To date, the European Investment Bank has invested more than €8 billion in projects in Serbia. The Bank has continuously increased its support for the green transition in the Western Balkans, and since 2020 alone, it has invested more than €420 million in energy projects and the modernization of energy infrastructure.
This was pointed out by Damien Sorrell, Head of the EIB Regional Hub for the Western Balkans, in an interview for the RES Serbia portal. Among the most important projects financed by the bank in Serbia are the introduction of smart meters, supported by a loan of 80 million euros. Last year, the EIB signed a €100 million loan for the rehabilitation of hydropower plants in Serbia.
Sorrell estimates that the market in Serbia is now mature enough for standard solar projects and wind farms, so commercial banks can finance them directly, without the need to involve international financial institutions such as the EIB.
He announces that the EIB is preparing to launch a new programme – the “Innovation and Green Transformation Fund for the Western Balkans”, worth €170 million.
According to him, the Bank will continue to prioritize energy efficiency, the expansion of renewable energy sources and environmental protection in the Western Balkans region. The focus will also be on climate change adaptation projects, as the Western Balkans are increasingly vulnerable to the consequences of climate change.
Sorrell also talks about the opportunities that are opening up for private investors, the EIB has launched its “green checker” and emphasizes the importance of dual education and regional cooperation in the fight against climate change.
Photo: connectionregion/Ivan Petrović
The European Investment Bank has been present in Serbia for almost half a century. How much funding has been invested in Serbia so far, and which projects are you particularly proud of?
– The European Investment Bank (EIB Global), the European Union’s lending arm owned by its member states, has long supported Serbia’s economic transformation, financing critical infrastructure from roads and railways to hospitals, schools and science parks. With over €8 billion invested to date, we ’ve helped improve living and business conditions for people across the country.
As Serbia continues to align with EU standards under its Reform Agenda, EIB technical assistance is also helping to ensure that projects meet the criteria for accessing available EU funding, in particular under the New Growth Plan.
While the EIB has traditionally been one of the largest financiers of the transport sector, we are increasingly placing emphasis on education, health and workforce development, critical levers for addressing brain drain and skills mismatches across the region. This shift is particularly urgent in the context of the green transition, which depends not only on infrastructure but also on human capital.
Demand is rising sharply for technical competences, while transversal skills such as digital literacy are becoming essential across sectors. According to the European Commission, the renewable energy sector alone could create up to 3.5 million new jobs in the European Union by 2030. Meanwhile, high-carbon industries are in decline, highlighting the need for large-scale reskilling and upskilling to ensure workers are not left behind.
To support these efforts, EIB Global has financed the renovation of schools, laboratories and universities across Serbia. Its €70 million financing in the Connected Schools project helped bring high-speed internet to over 3 800 schools, benefiting over 730 000 students and 100 000 teachers. A further €40 million loan is supporting Serbia’s dual education strategy, enabling funding of regional training centres that deliver vocational education, lifelong learning opportunities and improved employability. We are particularly proud of our investments in education as investing in youth is investing in our common future.
What are the key current EIB projects in Serbia and the region in the field of energy transition and decarbonisation of the economy? Which renewable energy projects are you currently financing? Are solar parks, wind farms, or other forms of renewable energy sources the focus?
– The EIB mobilised a record €100 billion in energy investments globally last year, and 60% of its financing was directed towards the green transition. We see the shift to clean energy as central to Europe’s competitiveness, security and autonomy. In 2024, the EIB Group invested €31 billion in energy – up from €24 billion in 2023 and more than double the 2021 figure. Investment in renewables alone reached €12 billion, tripling since 2020.
In the Western Balkans, the EIB is accelerating its energy investments. EIB Global has signed €420 million for energy and energy infrastructure projects since 2020. With an €80 million loan, we are supporting the rollout of smart electricity meters to modernise the grid and reduce energy losses in Serbia. A further €100 million loan was signed in 2024 to rehabilitate hydropower plants in the country, enhancing system flexibility. The Bank is also co-financing large-scale renewable projects with KfW in the region, including wind farms in Bosnia and Herzegovina, a 100 MW solar plant near Pristina and the rehabilitation of the Vau i Dejes hydropower plant in Albania. These efforts aim to diversify the region’s energy mix and bolster energy security. We stand ready to further support the deployment of renewables in the region as well as the infrastructure investments that are required to do so.
