WASHINGTON, October 10, 2014—Minister of Finance of Serbia, Dušan Vujović, and World Bank Country Director for South East Europe, Ellen Goldstein, yesterday signed a loan agreement in the amount of EURO227.5 million loan (US$300 million equivalent) for the Floods Emergency Recovery Project for Serbia.
The loan comes in response to the devastating flooding that hit Serbia in mid-May, and will support the country in meeting critical needs in the power and agriculture sectors, repairing damaged flood control infrastructure, and helping the country better respond to natural disasters.
“We appreciate the World Bank’s swift action in preparing and approving this loan,” said Dušan Vujović, Minister of Finance of Serbia. “It will help our farmers recover from losses caused by the floods, help us restore part of damaged flood control infrastructure, and help Serbia go through the upcoming winter with increased energy stability.”
The Floods Emergency Recovery Project focuses on priority sectors identified in a Recovery Needs Assessment (RNA) conducted by the Government in June and July, and supported jointly by the European Commission, United Nations Development Programme (UNDP), and the World Bank.
“The loan we are signing today is designed to help Serbia face the short- and medium-term impact of these climate induced flood events,” said Ellen Goldstein, World Bank Country Director for South East Europe, “by ensuring that winter power blackouts will, to the greatest extent possible, be avoided, and by contributing to the re-launch of energy production. This is critical both from a human and from an economic development perspective: lower income groups in Serbia are particularly dependent on electricity for heating, and prolonged power blackouts would be a major drain on an already weak economy.”
Goldstein added that “The Bank stands ready to support the government on these issues, with both financial and advisory support. Through this operation we hope not only to help Serbia overcome the consequences of disaster, but also to create a basis to address broader underlying issues in a comprehensive and long-term manner.”
Specifically, the operation will help close the financing gap for the energy purchases to ensure power during the upcoming winter, will recover and strengthen critical power sector infrastructure, and finance investments in energy efficiency. In the agriculture sector, the project will help ensure direct support to farmers in affected areas, providing these farmers with the income security needed to invest in their farms. The project will also help improve resilience to disasters by financing repairs to critical flood prevention infrastructure.
With this operation, the World Bank portfolio in Serbia includes 8 operations totaling approximately US$1.1 billion. Areas of support include environment, health, social safety and employment, local infrastructure, education, competitiveness, and financial sector development.