Belgrade, May 28, 2021 - For Serbia to recover economically from the consequences of the COVID-19 pandemic and successfully respond to the challenges posed by climate change, greater and more efficient financial support to companies in the private sector is necessary.

This is one of the conclusions of the Green Recovery Study , which was presented today at the Mixer Festival by the Delegation of the European Union and the United Nations Development Programme (UNDP). The aim of the study was to assess current possibilities for financing the "green" recovery, i.e., the transition of Serbian companies to more energy efficient and environmentally friendly business models.

The study examined the practical experiences of micro, small, and medium enterprises (MSMEs), which are the backbone of the Serbian economy, as well as those of the banking sector and international financial institutions. The results indicate that many MSMEs in Serbia are willing to invest in “green” business models yet face a number of obstacles. These include a lack of funding, a lack of skills for and information on green technologies and funding opportunities, and overly complicated legal procedures.

At the same time, micro, small, and medium-sized enterprises are particularly vulnerable to the economic consequences of the pandemic, as they are unable to withstand sustained periods of revenue loss. Due to liquidity problems and efforts to preserve jobs, some companies have already postponed and reduced much-needed green investments, jeopardizing their competitiveness in regional and global markets, especially in Serbia’s primary export market - the European Union.

Regarding access to financing, the European Green Deal will provide incentives to Serbia through the Green Agenda for the Western Balkans. Through this economic and investment plan, the European Union has allocated 9 billion euros of funding[DSR1]  to the countries of this region for the green transformation of both the economy and the public sector.

“Green is a key word for growth, jobs, and health. The COVID-19 pandemic is a tragic reminder of just how much human health is related to the health of the planet. The economic recovery and the transition to a sustainable economy proposed by the EU should go hand in hand - this is what we call the green recovery. This is a great challenge, but also a huge opportunity. Investing in environmental protection and climate action is an investment in the future. If we do nothing, the price of climate change that the economies of countries and society as a whole will have to pay will be far higher than the costs of fighting against climate change now," declared Ingve Engstrom, head of the EU Delegation to Serbia.

"Due to the impacts of the pandemic, the world is now facing an economic recession and accelerating climate change at the same time. It has been shown that the still predominant linear business models have a devastating effect on nature. Future economic growth must no longer be based on the overuse of resources, and energy production should rely as little as possible on fossil fuels. In short, to increase the resilience of our economies and societies to future challenges - we need a green recovery. This is why now is the right time to invest in green business and green transformation in Serbia. These investments should come from all sectors, including public and non-profit, but there are no solutions to environmental issues and climate change without the private sector," asserted Francine Pickup, the UNDP Resident Representative in Serbia.

The benefits of increasing green investment would be manifold, including economic development and job creation, greater opportunities for innovation and new markets, reduction of economic and social inequalities, and reduction of costs associated with pollution and environmental degradation.

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The study “Scaling-Up Green Finance for the Private Sector in Serbia in the Post-Pandemic World," conducted jointly by the Delegation of the European Union to Serbia and the United Nations Development Programme (UNDP) in Serbia, is available here.