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German development aid to Serbia EUR 157 million

20. November 2014. |

Serbian and German government officials have signed on Thursday the protocol on development cooperation, envisaging a total of EUR 157 million for development projects in Serbia. Development loans provided under favorable terms amount to EUR 138.5 million, including the EUR 70 million to be guaranteed by the Serbian government, while the remaining EUR 18.5 million are grants.The aid will be used to fund projects in the fields of water supply, waste water treatment, energy and sustainable economic growth.

Director of Public Debt Administration Branko Drcelic stressed that the loans are granted under favorable terms, and that the state will either use the funds directly or provide loan guarantees for public companies or local authorities. As an example, Drcelic pointed to the energy efficiency loan granted recently at a fixed interest rate of 2.1 percent, with a grace period of three years and a ten-year period of repayment.

Deputy German Ambassador to Serbia Michael Hasenau said that the protocol signed on Thursday shows potential for future cooperation.Germany is the largest bilateral donor to Serbia, said Hasenau, stressing that his country supports Serbia on its road to EU membership.

 Christiane Boegemann-Hagedorn, Deputy Director General for North Africa, Middle East, South-Eastern and Eastern Europe and Latin America at the German Federal Ministry for Economic Cooperation and Development, said that the protocol is a continuation of the cooperation established between the two countries over the past 15 years.

The aid will be used to fund projects in the fields of water supply, waste water treatment, energy - primarily energy efficiency and renewable energy sources - as well as projects in the area of sustainable economic development, as the objective is to create new jobs, she said.

 A new incentive program for economic development and job creation will be launched in cooperation with the Serbian government, said Boegemann-Hagedorn, adding that incentives will also be granted in secondary vocational education.

A total of EUR 1.45 billion in development aid has been intended for the development cooperation between Serbia and Germany in the period from 2000 to 2013.The German development aid to Serbia, in the form of donations and loans, is realized through financial and technical support.

As Serbia's largest bilateral partner and one of its most significant economic partners, Germany feels that it is very important for Serbia to continue its EU accession process, as well as to define the future course of bilateral cooperation, the German Embassy in Belgrade said in a release.

The European Commission's report has shown that reforms are still needed in Serbia and pointed to topics that the reforms should focus on. These are the topics that Germany will center its attention on in its bilateral support to Serbia.