In Bosnia and Herzegovina, you are financing the construction of the Poklečani and Vlašić wind farms. What has your experience been with these projects so far, and are you planning similar initiatives in Serbia?
– We are co-financing two large renewable energy projects in Bosnia and Herzegovina, the Vlašić and Poklečani wind farms, alongside KfW, the German promotional bank. These projects are set to deliver a total capacity of 182 MW and once operational, they will supply clean electricity to approximately 97 500 households and reduce carbon emissions by an estimated 500 000 tonnes annually. Our financing will be complemented with EU grants and advisory services, channelled through the Western Balkans Investment Framework.
Beyond reducing dependence on coal, these projects will also contribute to transition to a low-carbon economy. Though not without obstacles in terms of preparation and implementation, we see them as crucial for energy security, but also for the competitiveness of local economies, especially in regard to the upcoming carbon-related taxes. In Serbia, we are financing the rehabilitation of hydropower plants, but we are certainly interested in expanding our support to other renewable energy resources.
Are state projects a priority for the EIB, or is there a real possibility for private investors to obtain favourable loans for wind or solar power plants?
– For smaller-scale initiatives, the EIB is partnering with commercial banks as well as national development institutions, to extend credit lines to SMEs. These financial opportunities, offered on favourable terms, are helping SMEs invest in renewable energy and energy efficiency upgrades, cutting energy use by up to 70% in some cases. For example, in 2024 alone, we disbursed €200 million of long-term funds to over 1 500 SMEs in Serbia, of which over 10% undertook green investments.
Partial portfolio guarantees issued by the European Investment Fund (EIF), part of the EIB Group, are helping commercial banks reduce risk exposure and lower collateral requirements, thus unlocking greater lending capacity for SMEs. In the Western Balkans, the EIF has deployed the EU-funded Guarantee for SME Resilience under the Western Balkans Investment Framework (WBIF), which is expected to deploy a total of €885 million, achieving a leverage of 15x. In Serbia, the initiative is expected to mobilise €250 million worth of loans to some 4 650 small businesses. With demand for green financing rising, further guarantees of this kind will be essential to sustain momentum.
We also have the possibility to finance larger private sector projects directly, such as the FIAT project in Serbia aiming to adapt the factory for electric vehicle production, contributing to the green transformation of the European automotive industry. For energy-related projects we can also finance on a project finance basis; however, we note that in Serbia the market is now mature for standard solar and wind power projects and that commercial banks are happy to finance them directly without recourse to IFIs such as the EIB.
Our financing is often backed by technical assistance and capacity building to help firms prepare bankable projects and banks to better apprehend risk aspects. The EIB is also preparing to launch its “green checker” for the Western Balkans based on the EU taxonomy, an online tool enabling companies to assess the eligibility of their projects and access dedicated credit lines. We will also soon publish our decarbonisation guide for SMEs, which will be particularly timely as the Carbon Boarders Adjustment Mechanism (CBAM) is expected to start in 2026. By working closely with governments, partners and financial institutions, the EIB is helping local businesses modernise operations, adopt clean technologies and energy solutions to stay competitive amid tightening EU supply chain and carbon regulations.
What effects has the EIB’s 2023 decision to allocate 5 billion euros to support the “European Wind Power Package” brought? How is this reflected in the Western Balkans?
– As part of the European Wind Power Package, we are backing the European Commission’s efforts to stabilise the wind energy sector through a new €5 billion pan-European counter-guarantee facility. The instrument, aimed at de-risking commercial bank lending to key wind industry suppliers, is designed to ease supply chain bottlenecks and unlock broader investment. The facility is expected to mobilise up to €80 billion in wind energy investment and support the installation of 32 GW of new capacity, contributing significantly to the European Union’s target of 117 GW by 2030.
