The EBRD is helping to improve the quality of water services in Serbia with an €11 million sovereign guaranteed loan for the expansion of the water supply infrastructure in the City of Subotica, in the northern part of the country.

As a European Union candidate country, adopting the EU Environmental policy is one of Serbia’s key priorities. It is estimated that aligning Serbia’s water infrastructure sector to EU standards would require investments of approximately €5.5 billion.

Subotica is the country’s fifth largest city, with a population of 140,000. It is the first major city that has constructed a wastewater treatment plant in line with EU directives. Built with the support of EBRD financing, the plant became operational in March 2012.

Although improvements have been made in the Subotica water sector, only 40 per cent of Subotica’s residents are currently connected to the sewerage system. The new investment will enable the City of Subotica to fully close the wastewater cycle in its territory by extending the wastewater collection and sewage network.

The project will connect about 12,000 new consumers to wastewater systems, extending the overall sewage coverage to close to 60 per cent of the population. It will also help prevent the pollution of Palic Lake, one of the top five tourist destinations in Serbia situated eight km to the east of Subotica.

The project is co-financed by grants from the European Western Balkans Joint Fund. Additional technical co-operation for the preparation of the project has been provided by the government of Austria.

“This new EBRD investment will bring important improvements to the quality of life in Subotica and will help reduce the pollution in the area. The project will also help the public utility company in Subotica to improve its operational efficiency and become a financially sustainable, commercially oriented enterprise, setting an excellent example for other municipalities in Serbia,” said Lin O’Grady, EBRD’s Deputy Director of the Municipal and Environmental Infrastructure Team.

The Mayor of Subotica Saša Vučinić has emphasized that Subotica is now one of the very few cities in Serbia that has wastewater treatment facility. He said that this project is of enormous importance for further planning and urban development of Subotica because it sets the base for inclusion of almost half of the city into the collector and sewerage network which is as not the case at the moment, given that capacity of the plant is such that the city can plan its development projects with great certainty and confidence.

“This project has a significant importance also for providing sufficient water volume, pressure and water quality from the public water supply system. The construction of the so-called “water factory” on the second city complex - water intake 2 will provide potable water supply to entire population of Subotica, Palić and the suburbs whose quality will fully comply with the local and EU rules and standards”, said the Mayor.

Since the beginning of its operations in Serbia, the EBRD has committed over €3 billion in various sectors of the country’s economy, with a total value of some €6 billion.