Connecting The Region 2024 no. 2

Connecting The Region

Connecting The Region

Shif ting to Green

CHALLENGES

The region’s countries share the same environmental challenges INTEREST Governments must prioritise public interest in green transformation

COOPERATION

Cross-border environmental collaboration is essential

Shif ting to Green

CHALLENGES

The region’s countries share the same environmental challenges

INTEREST

Governments must prioritise public interest in green transformation

COOPERATION

Cross-border environmental collaboration is essential

EDITOR IN CHIEF: Neda Lukić n.lukic@aim.rs

DESIGN:

MIDECAMEDIA

COPY EDITOR: Mark Pullen

TRANSLATION & EDITING:

PULLEN EDITORIAL

CONTRIBUTORS:

Ljubica Gojgić Branimir Jovanović Adriano Milovan Armin Zeba Dejan Azeski Geri Kolgega Luan Hasanaj Željka Radulović Novica Mihajlović

PHOTOS: Zoran Petrović

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FINANCE: Dragana Skrobonja finance@aim.rs

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06 Enabling Green Transition in the Balkans

BRANIMIR JOVANOVIĆ

Economist at the Vienna Institute for International Economic Studies (wiiw)

08 Montenegro to Join the EU by 2028

JAKOV MILATOVIĆ

President of Montenegro

16 Shared Values and Commitment

LEENA YLÄ-MONONEN

Executive Director of the European Environment Agency

18 Huge Potential for Collaboration

MAJLINDA BREGU

Secretary General of the Regional Cooperation Council

20 Very Clear Tasks

BOJAN KUMER

Slovenian Minister of the Environment, Climate and Energy

21 Hard Work and Excellence

ROK CAPL Director, SPIRIT Slovenia

22 The Green Deal is a Big Deal

NOVICA MIHAJLOVIĆ Journalist

24 Highlights

26 We Can’t Do Without European Support

DUBRAVKA ĐEDOVIĆ HANDANOVIĆ

Serbian Minister of Mining and Energy

28 Pacta Sunt Servanda!

ALEKSANDAR KOVAČEVIĆ

Senior Visiting Research Fellow at Oxford Institute for Energy Studies (OIES)

30 ESG Principles Are Vital

ALEKSANDAR LJUBIĆ

Executive Director of the Foreign Investors Council of Serbia

34 Running Late, but Catching Up

DRAGAN ŽUPANJEVAC

Retired Ambassador, Former Permanent Representative to the UN Environment Programme in Nairobi, Kenya

36 Expanding Real Estate Horizons

NEMANJA DROBNJAK

COO of CBS International, part of the Cushman &

38

KRESHNIK

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VIKTOR

The Region

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BRANIMIR JOVANOVIĆ

Economist at the Vienna Institute for International Economic Studies (wiiw)

It’s easy to feel despondent when thinking about the green transition in the Balkans. The energy required to generate one dollar of GDP is significantly higher here than in EU countries—for instance, Serbia’s energy consumption is nearly double that of Austria’s. The situation with CO2 emissions per unit of GDP is similarly alarming, with emissions in Bosnia and Herzegovina, for example, three times higher than in Austria. The primary culprit? Fossil fuels, of course. Their share in the region’s energy mix hovers at around 80%, with Albania being the notable exception where that share falls below 60%.

The heavy reliance on cars also contributes to this issue, as does the electricity sector’s dependence on coal.

Only Albania, Croatia and Montene-

Enabling Green Transition in the Balkans

Political reluctance to pursue green transition across the region is driven by project duration, fear of consequences and ideological barriers. However, with strong leadership, public investments and inclusive planning, this can become an opportunity

gro generate their electricity predominantly from renewables. Despite the vast untapped potential of renewable energy, most countries in the Balkans are net importers of electricity—with Albania and Bosnia and Herzegovina standing out as the exceptions. The region is blessed with natural resources, boasting mighty rivers, an abundance of sunshine and strong winds. And yet, the exploitation of these gifts has been markedly unsuccessful.

NOT EVERYTHING IS SO GLOOMY

Upon closer inspection, though, the situation in the Balkans doesn’t look entirely bleak. CO2 emissions per capita in the region are actually much lower than in EU countries. All Balkan nations are better that Austria in this regard, with some - like Albania - boasting emissions four times lower than Austria’s. This can certainly be attributed to the lower level of economic activity in the region, but still, on the whole, the average Balkan resident has a smaller environmental footprint than the average EU citizen.

Moreover, the region also performs pretty well in the realm of environmental taxes. Serbia, for instance, collects almost twice as much in environmental taxes as Austria, with the majority of other Balkan countries also surpass-

ing that Alpine nation in this respect. Furthermore, the Balkan region is home to notable green transition success stories. Albania stands out, as it generates all its electricity from renewables and operates as a net energy exporter, achieving the lowest CO2 emissions per capita anywhere in Europe. Montenegro declared itself the world’s first ecological state as far back as 1991, including this in its constitution long before the green transition became a mainstream topic in the Western world. Not just that, the country also expanded its renewable energy capacity in recent years, developing several wind farms.

WHAT IS TO BE DONE?

The stories of Albania and Montenegro shed light on what is to be done to make green transition work in the region. The hydropower plants that provide the majority of electricity for these countries and are responsible for their favourable standings in terms of the green agenda were built 40 to 60 years ago during “dark communist times”. If such feats were achievable back then, with the comparatively rudimentary technology of the era, why should we not be capable of similar accomplishments today, with the advancements the world has since witnessed?

Every country in the Balkans possesses the capacity to construct several large hydroelectric plants, which could replace a significant portion of the energy currently generated from coal. With some areas receiving 2030% more sunlight than Austria annually, the potential for solar energy production is also substantial. All countries can also invest in public transport and railways, thereby reducing the use of cars.

This potential must be utilised in such a way that it benefits everyone, not just a small group of people. Natural resources like rivers, sunshine and wind belong to everyone, and must not be exploited for the profits of a few. The key role in the green transformation must thus be played by the governments, not by the private sector. While there’s room for public-private partnerships, they must be designed in a fair way, protecting the public interest and preventing the privatisation of public goods.

And, again, there is a good example in the region from which everybody can learn. Serbia has led the way in Europe on public investments as a percentage of GDP for several years, with figures reaching as high as 7%. While most of these investments have not been green, that can easily be changed. And if Serbia is able to do it, why wouldn’t others follow suit?

THE MISSING INGREDIENT: POLITICAL WILL

Returning to the complex world of realpolitik, one can’t help but wonder —if the rationale is so straightforward, why isn’t there a bigger push towards renewable energy and green transition in the region? I see three main reasons that drive back political will.

The first is the inherently long-term

POTENTIAL

Each Balkan country has the potential to build large hydroelectric plants, thus offering a viable alternative to coalbased energy generation.

nature of energy projects. These projects take years to complete, meaning that the politicians who initiate them are unlikely to be in office to witness their completion. As a result, their successors, potentially from opposing parties, might reap the benefits and rewards. This dynamic creates a significant disincentive for politicians to commit to substantial energy projects.

The second reason is fear of the green transition. Politicians are afraid that transitioning away from fossil fuels could lead to adverse outcomes: the closure of existing thermal power plants leading to widespread job losses, increased taxation to meet EU standards, and the potential for green investments to disproportionately benefit foreign companies and other coun-

it as an economic opportunity. All relevant studies have found that the green transition increases GDP. By investing in green projects, you are not only solving environmental problems, you are also bringing economic development.

WHAT ABOUT REGIONAL COOPERATION?

Finally, we must understand collectively that the green transition provides an opportunity for the Balkan countries to improve their relations and further regional cooperation. Given the substantial financial and technical demands of energy projects, collaboration among nations could prove beneficial. Joint efforts can lead to shared energy resources that are particularly useful in situations where a

CROSS-BORDER

The green transition fosters regional cooperation among Balkan nations on energy projects, highlighting energy’s crossborder nature.

The Balkan region is rich in natural resources like rivers, sunlight and wind, but their exploitation has been largely unsuccessful

tries. These concerns are valid, but not inevitable. With governments taking a strong lead, robust public investment, inclusive planning that engages citizens and workers, and the active participation of domestic companies, the green transition can be turned from a threat into an opportunity.

The third barrier is ideological. There’s a discernible reluctance among some right-leaning politicians and parties to embrace the green transition, often rooted in scepticism towards environmentalism or outright denial of climate change. The discourse can sometimes parallel that of conspiracy theories. Yet, even those who are sceptical about the severity of climate change or the necessity of a green transition might be persuaded by viewing

FEARS

country’s energy surplus can mitigate another’s deficit. The nature of energy, in terms of transcending national boundaries, should serve as a reminder to politicians of the triviality of the issues they constantly raise.

