USAID SERBIA BETTER ENERGY QUARTERLY PERFORMANCE REPORT (FY23, Q3)

The project focuses on district heating plants (DHPs) and multi-apartment buildings (MABs) by investing knowledge and materials to improve energy performance at the local level. The project provides comprehensive assistance to facilitate efforts and investments that conserve energy or introduce innovative energy sources, such as local renewables. The project has two main objectives: to improve energy efficiency at the municipal level and to promote the utilization of renewable energy. In Quarter 3 of Fiscal Year 2023, the project made significant progress by initiating the execution of the initial energy efficiency pilot schemes in MABs and implementing pilot initiatives in DHPs on time for the heating season. The project entered into agreements with housing associations and contractors to partially fund energy efficiency retrofit initiatives connected to the renovation of residential structures situated in Valjevo city. These buildings were the pioneers, being the first ever MABs to receive financing from the Government of Serbia's public call to allocate subsidies to retrofit residential buildings for energy efficiency. On average, these efforts produced 28% in savings. The project is facilitating dialogue among relevant involved parties, including the Ministry, the city of Valjevo administrators, and housing associations, to ensure that Project initiatives remain on track and well-positioned to overcome hesitation on the part of residents. The project reinforced communication with important public and private sector communities and associates, such as governmental officials, municipal leaders, energy managers, housing association managers, and potential private and public beneficiaries. The project arranged training sessions to enhance the sector's overall proficiency and capacity. To create sustainable financing tools for homeowners' associations (HOAs), the Team actively collaborated with leading stakeholders such as the Ministry of Finance, Postal Savings Bank, Export Credit and Insurance Agency, National Bank of Serbia, Vojvodina Guarantee Fund, United States Development Finance Corporation, ProCredit Bank, and Erste Bank. The Team signed MOUs in Quarter 3 with Postal Savings Bank, ProCredit Bank, and Erste Bank to develop and offer a new HOA lending product. The Ministry of Finance underlined its willingness to support the establishment of a guarantee scheme for HOAs to help unlock commercial financing, contingent on Better Energy pilot projects in MABs demonstrating that the scheme is needed and that it would help unlock the market's potential. The Ministry of Finance is reviewing and giving final input to a MOU with Better Energy expected in Quarter 4. Seven local self-governments (LSGs) have been engaged in the project, and the project has established a strong partnership with the Ministry of Mining and Energy, the Ministry of Finance, and the National Bank of Serbia. The project has also collaborated with the European Bank for Reconstruction and Development (EBRD) and the Standing Conference of Towns and Municipalities (SCTM) to leverage public funding resources and boost private investment. The project aims to establish financial frameworks that showcase the use of energy efficiency and renewable energy investments, which can be adopted on a broader scale, including an augmentation of financing from private entities.