Speaking to EUpravo Zato, he underlined that Serbia's aim is to accelerate reforms and thereby move closer to the EU, while the Bank will assist in building a resilient and sustainable future. The EIB is one of the leading international financiers in the Western Balkans, having provided €11 billion to the region since 2010.
Damjan Sorel, the head of the EIB Regional Hub for the Western Balkans in Belgrade, took on this role amid a complex global geopolitical situation.
According to him, the current geopolitical fragmentation and growing uncertainty have underscored the importance of strengthening strategic cooperation between the EU and the region, as well as deepening trade and investment flows.
A Significant Boost from the Growth Plan for the Western Balkans
As Sorel explained to EUpravo Zato, the region is witnessing a significant boost brought by the European Commission’s new Growth Plan, aimed at accelerating market integration and the enlargement process. The plan is expected to help the region close the current GDP per capita gap, which stands at 30–35% of the EU average.
Over its more than 45 years of operations in the Western Balkans, the European Investment Bank (EIB Global) has consistently supported projects that bring multiple benefits to citizens, such as renovated roads, hospitals, schools, new jobs, and improved connectivity between countries in the region.
"Our current focus is on areas of strategic importance for long-term resilient growth, including the green transition, connectivity, digitalization, climate action, and human skills. Specifically, we plan to increase financing for renewable energy and energy efficiency projects, while modernizing distribution and transmission infrastructure. Additionally, we will enhance support for a just transition, as well as for adaptation to and mitigation of climate change impacts. We are also committed to improving road safety through the rehabilitation of existing infrastructure and transitioning to cleaner modes of transport such as railways and waterways. Regarding the education sector, EIB Global-funded projects are helping digitize over 3,800 schools and modernize dual education in Serbia, reconstruct and digitize schools in Montenegro, and improve existing infrastructure in Bosnia and Herzegovina," Sorel explained.
Accelerating Reform Agendas and Aligning with EU Standards
When asked about the main challenges he foresees in the Western Balkans, particularly in relation to Serbia, the head of the EIB Regional Hub in Belgrade stated that, although the Western Balkan countries are experiencing solid GDP growth, the implementation of reform agendas and alignment with EU standards need to accelerate, alongside improvements in the investment and business climate.
"It is crucial to continue with strategic investments to reduce the significant infrastructure gap in the region and address obstacles to development, such as the shortage of skilled labor and energy insecurity. A faster energy transition and implementation of the EU’s Green Agenda will ensure reliable and sustainable energy supplies, which are affected by global conflicts, climate change, and the anticipated introduction of the EU Carbon Border Adjustment Mechanism. For instance, Serbia’s energy intensity is four times higher than the EU average. Adopting an appropriate regulatory framework, mobilizing investments from the private sector, modernizing energy infrastructure, optimizing electricity pricing, and introducing energy efficiency measures are some of the steps that need to be taken. In this regard, we are already seeing many positive developments," Sorel noted, adding that further efforts can improve the quality of public administration and the rule of law.
According to him, prudent fiscal policy is crucial for public debt sustainability and a stable macroeconomic environment.
"Since its establishment in 1958, the Bank has supported every wave of EU enlargement"
The new European Commission has repeatedly emphasized its goal to prepare at least one or two Western Balkan countries for full EU membership by the end of this decade. How will the EIB support countries awaiting European integration?
"Since its establishment in 1958, the Bank has supported every wave of EU enlargement. However, accession ultimately depends on the countries themselves, which now have the opportunity to leverage the momentum surrounding the enlargement process and the new Growth Plan to consistently implement their reform agendas. We welcome the European Commission’s goal of bringing as many countries as possible into full EU membership and remain committed to supporting Serbia and the region on this path. As an EU bank and institution, EIB Global aligns its operational goals with EU policy, working closely with its field delegations. This approach is also reflected in the Western Balkans Investment Framework, which identifies and develops strategic investments through a combination of financial and technical support," he said.
He explained that since 2010, the Bank has provided over €11 billion to Western Balkan countries, amounting to approximately 8% of their GDP.
