Serbia, KfW sign deal for second phase of biomass project

The project will involve the construction and reconstruction of district heating systems in Prijepolje, Novi Pazar, Majdanpek, Bajina Basta and Nis to replace fossil fuels and lower pollution levels, the government said in a press release on Tuesday.

The first phase of the project, worth 27 million euro, was completed earlier this year, with the support of the governments of Germany and Switzerland, when the biomass heating plant in Majdanpek was put into operation, said energy minister Dubravka Djedovic Handanovic.

The completion of the project is expected within a year, with the goal of having 90% of energy production in the municipalities coming from sustainable sources, mainly wood biomass.

The project will be financed by grants amounting to 9 million euro from the EU Regional Program for Energy Efficiency within the Investment Framework for the Western Balkans, 2 million euro from the German government and 1 million euro from the EU Instrument for Pre-Accession Assistance, as well as a 20 million euro loan from the German Development Bank KfW.

$ = 0.9236 euro