The Serbian government has approved a loan agreement with German development bank KfW totaling €135 million. The financing is intended to support reforms in the energy and environmental sectors. The agreement was signed on July 18, 2025, and is described as the second phase of a joint development initiative involving the World Bank and the French Development Agency.
The loan terms specify that funds will not cover taxes, public levies, or customs duties. Disbursement is set to occur in a single tranche after all preconditions are met. This structure links release of funds to completion of the required conditions under the agreement.
Repayment schedule and fees
Serbia will repay the loan through 17 equal installments of €7.94 million each. Payments are scheduled from May 15, 2027, through May 15, 2035. A non-utilization fee of 0.25% applies to any undrawn funds.
The non-utilization fee is payable semi-annually. The repayment arrangement and fee terms are set out in the approved agreement with KfW.
KfW consultations on reform implementation
The agreement includes regular consultations between KfW and Serbia. These consultations are intended to review progress on sector reforms. They also aim to ensure proper implementation of the program financed under the loan.