Commissioner for Neighbourhood and Enlargement, Olivér Várhelyi, visited Serbia and Montenegro on 14-16 May 2024, to advance discussions on EU related reforms and the Reform Agendas under the newly adopted €6 billion  Growth Plan for the Western Balkans.

Serbia

In Serbia, Commissioner Várhelyi met with President Aleksandar Vučić and members of the new government. He also took the opportunity to attend the signing ceremony for the Regional Energy Efficiency Programme (REEP) investment in a new biomass heating plant.

The project will facilitate the transition to biomass of several local self-governments. The plant is to replace fuel oil and coal with biomass, a move that will lead to a reduction of up to 90% in carbon dioxide emissions and the complete elimination of sulphur dioxide. This will ensure a secure energy supply, a cleaner and a healthier environment for citizens.

The biomass heating plant project has a total value of €31.9 million, including an EU grant of €9 million through the WBIF-supported Regional Energy Efficiency Programme, blended with a loan from the German Development Bank KfW and donations from the Federal Republic of Germany.

Dubravka Đedović Handanović, Minister of Mining and Energy said: “In the previous phase of the project, we successfully built four biomass heating plants in Priboj, Mali Zvornik, Novi Pazar, and Majdanpek, with a total investment of €27 million. This investment has already started to bear fruit, with citizens reaping the benefits of reliable and quality heating and cleaner air. With the continued support of the EU and Germany, we are set to expand these investments in Niš, Bajina Bašta, Prijepolje, Rača, and Novi Pazar.”

Commissioner Várhelyi stated that the new investments in district heating will continue to reduce air pollution and stimulate local development and economic growth. Wood biomass, which must be supplied locally to be economically sustainable, will create new jobs and boost the local economy. "With the grant agreements worth €10 million, the EU, a key supporter of the project, is investing in cleaner air and safer energy supply, reaffirming the principles of the green transition by fostering energy independence and environmental responsibility," said Várhelyi, highlighting that over the past ten years, the EU has provided over €600 million in grants to Serbia's energy sector.

Montenegro 

In Montenegro, Commissioner Várhelyi visited the Lastva electricity sub-station, a key component of Montenegro's section of the Trans-Balkan Electricity Corridor, a flagship investment of the EU’s Global Gateway strategy, and part of the Economic and Investment Plan. It connects the electricity systems of Montenegro, Serbia and Bosnia and Herzegovina to Croatia, Hungary, Romania and Italy through 400 kV overhead lines and submarine cables.

Of the total €129.4m investment, the EU, through WBIF, provides €27.4 million in grants, with EBRD and KFW providing loans of €60 million and €25 million respectively. Montenegro contributes €17 million itself. 

"Energy security and sustainable energy generation from renewables are clear targets of our EU energy policy. The substation visited today is an important example and is part of a much bigger picture, supported by Team Europe," Commissioner Varhelyi said.

The Commissioner concluded the site-visits with the Tivat/Kotor wastewater treatment plant, co-funded by a €9.1 million WBIF Bilateral donor grant, as part of the comprehensive Boka Bay Water Supply and Wastewater Collection Infrastructure project.

Western Balkans Summit 

Commissioner Várhelyi participated in the Western Balkans Summit in Kotor which gathered all six leaders in the region to discuss the implementation of the Growth Plan. The Plan aims to boost economic growth and speed up the Western Balkans’ integration with the EU. It features three pillars: enhancing integration with the EU Single Market, boosting the Common Regional Market and accelerating fundamental reforms. Moreover, the EU will increase financial assistance through a new instrument, the €6 billion Reform and Growth Facility, split into €2 billion in grants and €4 billion in loan guarantees for the period 2024-2027.

"The Growth Plan is no longer a draft, it is a reality we have started to implement. Because of the [combined] intensity of aid from the Economic and Investment Plan and the Reform Agendas (…) until 2027, the Balkans will be ready (…) to join the EU" said Commissioner Várhelyi.

In Kotor, the Western Balkans Leaders welcomed the three new priorities presented by the European Commission on Conformity Assessment and Acceptance, Critical medicine and the EU Digital wallet. These priorities complement the commitments taken during the Tirana Summit on the Single Euro Payments Area, Green Lanes and customs cooperation, WiFi4Western Balkans and European Digital Innovation Hubs.

About REEP

The Regional Energy Efficiency Programme in the Western Balkans (REEP) aims to create a sustainable energy efficiency market in the region. The programme provides a combination of financial instruments for private sector and individual households, technical assistance and policy dialogue support for public institutions to overcome market obstacles and stimulate long-term market growth. The REEP is implemented by the European Bank for Reconstruction and Development (EBRD) and the German Development Bank (KfW) with the support of the EU and other bilateral donors. To date, REEP has provided more than €300m in credit lines and €150m in direct lending for 1,000 SMEs, more than 12,700 households and 290 public buildings. This has contributed to almost 1 million MWh/yr in energy savings. REEP Plus is identified in the European Commission's Economic and Investment Plan for the Western Balkans as one of the flagship projects within the "Renovation Wave" under the investment window "Clean Energy". These projects contribute significantly to the reduction of greenhouse gas emissions, and improve the living standards and health of citizens.