Official title of the project

Municipal Environmental Grant-Loan Investment Programme


Project information

Sub-Programme I: Rehabilitation of water supply and wastewater systems in medium sized municipalities Sub-Programme II: Municipal Infrastructure Credit Line (MICLIP)
Region / City
Krusevac, Uzice, Vranje
Total budget of programme / project


EUR 142,418 million

EU contribution: EUR 18.818 million (excluding fees)

Co-Financing: EUR 123.6 million


Sub-Programme 1:

Total Budget: 60,818 Mio. EUR

EU contribution: 13,818

Co-Financing : 47 Mio. EUR


Sub-Programme 2:

Total Budget: 81.6 Mio. EUR

EU contribution: 5 Moi EUR of grant funds

Co-Financing : 1 Mio. EUR grant funds for TA plus 75.6 EUR credit lines for municipalities and public utility companies

Implementation period
2011. Sep - 2015. Jul
Expected results

Sub-Programme 1: (1) Up to 3  waste water projects prepared, funded and completed; (2): Up to 3 Public Utilities are able to operate the water and wastewater systems in a financially sustainable way; (3): Further municipalities in Serbia are motivated to develop similar projects .


Sub-Programme 2:  (1) investments in about 25-35 environmentaly friendly and energy efficient projects that will be supported through the grant component and used as flagship projects to motivate other muncipalities to invest in such projects. (2) Further developed municipal loan market; (3) Increased capacities of municipalities and public utility companies to prepare and manage environmentaly friendly and energy efficient projects.


Ministry for Energy, Development and Environmental Protection, Standing Conference of Towns and Municipalities, Municipalities, Public Utility Companies, 

Target Groups

- population benefiting from investments in infrastructure, as well as

- staff of Ministry,

-staff in Standing Conference,

-staff in Public Utility Companies,

- staff in Municipalities

Summary of the project

The investment needs of Serbian municipalities in infrastructure are significant due to decades of underinvestment in these areas. Waste water facilities do not exist in majority of municipalities. Only 5-10% of wastewater in Serbia is treated resulting in a significant negative impact on the environment and puncutally in polluting drinking water sources. The financing volume for capital investments required to meet EU-standards are EUR 3.3 billion up to 2030 according to the National Aproximation Strategy. The need for energy-efficient and environmentaly friendly investments in these areas is also big: Serbia consumes 2.5 times more energy per GDP comparing to the world average and 4 times more comparing to the EU average; 65% of produced electricity is used for household heating.

  1. Creating significant positive environmental impact on the river bodies receiving wastewater from Uzice (Djetinja), Krusevac (Western Morava) and Vranje (Souther Morava)
  2. Addressing the reluctance of municipal governments in Serbia to invest in environmental management and energy saving by providing a direct subsidy to eligible projects in areas of sewerage and waste water, solid waste management, energy efficiency and renewable energy.
  3. Improving living standards of the population through improved municipal infrastructure increased potential for investments and employment;

Programme/Project objectives

The overall objective is to contribute to progress in the reform of local self-government as part of the decentralisation process; support local development policy consistent with the EU pre-accession strategy and a balanced territorial development by strengthening implementation capacities at local level, more efficient municipal planning, improving service delivery and local government asset management.

More specifically:

Sub-Programme 1: i) improving the living conditions of the population in Krusevac, Uzice and Vranje ii) protecting the water bodies receiving wastewater from these municipalities, iii) implementing the Acquis Comunautaire and thereby preparing Serbia to EU-accession. 

Sub-Programme 2:  i) improving service delivery to citizens and reducing energy consumption and greenhouse gas emissions.