300,000 people in 9 municipalities to benefit from €5 million credit

The EBRD is lending €5 million to the Duboko Waste Management Company to build a regional solid waste landfill that will serve more than 300,000 people in nine municipalities across central and western Serbia.

Inadequate solid waste treatment is one of the biggest ecological problems in the country and solid waste management has been defined as one of the priorities of Serbia’s environmental policy.

This project will support Serbia’s national strategy of creating new regional landfills, improving solid waste collection facilities and helping to close down illegal landfills that do not comply with EU standards. The loan will specifically finance the new landfill with waste collection points, transportation trucks, and waste separation facilities used for recycling and composting.

This will be the first regional municipal waste landfill in Serbia to be built in accordance to EU standards and the national solid waste strategy. The investment programme also includes landfill gas extraction and flaring, and the project has the potential to become one of the first in the solid waste disposal industry to benefit from a carbon transaction associated with landfill gas flaring. This could set the standard in the country in terms of reducing the carbon footprint from landfill operations.

The project benefits from a €400,000 technical cooperation grant from the European Agency for Reconstruction for a feasibility study as well as a €3 million grant for project costs.. The Serbian government is also providing grant funding of over €1 million. The remainder of the financing for the project is coming from the nine municipalities themselves through capital contributions to the company. An additional €308,000 grant will be provided by the French government for a financial and operational performance improvement programme.

Henry Russell, EBRD Deputy Director for Municipal and Environmental Infrastructure, said Serbia faces major challenges in modernising solid waste management to ensure compliance with EU standards. The successful multi-municipal collaboration should encourage other towns and cities to structure solid waste management on a commercial basis, thereby helping to establish more efficient, sustainable and ecologically sound systems throughout Serbia.

This is the first Bank’s project in Serbia’s solid waste sector and is the first financing to a regional public utility company. Previously the EBRD has extended loans to the municipal sector through loans to the city of Belgrade, used for investments in the city-owned transport company, district heating and the water company, and loans to smaller municipalities, including Nis, Novi Sad, Kragujevac and Subotica under a sovereign guarantee.

The Duboko Waste Management Company is owned by nine municipalities, and majority owned by the municipalities of Cacak and Uzice.