Politicians, business leaders, academics, pundits and journalists must all acknowledge that, despite our borders, past conflicts and the myriad differences that divide us, we all share the same planet. Should aliens visit us, our squabbles would seem incomprehensible to them. Yes, our problems will disappear if we destroy the planet, but that would also mean us disappearing. Our disputes sometimes seem like arguing about which TV channel to watch as our house burns around us. ∙

Politicians fear shifting from fossil fuels due to potential plant closures, job losses, higher taxes and foreign dominance in green investments, but these concerns aren’t inevitable.

INTEREST

Governments should lead the green transformation, prioritising public interest over private profit and ensuring fair public-private partnerships to prevent the privatisation of public goods.

By Ljubica Gojgić

Montenegro to Join the EU by 2028

What we want from the EU Growth Plan is for it to help us accelerate our socioeconomic convergence with the Union. We believe that we will succeed in this through the diversification of our economy and an ambitious plan for the development of our transport and energy infrastructure

JAKOV MILATOVIĆ

President of Montenegro

I n Montenegro, which has advanced the most in the region when it comes to EU integration processes, they are hopeful that the results achieved will provide the basis for the country to quickly advance towards full membership.

Meanwhile, regional initiatives don’t represent an alternative to membership, but rather preparation for faster and more successful integration, says Montenegrin President Jakov Milatović in this interview for Connecting The Region Magazine.

Despite supporting regional interconnectivity, Montenegro doesn’t participate intensively in all region-

al initiatives, such as the Open Balkan initiative. What do you consider as being the most useful measure when it comes to connecting the Western Balkan countries?

― Montenegro is a leader in European integration and I often emphasise that I advocate for the regatta principle, i.e., for integration on the basis of the individual merits of each country and the meeting of membership criteria. This sends a clear message that it pays off to be committed to reforms.

I will repeat that the European Union story emerged out of regional economic interconnection, which is why it isn’t an alternative to the EU, but rather a kind of preparation for the countries of the region to join the free European single market.

Supporting this claim, I recently signed decrees on the adoption of laws that confirm the so-called Berlin Agreements and represent part of the obligations emerging from the Berlin Process, and passing them will contribute to accelerating our country’s European journey, but also to improving regional cooperation.

Furthermore, Montenegrin citizens will be able to realise numerous benefits resulting from the implementation of these agreements.

Where do you see Montenegro’s place in the EU’s Growth Plan for the Western Balkans and what are your key assets?

― We were able to hear projections at the EU-Western Balkans Summit, held late last year, that a common regional market for the Western Balkans could increase the GDP of our countries by ten per cent. As someone who spent many years working at international financial institutions and observed the EU integration of Balkan member states, I really believe in such an outcome.

The aim of regional cooperation is subsequent better integration with European markets, and the Growth Plan is important precisely in order to speed up those processes. That’s why this Plan is hugely significant for realising the economic potential of our region.

What we want from the Plan is for it to help us accelerate our socioeconomic convergence with the EU. We believe that we will succeed in this through the diversification of our economy and an ambitious plan for the development of our transport and energy infrastructure

Our plan is to complete the highway through the north of the country that will connect us with Serbia and the markets of the region and Central Europe. We also want to build the Adriatic-Ionian highway, which will represent our bridge to Western Europe and will additionally connect us with our neighbours in Croatia, Bosnia & Herzegovina and Albania.

Moreover, we have already received significant funding to improve railway infrastructure in order for us to finally realise the massive potential of the Port of Bar and restore its strategic importance, and we expect additional funds to complete this project through the Growth Plan.

When it comes to energy, we expect the doubling of the submarine power

EU MEMBERSHIP

I often emphasise that I advocate for the regatta principle, i.e., for integration on the basis of the individual merits of each country and the meeting of membership criteria.

cable connections between Montenegro and Italy, and for our country to become the energy hub of the Western Balkans. I’ve discussed this topic with our Italian partners, but also with European financial institutions, such as the EBRD and the EIB, which we expect to provide us with even greater support.

There is a lot of talk in the EU about the Green Agenda. When it comes to this region, it includes – among other things – transitioning from electricity production based on coal to other energy sources. How much and what is needed to complete that transition?

― As a result of us having a coal-fired thermal power plant in the north of the country, Montenegro has been heavily dependent on coal in previous dec-

tricity, transitioning from coal to alternative sources is a complex process requiring careful planning, infrastructure changes, investments and political support. In this context, our priority is to improve infrastructure in order for us to realise the potential of our country to its full capacity and create a healthier environment for our citizens. It is also crucial that Montenegro has a fully developed regulatory framework in this area, as well as the support of international partners in facilitating the transition to cleaner energy.

It is necessary for the best international practices to be implemented in Montenegro, which can contribute to the country’s economic development through tangible solutions. That’s why I believe that it’s also crucial that we have the support of partners with enviable experience in green transition.

CHAPTERS

I am certain that it’s possible to conclude all negotiation chapters by year’s end 2026

The eastward opening of the EU is good news for the entire Western Balkans, while it also represents a significant step towards ensuring the prosperity, peace and stability of Europe as a whole

ades, particularly in the field of electricity production. This certainly had environmental repercussions, which is why it was necessary to develop a strategic approach to gradually eliminating our major dependence on coal and shifting to renewables.

Our country has a wealth of natural hydro and wind potential, but we also enjoy a large number of sunny days throughout the year, which is why the country is favourable when it comes to new ways of producing energy and it comes as no surprise that domestic and foreign capital is interested in investing in renewables in our country.

When it comes to generating elec-

In this sense, I would single out the willingness of Slovenia, which is a traditionally friendly country, to provide Montenegro with all essential support in this matter. This has been confirmed once again by President Nataša Pirc Musar, who is our guest at the Sustainable Development Summit in Montenegro. It is worth noting that Slovenia is a leader of the wider region when it comes to sustainable development and that it represents a source of inspiration for the region’s other countries.

How do you view the concern of citizens across the entire region

SUSTAINABILITY

It is essential to respect the highest standards of environmental protection and social responsibility in order to truly contribute to sustainable economic development.

CONNECTION

Our plan is to complete the highway through the north of the country that will connect us with the markets of the region and Central Europe.

that the search for new sources of energy could turn large swathes of the Western Balkans into mines, with disastrous environmental consequences?

― Montenegro is the first country of the region to have introduced –three decades ago! – an ecological aspect to its constitution, thus placing care for the environment at the heart of the country’s economic and social development.

consideration.

With the proper management of policies and strategies, these activities could result in economic advancement through the creation of new jobs, the attracting of investment and the encouraging of local development. Likewise, these activities could prove significant when it comes to diversifying the economies of the region and reducing their depend-

When it comes to energy, we expect the doubling of the submarine power cable connections between Montenegro and Italy, and for our country to become the energy hub of the Western Balkans

Furthermore, on its EU accession journey, Montenegro is committed to UN Agenda 2030 and achieving the Sustainable Development Goals, as we consider these two processes as being inextricably linked.

The concern of the region’s citizens regarding the search for new energy sources is justified, given the potential negative environmental impact. On the other hand, potential economic benefits and development opportunities should also be taken into

terests and environmental protection, which I consider as being crucial to the region’s longterm prosperity.

You won Montenegro’s presidential election on a pro-European agenda. How do you view the pace of Montenegro’s European integration?

― I am certain that it’s possible to conclude all negotiation chapters by year’s end 2026 and to use 2027 for EU member states to ratify our accession, thus fulfilling our primary foreign policy objective of gaining full EU membership by 2028.

This view is today shared by the majority of our strategic partners. Representing a prerequisite for such a European integration dynamic is the implementing of reforms in key areas, first and foremost in the area of the judiciary, electoral system, economy, public administration and ecology.

I would remind your readers of the significant political transformation that occurred in Montenegro less than four years ago with the first democratic transition of power in the history of our country, and the process of democratising our society continued with the outcome of the spring 2023 presidential elections.

taking on the presidency, it has become evident that an equally strong will also exists in Brussels.

Also testifying to this claim are the facts that we are among the most economically advanced EU candidate countries, that we have been using the euro for more than two decades, that our foreign and security policy has been fully aligned with the EU for more than a decade, that we are a country that has no significant unresolved issues with our neighbours and promotes good neighbourly relations, and that we are a country that has opened all negotiation chapters with the EU and is a NATO member.

I believe that Montenegro’s EU accession would send a clear message that reforms pay off and that the enlargement process is still alive.

Will Montenegro or Ukraine become an EU member first? Do you agree with the view that the opening of the EU eastwards also represents good news for the Western Balkans?

ence on traditional industries.

