UNDP and Partners Launch Green Financing Model to Accelerate Serbia’s Transition

Damien Sorrell, Head of the EIB Regional Hub for the Western Balkans, said the partnership has helped create a pipeline of viable green projects capable of attracting multi-source financing.

The United Nations Development Programme (UNDP), in partnership with Serbia’s Ministry of Environmental Protection and the European Investment Bank’s EIB Global arm, has launched a new green financing model aimed at accelerating Serbia’s transition to a low-carbon and climate-resilient economy.

Introduced under the EU for Green Agenda in Serbia initiative, the innovative model combines donor grants with favourable bank loans that offer lower interest rates and longer repayment periods than those typically available on the market. This blended financing approach is designed to unlock greater private sector investment in green projects and reduce financial barriers for businesses and communities.

With financial backing from Switzerland, six projects have already secured funding through the initiative. These early projects are expected to deliver tangible environmental benefits, including reduced greenhouse gas emissions, improved resource efficiency, and enhanced climate resilience at the local level.

Funded projects include Serbia’s first low-temperature geothermal power plant, energy-efficiency upgrades in industrial production processes, renewable energy integration, wastewater treatment facilities, and advanced recycling solutions. Together, they represent a broad cross-section of investments critical to Serbia’s green transformation.

Damien Sorrell, Head of the EIB Regional Hub for the Western Balkans, said the partnership has helped create a pipeline of viable green projects capable of attracting multi-source financing.

“Through this partnership initiative, we jointly developed an approach to help identify and prepare projects with strong potential for blended financing,” he said. “By supporting project preparation and mediating between commercial banks and companies, we have significantly contributed to Serbia’s green transition.”

Serbian Minister of Environmental Protection Sara Pavkov said the initiative demonstrates that sustainable financing models for environmental investments are both achievable and scalable.

“Cooperation with UNDP and the EIB shows that it is possible to secure sustainable financing for green investments,” she said. “These programmes encourage the adoption of modern technologies and help Serbian businesses align with EU and global environmental standards, which is a key strategic objective for our country.”

The initiative is supported by a wide range of partner banks, including OTP Bank, Banka Intesa, ProCredit Bank, Erste Bank, NLB Komercijalna Banka, UniCredit Bank, UniCredit Leasing, and ALTA Leasing. Their participation expands access to finance for green investments beyond traditional energy efficiency projects.

UNDP Resident Representative in Serbia Jakup Beriš said involving the banking sector is essential to scaling up green investments.

“By including banks in the co-financing model, we are expanding the range of projects that can be considered profitable,” he said. “Banks have already recognised the value of energy efficiency investments and are now ready to support a broader set of initiatives that deliver environmental protection and improve people’s well-being.”

Richard Kohli, Head of Cooperation at the Swiss Embassy, highlighted the importance of private sector engagement in driving long-term change.

“The active involvement of commercial banks and private investors is critical to advancing Serbia’s green transition,” he said. “This model has strong potential to accelerate sustainable, cost-effective solutions across the country.”

The new financing framework builds on the EU for Green Agenda in Serbia’s existing track record. Since 2022, the programme has supported 94 green projects worth €52 million, including €6.3 million in co-financing.

The initiative is implemented by UNDP in cooperation with Sweden and EIB Global, in partnership with Serbia’s Ministry of Environmental Protection, and with technical and financial support from the European Union, as well as the governments of Sweden, Switzerland, and Serbia.