"Our investments and technical assistance have helped integrate EU norms and standards into the policies of these countries even before their accession to the EU. In practice, this includes investments that ensure a cleaner environment, improved water supply, smart and sustainable transport solutions, and better access to finance and jobs for the private sector, including vulnerable social groups. Additionally, through our investments, we bring EU standards to local markets, such as transparency and fair, open competition in procurement processes. Furthermore, all projects we finance incorporate EU social, climate, and environmental standards," he said.
Continuous Support for Green Agenda Goals
The EIB has placed particular emphasis on supporting Green Agenda goals, decarbonization, environmental protection, and improved connectivity.
When asked what support Serbia can expect from the EIB in these areas, Sorel said that all these sectors are significant for the Western Balkans and Serbia, particularly for ensuring a resilient and sustainable future.
"One of the leading connectivity initiatives in Serbia is the construction of the Belgrade-Niš railway section on Corridor X, implemented with €2.2 billion in financial support from Team Europe. Thanks to these funds, train travel between these two Serbian cities will take less than two hours at speeds of up to 200 km/h. In partnership with the World Bank, we are also financing the improvement of efficiency and safety on waterways along the Sava and Danube rivers," Sorel said.
He added that in the energy sector, EIB Global is supporting the modernization of existing facilities to enhance their efficiency, reliability, and capacity.
"This includes the reconstruction of hydropower plants in Serbia and the introduction of smart meters (a project we are co-financing with the EBRD), which will enable optimized consumption and reduced electricity losses. We also plan to increase support for renewable energy production capacities across the region to enhance supply security, improve air quality, and decarbonize local economies," he explained.
Support for Digitalization and Education
To harmonize digital markets and regional connectivity, the Bank employs a comprehensive approach to financing the digital economy, ranging from investments in telecommunications infrastructure to digital services.
"In Serbia, we are supporting the digitalization of schools and businesses, as well as the upgrade of digital networks and the introduction of 5G. Investments in water supply and sewerage infrastructure are also among our priorities in Serbia to enhance the country’s climate resilience," the EUpravo Zato interviewee said.
He added that through dedicated credit lines and initiatives such as the EU for Green Agenda in Serbia, EIB Global encourages companies to adopt renewable energy, environmental protection, and energy efficiency projects.
He considers this particularly important to help small and medium-sized enterprises adapt to climate change while maintaining competitiveness in the global market.
Support for Companies and Small and Medium-Sized Enterprises
You mentioned that the EU Bank, as a long-term partner in the region, has consistently provided financial and technical support for building key infrastructure and strengthening operational capacities. What can we expect in this context in the coming period?
"Together with the European Commission, the Western Balkans Investment Framework, and our partners, EIB Global will continue to support strategic projects through loans and grants, as well as technical assistance for the development, supervision, and implementation of projects. The JASPERS advisory team has played a key role in preparing important strategies, plans, and investments, while strengthening the capacity of regional teams for project implementation. This support has helped countries improve their connectivity, climate action, and processes related to EU accession. Since 2011, our experts have assisted in preparing projects worth €9 billion in the region. Last year, we announced that we would triple our advisory support for the Western Balkans and Turkey to as much as €20 million," Sorel emphasised.
According to him, the Bank also provides technical assistance for the implementation of new financial products in the private sector to help companies introduce energy-efficient practices, digitalise their operations, and adopt inclusive employment strategies.
"For instance, in 2020, we launched an incentive-based loan for small and medium-sized enterprises in Serbia to promote inclusiveness and women’s entrepreneurship. Since the financial incentive included in this credit line is performance-based, our technical experts help companies define and achieve goals in terms of inclusive employment and long-term retention of people from vulnerable social groups. Together with all our partners in the region, we are committed to further developing modern infrastructure and strategies that ensure sustainable development, regional integration, and better prospects for everyone in the Western Balkans," concluded Damjan Sorel, Head of the EIB Regional Hub for the Western Balkans in Belgrade.