However, it is essential to respect the highest standards of environmental protection and social responsibility in order to truly contribute to sustainable economic development. This includes applying best practices to minimise negative environmental impacts, but also ensuring the just distribution of economic gains among local communities.

It is ultimately the obligation of decision-makers to maintain a balance between economic in-

After demonstrating our democratic maturity in elections, a significant advance was achieved in terms of strengthening the rule of law and the independence of institutions by appointing new people to leading positions in the judiciary and the Central Bank, with broad political consensus in the Parliament.

EU accession is supported by more than 80 per cent of Montenegro’s citizens and we finally have the strong political will required to conclude the ten-year accession negotiation process. On the other hand, during my own intensive diplomatic activity since

― As I’ve said, Montenegro has a clear foreign policy objective: full membership in the EU by 2028. On the other hand, a complete Europe is a guarantee of the security, stability and competitiveness of the continent, which is why every advance of the candidate countries pleases us.

We provide Ukraine with continuous support and assistance and, among other things, have received – compared to the size of our population – the most Ukrainian citizens among those who were forced to flee their country because of the war.

The eastward expansion of the EU is, of course, good news for Montenegro and the entire Western Balkans, while it also represents a significant step towards ensuring the prosperity, peace and stability of Europe as a whole. ∙

Committed to the Struggle for a Green Future

Albania is a country of many contradictions, one of which relates to its approach to climate change, sustainability and green policies. On the one hand, the country almost exclusively uses hydropower and virtually no gas, yet it has no recycling programmes whatsoever. It has the fewest cars per capita in Europe, while at the same time needs to exert efforts to encourage citizens to switch from using wood and electric heaters to central heating.

Producing electricity with zero emissions enables Albania to work on the decarboni-

sation of other sectors, and the country is working increasingly to implement measures to improve its green policies as it approaches EU membership.

Albania’s commitment to sustainable energy became even more pronounced following the late 2021 adoption of its National Energy and Climate Plan, thanks to which significant progress has been achieved, as reflected in the prioritising of renewable energy sources, reduced greenhouse gas emissions and the encouraging of regional cooperation in pursuing a greener future.

BOSNIA-HERZEGOVINA

Clean Air is the Main Goal

When energy efficiency and sustainability began being discussed more comprehensively in Bosnia & Herzegovina some 10 to 15 years ago, few people even knew what that referred to and what reflected the importance of these factors. The awareness of the population has since evolved significantly, although the people still fail to recognise most of the benefits of energy efficiency, primarily due to the low price of dirty energy, low living standards and a lack of incentives and adequate legislation.

Progress has been achieved with the adoption of the Green Agenda for the Western Balkans, with which the transition from a traditional economic

model to a sustainable economy has been encouraged. With the signing of this document, the countries of the region, including Bosnia & Herzegovina, committed themselves to working towards Europe becoming climate neutral by 2050, while an additional incentive was created when the country achieved EU membership candidate status in December 2022, implying alignment with EU norms in all areas, including sustainability. The first steps in this direction should be the resolving of the problems of the country’s two biggest air polluters - the Kakanj Power Station and the Mittal steel plant in Zenica – for which it will receive assistance from its European partners.

Implementing All EU Directives Consistently

As an EU member state, Croatia is fully committed to the European Green Deal, which should result in Europe becoming the world’s first carbon neutral continent by 2050. Croatia thus has generous European funds at its disposal, which represent invaluable assistance in achieving its goals. In following EU directives, Croatia tailored its development strategies to the principles of sustainability, while also placing an emphasis on tangible measures with which it will achieve the goals of increasing energy sustainability and use of renewable energy sources, as well as decarbonising all energy consumption and production sectors.

With a view to 2050, the Energy Development Strategy of the Republic of Croatia until 2030 envisages a significantly higher share of energy production from renewable sources and the reduction of greenhouse gas emissions, as well as progress on the Integrated National Energy and Climate Plan for the 2021-2030 period. Current assessments show progress on reducing greenhouse gas emissions, improving air quality and the cleanliness of the environment and a positive environmental impact of the economy. However, it has also been noted that insufficient progress has been achieved in terms of green energy production and recycling.

Pioneering the Use of Solar Energy for Heating

Despite not being a signatory to the majority of international agreements on climate change, green energy and sustainable business, Kosovo has recognised the importance of these concepts in its efforts to join the EU. Kosovo’s aspiration to apply ESG pillars, despite being at an early stage, is considered a strategically sound decision, because respecting these principles brings additional investment, environmental and social progress and an enhanced global reputation. Apart from the implementation of ESG principles helping Kosovo position itself as an attractive destination for responsible investments, it also

enables the proactive overcoming of environmental and social challenges and the problems of environmental pollution, encouraging investments in energy efficiency, promoting social inclusion etc.

With its new energy strategy for the 2022-2031 period, Kosovo has committed itself to providing reliable energy supplies, clean solutions and affordable prices for the development of the economy and the wellbeing of citizens. That’s why Kosovo is considered a pioneer in the use of solar energy for district heating, with a planned 50 MW solar power plant in Pristina that should cover the heating needs of approximately 38,000 people.

Respecting ESG Standards Accelerates EU Accession

Montenegro is recognised as the driver of numerous regional initiatives, particularly those related to green transition, sustainable finance and the circular economy. Pursuing the Green Agenda is among Montenegro’s priorities in the EU accession process, because the state leadership believes sincerely that implementing standards related to environmental protection, social responsibility and governance is key to long-term economic stability and prosperity.

The Government of Montenegro’s position is that the adoption of ESG standards in agriculture, forestry, tourism and transport will help preserve natural resources, protect bio-

Supporting Investments in Renewables

Wdiversity and reduce the negative impacts of climate change. Its position is that the increased use of green energy is crucial to reducing the dependence of Montenegro, and the Western Balkans as a whole, on fossil fuels and responding to the challenges caused by climate change.

Montenegro is the first country in the region to have defined a new economic growth model that implies transitioning from a linear business model to a circular one, through the creation of its Strategy for Circular Transition until 2030, with which it confirms its openness to cooperating with all investors who make sustainable and green investments.

ith an awareness that ESG practices are still in their infancy, the North Macedonian Government is striving to maximally promote sustainability and encourage responsible business practices in the country. It was with this in mind that it adopted the National Sustainable Development Strategy in 2020, the aim of which is to promote social, economic and environmental sustainability. The strategy includes targets for reducing greenhouse gas emissions, increasing the share of renewable energy in the energy mix and improving energy efficiency.

The government has also

launched several initiatives to promote sustainable practices in the private sector, including the Green Finance Initiative, the aim of which is to promote green financing and investment, and the Programme to provide financial incentives to companies that invest in energy efficiency and renewable energy projects. The Macedonian Stock Exchange adopted the Corporate Governance Code at the end of 2021, which requires public companies to report on environmental and social issues in their annual reports, though not all companies have to date integrated ESG principles into their corporate culture.

Targeting the Doubling of Solar Power Production

As a country that became an EU member state a full two decades ago, Slovenia implements all European plans, standards and strategies consistently, including its climate strategy that will enable it to step into the future as a climate neutral country. The Climate Strategy envisages Slovenia becoming a society based on sustainable development by 2050, which is why it is striving to efficiently manage energy and natural resources, while maintaining a high level of competitiveness with a circular economy. It places a focus is on six key areas: green public procurement, sustainable mobility,

food waste, energy efficiency, the sustainable use of land and forestry, as well as raising awareness and developing new knowledge in the field of environmental protection.

The Government of Slovenia is additionally implementing various measures in an effort to secure more green energy, contributing to which will be the newly adopted Law on the Introduction of Devices for the Production of Electricity from Renewable Energy Sources, as well as the new Integrated National Energy and Climate Plan, which calls for the doubling of the amount of energy produced from solar power plants.

Investing in the Future of Green Hydrogen

Although Serbia is not an EU member state, the European Green Deal applies to the country, along with the other Western Balkan countries, the governments of which have committed themselves to implementing the Green Agenda for the Western Balkans, as a concrete plan to extend the Green Deal to Southeast Europe. Serbian public interest in topics related to the environment and climate change has been on the rise in recent years, a positive contribution to which has been provided by the EU for the Green Agenda in Serbia project, which is being implemented by UNDP in cooperation with the Embassy of Sweden and the European Investment Bank (EIB), with

additional funding provided by the governments of Sweden, Switzerland and Serbia. It focuses on decarbonising the economy and achieving the goals of the Paris Agreement, reducing pollution of the natural environment and harmonising Serbia’s legislative framework with the EU acquis in the Green Agenda’s priority areas.

The war in Ukraine accelerated the need for Serbia to secure new sources of energy and it has been estimated that investing in green hydrogen would reduce the need for Serbia to produce electricity from coal, which is a major environmental polluter, and increase production of renewable energy like wind and solar.

