First Serbia Green Transition Programmatic Development Policy Loan

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The development objective of the First Serbia Green Transition Programmatic Development Policy Loan for Serbia is to support the Government of Serbia’s (GoS’s) efforts to: (1) better align fiscal management with the climate-change agenda, (2) accelerate the clean energy transition, and (3) align with European Union (EU) standards on environment and climate action. Maintaining a stable macro-fiscal framework and promoting climate smart fiscal policy are prudent choices in the context of renewed fiscal constraints due to the ongoing energy crisis. In Pillar 1, this operation supports the following reforms: in-year reporting on the budget execution to increase transparency on budgetary spending including on environment and climate-related activities; the fiscal risks assessment methodology to consider the potential impact on public finances caused by natural disasters; and a climate-smart public investment management system. Pillar 2 supports the GoS’s efforts to speed up a sustainable transformation of the energy sector, by improving residential energy efficiency; increasing the share of renewable energy; accelerating energy market reforms; ensuring the financial sustainability of the utility Elektroprivreda Srbije (EPS); and strengthening the support for energy-vulnerable consumers. Pillar 3 supports the alignment of domestic legislation with EU legislation to reduce greenhouse gases (GHG) emissions; improve waste management; and enhance air quality.