Arne Gooss, Director, KfW, Office in Belgrade: Assisting the greener future of the city

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We are very interested in supporting projects in the area of environmental protection in Belgrade. In particular, we would like to assist in the financing of the waste water collection and treatment system in Belgrade

Although KfW has been mostly concerned to help less developed parts of Serbia, from inception of its office in 2001, it is continuously present in some major projects in Belgrade in the areas of the water supply and energy efficiency. KfW is looking forward to support the city in its major projects to establish better ecological footprint, says Mr.Arne Gooss, Director, of the KfW Office in Belgrade.

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Out of EUR 1.6 billion of Germany’s development assistance in the last 15 years, EUR 1.5 billion was placed via KfW. Which segments in Belgrade have received the biggest investments?

— Serbian-German Development Cooperation commenced in 2000. The KfW office in Belgrade was established in the following year. Since then KfW has been responsible for the coordination and implementation of financial cooperation programs and projects in the framework of this bilateral Development Cooperation. Some of the first projects initiated between our countries were actually those in the city of Belgrade and concerned the rehabilitation of water supply and sewerage systems as well as district heating systems. They were financed by grants provided by the German Government via the German Ministry for Economic Cooperation and Development. The projects had a volume of some EUR 15 million and were finalized between 2004 and 2007. Currently Germany contributes to the financing of further district heating projects in the city. The construction of the combined heat-power plant Vozdovac and the heat pipeline system alongside Gazela Bridge will be financed through concessional loans via KfW and the project implementation will start 2017. Another very good example for our cooperation is an ongoing project together with EPS. It aims at increasing the thermal efficiency of the Nikola Tesla power plant and shall mitigate environmental impacts by improving the exploitation technology in Kolubara. Project investments of about EUR 182 million are jointly financed by KfW (EUR 74 million), the EBRD (EUR 80 million) and EPS. The project will significantly reduce harmful emissions (SO2, CO2 and NOx). The impact which the project will have on the quality of life – especially in the area of Obrenovac and its surroundings – will be definitely “measurable”. KfW-financing of infrastructure projects in Belgrade was and is very effective. However, it is of relatively small volume in relation to KfW’s overall portfolio in Serbia. The reason is that Serbi- an-German financial cooperation mainly focusses on less developed regions of the country, where we reached more than 30 municipalities covering 3.5 million people. Focal areas of financial cooperation are „Energy and Environment/Municipal Infrastructure“, “Sustainable Economic Development“ (credit-lines for SME and rural development, as well as energy-efficiency investments) and Good Governance (social infrastructure for vulnerable groups and smaller-scale municipal investments). The cross-cutting goal of our cooperation is to contribute to “Sustainable Growth and Employment“.

Belgrade has numerous issues with environmental protection. Which projects in Belgrade could KfW support?

— We are very interested in supporting projects in the area of environmental protection in Belgrade, given that environmental protection is one of the cornerstones of our bilateral cooperation. In particular, we would like to assist in the financing of the waste water collection and treatment system in Belgrade. The city is still the only remaining capital at river Danube without having an operating waste water treatment plant. This issue is not only of municipal, but of national importance. The city’s envisaged wastewater project comprising the modernization and extension of the existing system according to EU-water directive standards would have an extremely positive environmental impact on the nature and the people living at large downstream areas of the river.

Also, there is the issue with energy efficiency and utilization of green energy resources. What would be the most important steps that the city should take in this segment?

— The city of Belgrade has been doing a huge job in terms of setting up energy efficiency improvement strategies and envisaging the use of green energy resources. Good practices have also been developed through partnerships and initiatives such as the “Building Efficiency Acceleration“, the “District Energy Initiative“ or the „Energy Efficiency Fund“. In this context, we are convinced that a better, and more intensive, usage of renewable energy sources can be introduced alongside further measures of increasing the efficient use of energy resources. Particularly in district heating, such might involve solar heating, heating pumps, waste-to-energy and biomass usage in combined heat-power plants.

Do you think that the afore-mentioned issues have been given due consideration in Belgrade’s planning process?

— The city management, as well as the communal utilities for district heating (“Beogradske elektrane”) and for water management (“Beogradski vodovod i kanalizacija”), have put much effort into the conceptualisation and planning of the afore-mentioned measures. They have drawn clear plans about further steps that are to be taken. Also, we expect a lot of achievements from the “Energy Efficiency Fund”. KfW is open to discuss whether we can assist the fund in the future.

In the past, Serbia was sometimes quite slow in withdrawing the approved funds and even had to pay penalties for that. How efficient is Belgrade today in drawing funds from KfW?

— Project implementation in the city of Belgrade and the related disbursement of funds has always been swift. However, based on our experience in working with smaller municipalities, we acknowledged that it is not an easy task to implement municipal investments “in an exactly calculated time“, regardless of a very good preparation of each single project. Reasons for such delays can be various, ranging from administrative procedures up to mitigating public and private concerns. However, KfW not „only“ financially supports projects but also assists project partners in the moderation of related procedures and processes. KfW deals with projects in-depth providing assistance in project preparation, implementation and accompanying measures. This is why our projects are generally efficiently implemented. As a result, about 85% of the Serbian-German financial cooperation commitments approved since 2001 (amounting to some EUR 1.5 billion) have been disbursed.

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