Shared Values and Commitment

We strongly believe that building our cooperation with Western Balkan partners in the years ahead will bring additional value to the EEA and its network, and to our partner countries

LEENA YLÄ-MONONEN Executive Director of the European Environment Agency

he European Environment Agency sees cooperation with our partners from the Western Balkans as one of its key priorities, says Leena Ylä-Mononen, Executive Director of the European Environment Agency. Speaking in this interview for our magazine, she outlines the EEA’s major priorities and developments in this cooperation.

T“We have worked over the past 20 years – namely with Albania, Bosnia and Herzegovina, Montenegro, North Macedonia, Serbia and Kosovo* – to build the capacities of experts and encourage closer cooperation” says Ylä-Mononen. “The Western Balkan countries, like all of us, share the same pressing environmental and climate challenges, so we feel that it’s important to work together to address them.”

As our interlocutor notes, Western Balkan partner countries have collaborated actively with the EEA on a range of activities, working alongside other European countries with the goal of providing information and knowledge to improve the environment and wellbeing of people in the region. This relationship has been built over the course of the past

two decades, gradually expanding to encompass full participation in the Agency’s European Environment Information and Observation Network (Eionet) and contributing valuable input to the network’s mission of sharing environmental information across Europe with the aim of creating improvements in our shared environment.

What major milestones have been reached in integrating Western Balkan partners into the work of the EEA?

― Our cooperation has focused primarily on building the ability of the six cooperating countries to further integrate into the Eionet and all its functions, as well as building reporting capacities in key Eionet dataflows. We cooperate with the region through externally funded projects. The most recent one, launched in 2023, supports further integration into the Eionet network and provides support in implementing the Green Agenda for the Western Balkans. This includes assistance to expand national reporting capacities and integrated assessments in thematic areas relevant to the implementation of the European Union’s Green Agenda.

While EEA membership is a political process that the Agency does not influence directly, the joint work is focused on supporting countries in getting technically ready for possible EEA membership in the coming years.

Moreover, 2023 was the first year when the Western Balkan parties were required to report under the adapted Governance Regulation of the Energy Community. The Energy Community is an international organisation with the objective of extending the EU’s energy market to the Western Balkan and Black Sea regions. As part of this en-

COMMITMENT

The Western Balkan countries, like all of us, share the same pressing environmental and climate challenges, so we feel that it’s important to work together to address them.

deavour, the six Western Balkan Contracting Parties initiated reporting of their climate and energy data. The EEA provided support to the Contracting Parties by making available reporting software and providing guidance and training. The fact that these parties will report according to the same regulation as the EEA member countries allows for a more complete picture regarding energy and climate matters, facilitating coordination and collaboration.

We strongly believe that building our cooperation with Western Balkan partners in the years ahead will bring additional value to the EEA, its network and partner countries. What’s more, it will also benefit all our citi-

Western Balkan countries will report according to the same regulation as the EEA members, thus allowing for a more complete picture regarding energy and climate matters

zens as we work to improve our environment and work towards meeting our ambitions for a sustainable future.

What are the major tasks at the national level and in which areas is regional-level cooperation indispensable?

― At the national level, our collaboration with Western Balkan partner countries focuses on key priorities outlined in the Green Agenda for the

Western Balkans, specifically addressing the zero-pollution agenda (air, water, soil), biodiversity and the circular economy. At the same time, we actively invest in strengthening national Eionet networks while fostering vital regional and EEA-wide connections.

The six cooperating partners underscore the regional significance of our joint activities. Much of our collaborative efforts are inherently regional in nature, which highlights the fact that environmental challenges transcend borders. This echoes the essence of the way the EEA works, reinforcing our commitment to a shared and sustainable future guided by collective responsibility.

DATA

The 6 Western Balkan Contracting Parties have initiated reporting of their climate and energy data.

In the context of the Energy Community project, national activities focus on providing guidance and training. This includes developing guidance documents and furthering bilateral support through virtual and in-person training. As the Western Balkan Contracting Parties share similar challenges, regional exchanges are encouraged through experience sharing in webinars and multilateral meetings. ∙

SUPPORT

The focus of our joint work is on supporting the Western Balkan countries in becoming technically ready for possible EEA membership in the coming years.

COOPERATION

Environmental challenges transcend borders, which is why regional collaboration across the region is so important.

Huge Potential for Collaboration

Despite facing challenges, the Western Balkan region must commit itself steadfastly to the green transition, as backtracking isn’t sustainable when it comes to energy security or environmental wellbeing

MAJLINDA BREGU

Secretary General of the Regional Cooperation Council

Athorough understanding of the Green Agenda for the Western Balkans (GAWB), which is akin to the European Green Deal, is crucial for our region’s journey towards sustainable growth and climate neutrality, says Regional Cooperation Council Secretary General Majlinda Bregu. “Common action” is key when it comes to bringing the Western Balkans closer to this goal.

When discussing the Western Balkans, you often emphasise the presence of a “vast area of common action” in the region, primarily in the

field of economics. In which areas has this assertion proven most significant to date?

― In the Western Balkans, which is a region of some 18 million people fragmented into six smaller markets, the “common action” concept is not only sensible, but the only viable concept if we want to be competitive on the EU single market, but also globally. When it comes to the economic domain, the Common Regional Market (CRM) Action Plan, which the RCC is facilitating and coordinating, has made significant strides across multiple areas.

The most notable achievements are the groundbreaking mobility agreements, fostering a dynamic and interconnected regional labour market, because without the free flow of people – to travel, study and work –

coupled with the free flow of goods and capital, there is no shared market. Furthermore, collaborative efforts aimed at advancing investment policy reforms, such as the endorsement of regional standards for negotiating International Investment Agreements (IIAs) and joint investment promotion efforts, including support for participation in investor generation activities, have catalysed the region’s surge in FDI, which soared by almost 40% in recent years, hitting a record high of €8.7 billion in 2022.

Furthermore, the implementation of green lanes represents another success, enhancing trade facilitation by reducing waiting times at border crossings significantly – cumulatively saving over 77,440 hours, or more than 3,200 days. Additionally, the region’s economies have cooperated effectively to move closer to the Single Euro Payments Area (SEPA), aiming to make payment transactions as swift and cost-effective as possible within the economies, because SEPA can generate annual benefits of up to €500 million.

These are just a few examples among the many that highlight the presence of common action and underscore the huge potential for such collaboration in the Western Balkans’ economic sphere. We are currently preparing the CRM2, which will build on the existing achievements and further actions even more, so the region will subsequently be able to phase into the European Single Market.

How prepared are the economies of the Western Balkans for the energy transition and economic progress aligned with the EU Green Deal? Can this transition, which is seen as requiring substantial resources, be accomplished without EU support?

― A deep understanding of the Green Agenda for the Western Balkans (GAWB), which is akin to the European Green Deal, is crucial for our region’s journey towards sustainable growth and climate neutrality.

Despite sharing the goal of achieving climate neutrality by 2030, the region grapples with challenges such as outdated infrastructure, dependence on coal and economic limitations, costing us thousands of lives and between 6 and 11 billion euros annually. Energy transition is multifaceted and entails reducing carbon emissions, promoting renewables and energy efficiency, and phasing out fossil fuels. The EBRD’s estimated financial requirements of €30 billion for the region’s energy transition by 2030 only underscore the magnitude of the task.

However, policy and regulatory adjustments, like carbon taxation and circular economy models, can unlock trillions of euros annually and create 700,000 jobs by 2030 in the EU alone, which can be used to mitigate emissions and further drive energy transition. The Green Agenda must be viewed positively for its developmental opportunities, rather than being seen solely from a cost perspective.

The EU’s €1.8 billion Energy Support Package and €6 billion Growth Plan prioritise decarbonisation and provide essential funding. However, approximately 52% of investments should target cost-competitive renewables, mainly financed by the private sector, while 42% are expected to be

CORRUPTION

According to the Balkan Barometer, corruption consistently ranks among the top three concerns of our citizens year after year, alongside the poor economic situation and unemployment.

funded by governments, private investments and multilateral development banks.

Strong collaboration with informed strategies among all stakeholders is crucial, with early integration into pertinent policies and alignment with EU standards in order to bridge the convergence gap and secure a sustainable future for the Western Balkans. Despite challenges, the region must remain committed to the green transition, as backtracking is not viable for either energy security or environmental sustainability.

Research on the attitudes of Western Balkan citizens, regularly conducted for the needs of the RCC, has shown their concerns regarding corruption and crime. How crucial

the actual level of corruption, which can be higher or lower, the perception of corruption is still intense.

