Serbia's Minister of Economy and Regional Development Nebojsa Ciric and head of the German development bank (KFW) office in Serbia Juergen Welschof signed a EUR 25 million funding contract meant to solve water supply and sewage issues in six towns in southern Serbia.

The signing allows for the start of the second stage of the programme focusing on water supply and sewage in mid-sized municipalities in Serbia, which is planned for June 2012 and includes Leskovac, Vranje, Pirot, Aleksinac, Jagodina, and Trstenik.

After the signing, Ciric stated the money had already been secured, adding that EUR 17.5 million would come from a favourable loan, while EUR 7.5 million would come from government donations and that new water supply systems could be expected soon in all of the towns.

The signing completes a programme worth EUR 90 million, he noted, adding that programmes 3 and 4 were in preparation, which would deal with water supply in 8 municipalities and sewage in 3.

Programme 2 complements Programme 1 water supply and sewage in mid-sized cities in Serbia, which referred to Smederevo, Vrsac, Loznica, Pancevo, Sabac, Kraljevo and Sombor.

Ciric thanked the German government for its support, stressing that Germany had assisted Serbia with EUR 1.2 billion since 2001.

The contracts were signed on behalf of the municipalities by their mayors and heads of utility companies.

Charge d'Affaires at the German embassy in Belgrade Hans-Ulrich Suedbeck said the signing was a new stage in the realization of the joint water supply programme in Serbia and that Germany would stay a reliable partner.

So far, Germany has provided EUR 111 million for water supply projects and EUR 31 million for waste water projects, he said.

Welschof expects the work to be in full swing starting Autumn.

KFW and the Ministry of Economy and Regional Development's National Investment Plan started the implementation of the programme in 2001. Originally, it included only four large cities - Belgrade, Nis, Novi Sad and Kragujevac.