The initiative underscores the EIB’s role in deploying risk-sharing tools to accelerate the green transition, decarbonise the economy, and bolster industrial competitiveness. In the Western Balkans, the EIB intends to continue supporting the construction of new wind farms, while also exploring onshore wind power opportunities, building on its early support for the sector. The EIB is currently working on designing these types of de-risking instruments for the region to increase the risk-appetite and lending capacity of commercial banks for renewable energy projects, particularly in the wind sector. However, scaling up investment in this section will require modernised grid infrastructure and more transparent, efficient and EU-aligned permitting processes.
In Europe, you have established a number of partnerships with commercial banks to strengthen the wind industry. Are similar models planned for Serbia and the region?
– As part of the EU Wind Power Package, the EIB has signed six intermediated operations with major European banks in 2024, mobilising €3 billion to support wind-energy equipment manufacture. In the Western Balkans, as already mentioned, we are working on making available similar instruments to de-risk commercial banks’ financing of sizeable renewable projects and ensure that such projects are developed in line with the highest EU standards.
In the Western Balkans, an exemplary partnership that is already delivering results is the “EU for Green Agenda in Serbia” initiative. Since 2022, it has supported over 60 green innovations, including renewable energy projects, unlocking over €29 million in total investment, equivalent to 15% of Serbia’s estimated green investment. The programme is jointly funded by the European Union, Sweden, Switzerland, and Serbia, and implemented by the United Nations Development Programme (UNDP), the Ministry of Environmental Protection, and the EIB.
Looking ahead, the EIB is also preparing to launch the Innovation and Green Transformation Facility for the Western Balkans. The €170 million programme will combine concessional credit lines, €17 million in performance-based grants, and technical assistance to support private sector innovation in areas such as sustainable use of resources and clean technologies. By blending finance with advisory support, the facility aims to unlock private capital and accelerate the green and digital transition.
You have been heading the EIB office for the Western Balkans for less than a year. How do you assess the investment climate in Serbia and the region? Where do you see the greatest potential for improvement?
– Foreign direct investment has played a pivotal role in the Western Balkans’ economic development over the past decade, averaging 6% of GDP, with 70% originating from EU member states. This capital influx has driven technology adoption, productivity gains and job creation, particularly in traditional sectors such as manufacturing and financial services. However, emerging industries like ICT and renewable energy are now drawing attention due to their growth potential and alignment with global sustainability goals.
To sustain momentum, the region must accelerate structural reforms and embrace a new growth model rooted in EU standards and green transition priorities. In this respect, the New Growth Plan and reforms agenda represent a wonderful opportunity. The upcoming Carbon Border Adjustment Mechanism (CBAM), set to take effect in 2026, underscores the urgency of decarbonisation. While renewables are gradually increasing in the region’s energy mix, fossil fuels still dominate. EU-backed investments in transport infrastructure have already boosted trade efficiency, with further gains expected upon EU accession. Yet, challenges persist: the region’s transport and digital infrastructure lags behind EU standards, and labour shortages threaten productivity. Connectivity, market integration (in particular among the region itself) and human capital remain key to unlocking long-term growth.
What will be the focus of your work in the coming period regarding Serbia and the Western Balkans?
– Along with financing, EIB Global is stepping up technical support for governments, banks and businesses to accelerate the rollout of high-impact green and sustainable projects across the Western Balkans. Under the European Union’s New Growth Plan, the Bank will continue to prioritise energy efficiency, renewable energy expansion and environmental protection, while also investing in human capital and SME development to build a more resilient regional economy.
In addition, the Western Balkans region is increasingly vulnerable to the escalating impacts of climate change, with more frequent extreme weather events compounding the strain on ageing infrastructure and fragile energy systems. Hydropower output is under pressure from erratic rainfall, while electricity grids face growing demand from rising temperatures and cooling needs. That is why climate adaptation projects will be essential going forward.
As the EU climate bank, we have significantly ramped up our global climate adaptation financing, allocating €4.6 billion in 2024 alone. These investments are critical to strengthening climate resilience, protecting lives and assets, and securing long-term economic stability. Every euro spent on adaptation is estimated to save €5 to €7 in avoided damage – making climate action not just the right thing to do, but the smart thing to do.