The Balkan Barometer reveals that, year after year, corruption – together with the economic situation and unemployment – remains among the top three concerns of our citizens. Moreover, 55% believe corruption has increased. We find a similar situation with perceptions of crime, with 60% of citizens ranking organised crime as their top security concern. This distrust, which we have been tracking for almost a decade through our Balkan Barometer and SecuriMeter public opinion surveys, shows no signs of reducing; quite the opposite, in fact.

Corruption and crime undermine core democratic values, with serious implications for the rule of law, eco-

SAVINGS Green lanes are saving over 77,440 hours, equating to more than 3,200 days, in trade facilitation.

We are in the process of preparing CRM2, which will build upon existing achievements and take further actions to facilitate the region’s transition into the European Single Market

are strong institutions and the rule of law for the successful implementation of these reforms?

― The key issue here is trust. People in our region do not have a high level of trust in their institutions. According to our annual Balkan Barometer survey, the highest distrust is towards political parties, with 75%, followed closely by judiciaries, with 69%, government and media, both with 62%, and law enforcement, with 61%. So, distrust is overwhelming, which is also indicative in the Corruption Perception Index that was published just recently, with all of the Western Balkan economies ranking high on the scale. Even though this index does not represent

nomic stability, social justice and the overall development and EU accession aspirations of our region. Therefore, strong institutions that have integrity and accountability, and stand committed to upholding the rule of law and promoting transparency and good governance, are crucial in providing adequate responses in fighting both corruption and crime. However, this should not be seen as only being the duty of the institutions themselves. There is no single success factor. An effective fight against organised crime, and particularly corruption, also requires a shift in our social culture and increased ethical and civil commitment. ∙

SUCCESS

The RCC’s facilitated and coordinated Common Regional Market (CRM) Action Plan has achieved notable progress, particularly in groundbreaking mobility agreements.

TRUST

The successful implementation of reforms relies heavily on strong institutions and the rule of law, with trust being a key concern of the people of our region.

Very Clear Tasks

The Western Balkan countries need to step up their decarbonisation measures through the increasing of their interconnectedness, the diversifying of energy sources and the aligning of their national legislations with the EU acquis

BOJAN KUMER

Slovenian Minister of the Environment, Climate and Energy

In this short interview, Slovenian Environment, Climate and Energy Minister Bojan Kumer shares his insights into green transition around the region. Minister Kumer emphasises the importance of enhancing connectivity and regulatory harmonisation across European nations, particularly in the Western Balkans. He discusses the need for intensified decarbonisation measures, in-

creased interconnectedness, energy source diversification and alignment with EU legislation. Additionally, Minister Kumer also highlights Slovenia’s experiences in electrical self-consumption and addressing energy poverty, stressing the potential for mutual learning and the sharing of best practices with Western Balkan countries.

What is your perspective on a wise approach to green transition in the region?

― Europe, as a whole, needs to intensify its work on increasing connectivity and regulatory harmonisation be-

tween different national energy systems. This will strengthen the energy security and resilience of our energy systems. When it comes to the Western Balkans, countries need to step up their decarbonisation measures through the increasing of their interconnectedness, the diversifying of energy sources and the aligning of their national legislations with the EU acquis.

Rising electrical self-consumption and addressing energy poverty is part of our systematic approach to responsible energy consumption

Could you single out the key competences and experiences of your country that you would be interested in sharing with Western Balkan countries?

― I believe it would be better if we ask ourselves what can we learn from each other, and what best practices we can share. In Slovenia, we have recently been experiencing a rise in electrical self-consumption, through which we empower end users to become active users (or so-called prosumers). We have also developed a systematic approach to tackling energy poverty.

I am convinced there are many other fields in which we could learn from our partners in the Western Balkans. ∙

Hard Work and Excellence

Our experience in establishing Slovenia as a hub for sustainable investments and international collaboration offers insights that can prove valuable for other countries considering similar paths

ROK CAPL Director, SPIRIT Slovenia

In the domain of green transition, SPIRIT Slovenia possesses invaluable knowledge and practices that have been honed over decades of fostering business development. In 2016, the agency began implementing the Strategic Sustaina-

Slovenia is committed to taking the lead in transitioning to a circular economy and fostering the adaptation and growth of its small and medium-sized enterprises

ble Transformation Programme for Slovenian companies, which established the first Slovenian practice in the area of the sustainable strategic transformation of companies and served as a basis for further supportive measures in this area.

SPIRIT Slovenia also serves as the national point of contact for the strategic, sustainable and circular transformation of Slovenia’s economy, successfully assisting companies in changing their business practices.

Through initiatives like the National Recovery and Resilience Plan, we have demonstrated proficiency in distributing substantial financial resources for sustainable investments and promoting the transition to a circular economy.

Our success in positioning Slovenia as a hub for sustainable investments and international collaboration serves as a model for other countries that are seeking to embark on similar journeys.

Aligning with the Slovenian government’s vision, SPIRIT Slovenia actively seeks to attract socially responsible and sustainable foreign investors who contribute to higher value-added investment projects. We prioritise investments that not only enhance the skills of our workforce, but also foster innovation, technological development and balanced regional growth. This strategic approach not only accelerates the green transition, but also strengthens Slovenia’s position as an attractive destination for investment in R&D departments and the integration of suppliers into the glob -

al value chain.

Despite its small size, Slovenia is determined to lead the way in transitioning to a circular economy, supporting the adaptation and growth of its small and medium-sized enterprises. This endeavour is no small feat, as it requires a deep understanding of how companies transform within the broader national context.

We launched a pilot project in Slovenia in 2016 with the aim of furnishing local companies with invaluable insights. Serving as the national hub for the transformation of Slovenian companies, we extend non-financial aid. Within this initiative, our team of experts acts as mentors and advisors to approximately 150 enterprises, guiding them through the green transition. Our primary goal is to facilitate companies in their journey towards enhanced environmental sustainability.

We last year secured incentives totalling 280 million euros through contracts for the green circular economy, underscoring the significance of our efforts. While the journey ahead is challenging, it is nonetheless essential. We recognise the global competition, particularly from countries like the U.S., China and India, where the emphasis on transitioning to a green economy may not be as robust. And yet, our dedication and hard work serve to position us well in this competitive field, helping Slovenia succeed in managing the complexities of the transition and maintaining a strong global presence. ∙

The Green Deal is a Big Deal

Testifying to just how dear the issues of environmental protection are to the hearts of Slovenia’s citizens are its spotlessly clean streets filled with cyclists, clear rivers, landscaped mountain trails and high interest in renewables

By NOVICA MIHAJLOVIĆ Journalist

The number of climate change sceptics has fallen dramatically over the last year. Last August saw large swathes of Slovenia devastated by catastrophic floods, with swollen rivers and streams sweeping away and destroying thousands of homes in just a few hours, as well as devastating energy, road and telecommunications networks in the country’s northeast. The damage to households was calculated in the billions of euros, while companies sustained even worse damage. Company

KLS Ljubno, which produces parts for the automotive industry, was forced to suspend production due to the consequences of the flood, and this suspension in turn compelled German automobile giant Volkswagen to halt production at several of its factories in Europe for several weeks.

Slovenians felt firsthand the power of nature and the powerlessness of man, but also had an opportunity to experience and understand the meaning and might of European and international solidarity. Military helicopters from Austria and Croatia assisted the Slovenian Army in saving lives threatened by the raging waters, top engineers came from Germany to

build new bridges, military engineering units from Bosnia & Herzegovina, Croatia and North Macedonia cleared roads and rivers... If there’s anywhere in the world where the people understand that man alone cannot defeat nature, then Slovenia is just such a place, given the unprecedented power of water that its people experienced and survived last August.

Testifying to just how dear the issues of environmental protection are to the hearts of Slovenia’s citizens, and how active they are in launching initiatives to deal with these issues, are its spotlessly clean streets filled with cyclists, clear rivers, landscaped mountain trails and the like. Ljubljana’s waste processing and recycling centre is one of the largest and most modern in this part of Europe. Although Slovenia is still a long way from completing its green transition, particularly when it comes to transport – with most households still using two or more motor vehicles – there is extremely high awareness that radical lifestyle shifts are inevitable and that these changes will impact the lives of each of us and have to be made relatively quickly. The strength of the sense of responsibility towards the environment among individuals in Slovenia is evident at the start of each spring, when local tourist organisations, associations of volunteer firefighters, pensioners, fishing clubs, divers, mountaineers and others from the non-governmental sector organise nature clean-up campaigns. In just a few hours, thousands of people do something useful for nature while socialising and, most importantly, remove from apparently clean forests

tons and tons of rubbish discarded decades ago, before municipal waste collection became so well developed and environmental awareness wasn’t as high among Slovenians.

