentum in the fight for better air quality, Pavkov noted.