Although no green party has existed in Slovenian politics for three decades, like many Western countries, the majority of important political parties have programmes that place a great emphasis on issues like environmental protection, climate change, energy and energy transition issues, renewables, a circular economy and ESG standards. In its coalition agreement, the government led by PM Robert Golob, a former director of energy company Gen-I, has devoted a lot of space to dealing with these issues.

The main goals and priorities of the current ruling coalition include accel-

tion of solar power plants. State support and subsidies for district heating systems are also achieving positive results in smaller rural areas, in terms of cleaner air and major reductions in heating costs. The business sector expects a lot from the promise to relax regulations governing the construction of renewable power plants. Slovenian companies and households were so enthusiastic in the construction of small solar power plants that the state had to stop issuing subsidies. The amount of electricity produced on the roofs of Slovenian households has become so large that it is seriously overburdening the existing electricity distribution network. State-owned electricity companies are thus largely focused on modernising the network and increasing its capacity.

Slovenian companies and households were so enthusiastic in the construction of small solar power plants that the state had to stop issuing subsidies

erating investments in renewables, ensuring energy security, reducing fossil-fuel dependence and thus reducing the need for energy imports. Priorities also includes support for the development of new technologies that contribute to climate neutrality and reforming the collecting and spending of financial resources intended for energy and ecology. One of the main tasks is to modernise the national energy and climate plan with a clear timetable for achieving certain energy and climate targets in the period until 2030.

It comes as no surprise that the government of a former electricity company boss announced the lifting of administrative barriers to the construc-

NUCLEAR

Slovenia’s rapid electrification has raised the politically sensitive issue of constructing another nuclear power plant, which will be decided in a future referendum.

Slovenia’s rapid electrification has raised the politically sensitive issue of constructing another nuclear power plant, with the construction of a new one set to be decided in a future referendum.

Efforts to preserve the environment for the generations yet to come bring with them heavy demands and changes that often won’t be pleasant. Anyone who has attempted to drive an electric car in Slovenia for a few days understands that the mode of transport is shifting radically, as is the mindset when it comes to using cars. So-called “range anxiety” for EV drivers serves to illustrate that, in the future, they’ll be forced to also think

more about the they consume energy in other areas of life. Efforts related to the social green transition are already reflected in Slovenia’s social life to an extent. As in many countries in the West, part of the society actively resists new trends, which creates a platform for the emergence of political options that’s aren’t overly committed to environmental targets. We experienced this in Slovenia the last time the government announced a ban on heating with wood. According to that legal proposal, it wouldn’t be possible to obtain a building permit for houses pro-

TARGETS

The new national energy and climate plan will set targets until 2030

jected to utilise a wood-burning stove. The proposal, which was of questionable merit in a country 70 per cent covered by forests, met with strong opposition resistance that compelled the government to modify it. This was a clear warning that caring for a clean environment has its price, and that the price of clean air must not, under any circumstances, take the people’s last euro for a loaf of bread. ∙

PRIORITY

The main goals and priorities of the current ruling coalition include accelerating investments in renewables, ensuring energy security and reducing fossil-fuel dependence.

POLITICS

Although no green party has existed in Slovenian politics for three decades, the majority of important political parties have programmes that emphasise environmental issues.

Highlights

Western Balkan Growth Plan Drives Prosperity, Says N. Macedonia PM

North Macedonian Prime Minister Dimitar Kovačevski hosted the Open Balkan Initiative Summit and the Western Balkans and the EU meeting. Participants in the 22nd January Skopje conference, which was dedicated to the EU’s Western Balkan Growth Plan, included Serbian President Aleksandar Vučić, Albanian PM Edi Rama, Montenegrin PM Milojko Spajić, Kosovo PM Albin Kurti, Minister of Finance and Treasury in the BiH Council of Ministers, Srđan Amidžić, Director-General for Neighbourhood and Enlargement Negotiations at the European Commission, Gert Jan Koopman, and U.S. Assistant Secretary of State James O’Brien. “When we talk about the Growth Plan, we are talking about the freedom of a single market that allows people, goods and services to move freely,” noted O’Brien.

Ana Brnabić Urges Investment in Serbia & Region

Serbian PM Ana Brnabić participated in late February’s Western Balkans Investment Summit in London, organised by the European Bank for Reconstruction and Development (EBRD). The Prime Minister’s assessment was that Serbia is creating an increasingly better business environment for foreign investors, while she emphasised that

her country is the right choice for investments in biotechnology and artificial intelligence. She emphasised that Serbia has a skilled workforce and that the government is investing more than ever in education and transport infrastructure. EBRD President Odile Renaud-Basso praised the region’s leaders for coming together at events like this, which serve to demonstrate a new level of maturity and stability.

Regional Summit on Growth Plan and Economic Convergence Held

The Tirana Congress Hall hosted a regional summit on the European Union’s Growth Plan for the Western Balkans on the last day of February, entitled “Better Together”. Welcoming representatives of the six countries of the region, Albanian Prime Minister Edi Rama stated in his opening address that the EU is now ready to assist the region in becoming part of the system. Olivér Várhelyi, European Commissioner for Neighbourhood and Enlargement, spoke with the leaders of the Balkan Six and stated that the Growth Plan aims to double the economies of the Western Balkans over the next 10 years, thus reducing the development gap with the European average and readying the region for EU membership.

Serbian President Participates in Munich Security Conference

Serbian President Aleksandar Vučić participated in the 60th Munich Security Conference from 16th to 18th February. He discussed the situation in the Western Balkans, economic cooperation, investments and trade relations with UK Foreign Secretary David Cameron, as well as having discussions with European Budget and Administration Commissioner Johannes Hahn regarding the EU Growth Plan for the Western Balkans, the accelerating of reforms, and investments that could significantly enhance the EU enlargement process. President Vučić also took the opportunity to explore additional opportunities

to strengthen good relations and enhance cooperation among Western Balkan countries and the entire region with Borjana Krišto, Chair of the Council of Ministers of Bosnia and Herzegovina.

Kopaonik Business Forum

Focuses on Regional Matters

More than a third of the panel discussions held during this year’s 30th Kopaonik Business Forum, which took place from 3rd to 6th March, were dedicated to the region as a whole and the challenges facing Western Balkan countries. The KBF’s central topic, “Economic Resilience in Uncertain Times – Key Challenges for Serbia and the Western Balkans”, was discussed by almost 200 panellists over the course of four days. Alongside the region’s political and business elite, the Forum was also attended by international financial institutions’ directors for the Western Balkans and Serbia, as well as representatives of business chambers from the countries of the region.

Global Baku Forum Focuses on Western Balkans and EU

This year’s 11th Global Baku Forum was held from 14th to 16th March. Within the framework of 11 panels commemorating this 11th forum, discussions focused on climate change, health and the many new challenges facing the world, with the entire third day dedicated to EU prospects. Former presidents of Montenegro and Croatia, Milo Đukanović and Ivo Josipović, along with former member of the Presidency of Bosnia and Herzegovina, Mladen Ivanić, agreed that there is no future for the European Union without the inclusion of Western Balkan countries. Among the Forum’s other participants were for-

mer Serbian President Boris Tadić, former Croatian President Kolinda Grabar Kitarović, Ambassador of Bosnia and Herzegovina to the UN and former BiH Minister of Foreign Affairs Zlatko Lagumdžija...

Serbia Expected to Form New Government by Early April

Serbia is likely to have a new executive government by early April, provided the ruling Serbian Progressive Party (SNS) maintains its stance that this important task should be completed as quickly as possible. Following consultations with representatives of parliamentary groups in the office of Serbian President Aleksandar Vučić, it was agreed that the position of prime minister will belong to the coalition around the Serbian Progressive Party, with expectations that SNS will form a similar coalition to the one it created with the previous government in 2022. According to announcements, at least half of the ministers in the new government will be new appointments, but the country’s course and direction will remain the same as before.

Super Election Year for Croatia

After a three-year election hiatus, which hadn’t previously occurred in the Republic of Croatia since the 1990s, 2024 brings several important elections in the country. First in line are parliamentary elections for representatives in the Croatian Parliament, scheduled for Wednesday, 17th April, followed by European Parliament elections on 9th June. These elections will also take place simultaneously in other member countries. At the end of 2024, citizens of the Republic of Croatia will go to the polls for a third time, this time to elect a president. The first round is expected to be held in late December 2024, with any possible second round taking place in early 2025.

We Can’t Do Without European Support

As they navigate the energy transition process, EU member states have been able to count on generous financial support from the EU.

And our region requires that same kind of support

DUBRAVKA ĐEDOVIĆ HANDANOVIĆ

Serbian Minister of Mining and Energy

country’s green energy transition success depends on its ability to replace fossil fuels in a sustainable way, thereby ensuring a secure and continu-

Aous supply of energy while simultaneously reducing greenhouse gas emissions until achieving climate neutrality, explains Serbian Mining and Energy Minister Dubravka Đedović Handanović in this Connecting the Region interview.

“Studies show that Serbia has significantly higher solar and wind potential than many EU member states, which is why we will make

renewable energy sources our main domestic source of electricity in the coming years,” says our interlocutor. “This is a complex and challenging process for Serbia, given that lignite [brown coal] remains our primary source of electricity, with a contribution exceeding 60 per cent.

“The Government of the Republic of Serbia and the Ministry of Mining and Energy have defined concrete targets in this process, through the Integrated National Energy and Climate Plan until 2030 with projections until

We are working to better connect energy infrastructure within the region, such as with the Trans-Balkan Electricity Corridor or the Serbia-Bulgaria gas interconnector

2050, and the new Energy Development Strategy until 2040 with projections until 2050, set to be adopted this year. The main goals in the period until 2030 include raising the share of renewables in electricity production to 45 per cent, reducing emissions of harmful gases by 40.3% compared to 1990 levels, as well as improving energy efficiency significantly.

“Both the Energy Community and the European Commission recognised Serbia as a reform implementation leader in 2023, thanks largely to progress in the area of the green energy transition. Amendments to the Law on the Use of Renewable Energy Sources and its set of bylaws enabled us to conduct the first auctions for market premiums, with which we

Photo: Emilija Jovanović

secured 715 green megawatts from solar and wind power installations, with 90 MW of that total expected to be on the grid as soon as this year, alongside total investments that exceed a billion euros. That is a clear indicator that Serbia has created an excellent environment and regulatory framework for RES development. We will organise a second round of auctions for a new 400 green megawatts during this year and, through this mechanism, we will secure a total of 1,300 MW within the market premium system by 2025.

“Our decarbonisation process goals can’t be achieved without public investments and an increase in the RES share of the production capacity of EPS [Serbia’s electric utility pow-

sumers of electricity from renewables. And in doing so they also have the support of the state, which – together with local government units – provides subsidies amounting to 50 per cent of the total value of the investment to install solar panels.

Our ambition to increase production capacities from variable renewables, i.e., energy sources that produce electricity intermittently, must be accompanied by investments in balancing capacities that serve to safeguard supply stability. The Bistrica pumped-storage hydropower plant was recognised in the “Leap into the future – Serbia 2027” programme as the most important project in the country’s energy sector. The Đerdap 3 PSHPP would serve the same pur-

Serbia has huge potential with regard to its mineral resources, some of which are even on the EU Critical Raw Materials List and are crucial to accelerating the energy transition process

er company, Elektroprivreda Srbije]. The largest current project is the construction of 1 GW of self-balancing solar power plants, through a partnership with a consortium led by Korea’s Hyundai Engineering, which upon completion will come fully under the ownership of EPS, i.e. the state. With the implementation of current and planned public and private sector investments, 3.4 GW of new power plants that utilise solar and wind energy should be on the grid by the end of the decade.

Citizens, but also the business sector, are expressing great interest in installing solar panels on their homes or production plants and becoming pro-

LEADER

pose, but with an even greater capacity, and would position Serbia as one of the region’s energy transition leaders. Preparation of the Preliminary Feasibility Study is underway and should determine the technical and economic basis to implement this project.

We also plan to adopt a Strategy for the Management of Minerals and Other Geological Resources. Serbia has huge potential with regard to mineral resources, as it has a wealth of, primarily, copper, gold, silver, lead and zinc, but also borate and lithium. Some of the minerals that Serbia has in abundance are even on the EU Critical Raw Materials List. Speeding up the energy transition process also

The Energy Community and the European Commission recognised Serbia as a reform implementation leader in 2023, thanks largely to progress in the area of the green energy transition.

depends on them, because producing more green energy means mining more mineral resources to produce solar panels, wind farms etc. And the priority in all of this is preserving the environment, in accordance with the standards applied in the most developed countries, because that’s a precondition for mining to be modern, sustainable and efficient, and for us as a country to develop and create better conditions for our citizens and the economy.

Where do you identify the most significant need for cooperation with regional partners in achieving the goals of the EU’s Green Agenda for the Western Balkans?

― The Western Balkan region relies predominantly on fossil fuels to generate electricity and heat. As a country that’s striving towards EU membership, Serbia shares Europe’s vision when it comes to the way it sees the future of the energy sector, primarily in the sense of striving towards its decarbonisation. Serbia’s starting position when it comes to coal’s participation in the energy mix is closest to that of Poland, while similar challenges confront other Western Balkan partners. No country has completed the energy transition process overnight, and EU member states began the process earlier and can count on generous financial support from the EU. Our region requires that same kind of support if we are to ensure that the transition is financially sustainable and socially just.

Our will and readiness to work to achieve the stated energy and climate goals are strong and indisputable, but a sustainable transition to cleaner energy sources also requires strong and continuous cooperation and international partnerships. ∙

POTENTIAL

As a region with extremely favourable conditions for producing electricity from renewables, the Western Balkans could be an important partner of the EU in the decarbonisation process.

PROSUMERS

The number of prosumers has increased sevenfold in just

18 months

INVESTMENT

Investments are the key to what we need to do in the coming years if we are to gain energy independence and secure supplies, as well as a healthy environment.

Pacta Sunt Servanda!

The headline for this article, literally meaning “agreements must be kept”, is a reminder to the Western Balkans from the Vienna Convention on International Treaties. Remembering and respecting this is a prerequisite for the success of the Growth Plan, the Green Agenda, ESG criteria and commercial investments in the energy industry

ALEKSANDAR KOVAČEVIĆ

Senior Visiting Research Fellow at Oxford Institute for Energy Studies (OIES)

In Vienna on 14th December 2023, the Ministerial Council of the Energy Community concluded: “The Ministerial Council expressed its serious concern over continued noncompliance with the Large Combustion Plants Directive and the Industrial Emissions Directive in several Contracting Parties. Significant levels of air pollution affect the health and lives of citizens of the Energy Community.”

The Council also extended the duration of the Energy Community Treaty (EnCT) to 2036, without making any significant adjustments to its text in order to address this key observation.

In its “Rule of Law Checklist” (28th March, 2016), the Venice Commission assumes that enforcement of international treaties is a key aspect of the rule of law in any given jurisdiction. The European Union makes the assumption that abiding by international treaties is compulsory for its member countries. Furthermore, the EU sees it as its duty to promote the rule of law in international relations. There is, however, a difference between reporting on the rule of law in EU member states and actually promoting the rule of law in external relations. In other words, its inwardly oriented Methodology for the preparation of the Annual Rule of Law Report within the EU isn’t sufficient to address the situation of compliance with international treaties by third countries.

Observation of the EnCT Ministerial Council is not reflected in the chapter on rule of law in the accession Progress Reports, despite this noncompliance having been obvious for sev-

eral years to CSOs, professional institutions and the EnCT Secretariat itself.

If or when the EU’s Growth Plan for the Western Balkans becomes approved by EU institutions and member states, it will be conditioned by the rule of law principle. In other words, funds aren’t likely to be disbursed as long as noncompliance with the EnCT persists.

The Western Balkans needs investment to address noncompliance with such complex material obligations of the EnCT. At the same

time, commercial investments aren’t possible due to legal uncertainty and the risks expressed in the Ministerial conclusions. This is a vicious cycle.

Investments in public infrastructure (high voltage lines or regulatory improvements) and most forms of renewable energy are based on sovereign bonds. However, these investments only increase the competitive pressure on commercial power generators that are deprived of access to commercial financial markets by risk and uncertainty.

These companies are fully exposed to government policies that redistribute funds from operations and the maintenance of assets to support wider employment and social wellbeing. The financial depleting of thermal power plants, coal mines, energy efficiency, forestry and environmental protection generates a short-term surplus and an apparent increase in sovereign creditworthiness. However, this underinvestment in physical assets devastates security of supply and increases noncompliance with the material obligations of the EnCT. This physical devastation is now well underway and will prove difficult to reverse.

Even if the EU turns a blind eye to noncompliance with international treaties and ultimately approves the implementation of funding to the Western Balkans for the Growth Plan, the effects of these funds are likely to be constrained by a shortage of domestic dispatchable power. This also applies to expectations on critical raw materials, rare earth minerals or “nearshoring”. In reality, bauxite, aluminium, steel and energy intensive industries in the Balkans are already dormant. To avoid any ambiguity: there is a shortage of electricity.

Energy intensity in the Western Balkans, and electricity intensity in particular, stands at less than half the OECD average. Total energy consumption per capita in the Balkans is lower than in developed EU countries, as evidenced by physical data included in this publication. As a consequence, poverty is inevitable and cannot be addressed without massive investments in commercial power generation. Poverty is further aggravated by power blackouts, forest fires, flooding, erosion and landslides, as well as air pol-

CONDITIONS

If or when the EU’s Growth Plan for the Western Balkans is approved by EU institutions and member states, it will be conditioned by the principle of the rule of law.

lution. Sulphur emissions in our region are many times higher than the European equivalent.

Under such circumstances, persistent poverty and risks to lives may co-exist with nominal GDP growth and fiscal and monetary stability.

“Agreements must be kept” (Pacta Sunt Servanda!) is a call for a realistic, harmonised legal framework that’s complemented by access to the non-recourse financing that is essential to address the deterioration of energy security and preserve social stability.

If that is achieved, the Growth Plan will find fertile ground and its key objectives could be achieved within a meaningful period of time, by 2036.

It is a physical reality that retrofitting existing power plants to comply with the Large Combustion Plant Directive and the Industrial Emissions Directive does not align with the decarbonisation imperative. However, replacing this dirty energy with a carbon neutral, dispatchable and commercially viable energy supply is feasible and can be done. This bold investment strategy needs to be accompanied by an immediate reduction in harmful air pollution through minimal cost interventions, in order to preserve both lives and properties.

For national power generation companies, the implementation of ESG standards implies massive strategic re-orientation from the devastative ‘business-as-usual’ towards a rapid state-of-the-art investment strategy. And this is also possible.

For that purpose, these companies need access to the EUETS (EU Emissions Trading Scheme), with appropriate allocations to enable rapid coal phase-out. While these allocations may be enacted only once decarboni-

sation has been achieved, that is sufficient support for commercial funding and access to commercial technologies that are not available in the public domain. Only under this approach will the Western Balkans be able to compete on a level playing field with its Central European competitors.

This is a major task, but it has been done before. Political and industrial leaders have to replicate the construction of the entire lignite power generation portfolio that was constructed over a period of roughly ten years, within an externally arranged financial framework, some 50 years ago. EU institutions need to endorse and promote this policy innovation.

Access to EUETS, under Article 25 of the EUETS Directive, automatically (and irrevocably) excuses the region from CBAM Regulation under Article

GREEN AGENDA

The key objectives of the Green Agenda could be achieved by 2036

Persistent poverty and risks to lives may co-exist with nominal GDP growth, fiscal and monetary stability in the Western Balkans

2(6). Through this, the region is protected from the uncertainties of Article 2(7), as well as any confusion between the SAAs and the CBAM Regulation. EnCT already contains provisions regarding the required Monitoring, Reporting and Validation (MRV) system, and it is advanced in its implementation. The appropriate adjustment of the EnCT needs to provide the region with a meaningful legal framework and financing for decarbonisation and clean air. This truly restores security of supply and demonstrates the rule of law. This is a common interest of the EU and the Western Balkans. ∙

POSSIBILITIES

Transitioning to carbonneutral, secure and commercially viable energy sources is feasible and requires bold investment strategies.

SHIFT

Implementing ESG standards for national power generation companies requires a significant shift from traditional practices to rapid and modern investment strategies.

ESG Principles Are Vital

The Foreign Investors Council of Serbia (FIC Serbia) provided a significant contribution to shaping the country’s regulatory framework for renewable energy sources and raising awareness of the importance of green building

ALEKSANDAR LJUBIĆ

Executive Director of the Foreign Investors Council of Serbia

In its activities to date, FIC Serbia has focused to a large extent on digitalisation, responsible business operations, the essential requirements of the green transition of the Serbian economy and the implementation of a circular economy. These topics are not in the focus of our member companies merely because of the need to follow EU regulations, rather they are recognised as imperatives to enabling the further economic growth and development of our society, and to utilising the economic potential of the present. Moreover, our member companies transfer their knowledge and experience from their countries of origin to their Serbian employees, but also to local business partners, particularly in supply

chains, thus creating a better and healthier environment for all of us.

We would emphasise in particular the FIC’s contribution to creating a regulatory framework governing renewable energy sources, as well as understanding the significance and need to introduce green building rules that were implemented in the most recent Amendments to the Law on Planning and Construction. The principles and rules of green building have a positive impact on reducing greenhouse gas emissions, as they imply the use of ecologically certified building materials and equipment, the more efficient use of all available resources, reducing the generating of construction

When it comes to these issues, clear obligations for companies are being introduced in developed economies worldwide. As such, these principles are becoming an indispensable element of doing business – both because of cooperation with regional bodies that have already developed standards in this regard and because of the need to preserve society and the planet. We are particularly proud of having staged the first conference on regenerative agriculture, which we organised in cooperation with the EBRD in September 2023. The regenerative agriculture concept has an important role to play in strengthening resistance to palpable climate change, preserving

Our members provided a major contribution to advancing waste management regulations, primarily in the area of introducing the issuance of “green” certificates

waste and improving its utilisation, as well as calling for demolition in accordance with the circularity model, with the use of renewable energy sources, all of which will undoubtedly result in improving the quality of life of all users, furthering environmental protection and advancing the sustainability of business.

Council member companies are aware that the time when the principles of environmental protection, social responsibility and conscientious corporate governance (ESG) were the subject of interest for a small group of socially conscious individuals and organisations has long since passed.

biodiversity and the environment, as well as in ensuring the sustainability of food production for future generations. Launching discussion of this important topic in our public is also essential to the functioning of supply chain systems that include local agricultural producers, especially if they take into consideration companies’ activities, but increasingly also the obligations of companies that operate in the EU in terms of the need to adapt to new regulations and recommendations, as well as positive practices aimed at improving environmental protection and reducing emissions of harmful gases. ∙

Annual CO₂ emissions (per capita) tons per person

CO2 emissions per capita are lower in the Balkan economies than in more developed EU countries. That is due to the lower level of economic activity in the Balkan region.

Country / area, 2022

Austria

Bosnia and Herzegovina

Serbia

Slovenia

Kosovo*

Croatia

Montenegro

North Macedonia

Albania

Data source: Global Carbon Budget (2023); Population based on various sources (2023)

Running Late, but Catching Up

While the Serbian Government has been slow to address climate change, positive steps towards supporting energy production from renewables are becoming evident

By DRAGAN ŽUPANJEVAC

Retired Ambassador, Former Permanent Representative to the UN Environment Programme in Nairobi,

Kenya

Global climate change, together with pollution and biodiversity loss, forms part of the planetary triple crisis, as defined by the United Nations Environment Assembly, that represents a serious and daunting challenge for the future of humanity.

Like the whole of Europe, climate change is having serious repercussions across the territory of the Republic of Serbia. Despite Southeast Europe not being a major global emitter of the greenhouse gases that are the main cause of climate change, our region is experiencing above average impacts of climate change and global warming. Serbia is located in the southern belt of the temperate continental climate area that stretches from southern Serbia to Poland, and this southern belt, due to the so-called ‘Azores High’, is being exposed to hotter and

hotter air each year.

Several droughts have hit the country’s agriculture sector in recent years, especially in 2012, 2017 and 2019, which seriously diminished crop yields for wheat and maize – the country’s top agricultural exports. The most devastating disaster to date was the massive unprecedented flooding of 2014, which caused the displacement of 30,000 people and enormous damages with a price tag exceeding a billion euros, including the destructions of bridges, roads and a thousand homes.

Serbia’s recently adopted Low Carbon Development Strategy for the 2023-2030 period states that the risks posed to sustainable development by climate change are an evident threat that could jeopardise infrastructure, agriculture productivity, water availability and public health.

And yet, the Republic of Serbia still covers 70 per cent of its energy needs via coal-fired plants, mainly the thermal power plants Nikola Tesla A and B in Obrenovac, Kolubara, Morava and Kostolac. Thirty per cent of the country’s energy needs are produced from renewables, the majority coming from the Iron Gate I Hydroelectric Power Station, aka Đerdap, located on the Danube at the border with Romania.

The Government of Serbia has informed the Secretariat of the UN Convention on Climate Change of its renewed National Determined Contribution; of its commitment to reduce emissions of greenhouse gases by 33.3% (compared to 1990 levels) by

2030, which is an achievable goal.

Professor Nikola Rajaković, president of the Association of Energy Specialists of Serbia, believes that the country was quite late in developing renewable power sources like wind and solar, but that it has made important investments in wind power generation recently. For example, nine wind farms are already operational throughout the country, the largest of which is the Čibuk 1 wind farm near Kovin, while four more are under construction. Serbia is planning to invest in a major hybrid pumped-storage power plant on the river Drina at Bistrica, while plans to build the Đerdap III Reversible Hydroelectric Power Plant are also going ahead.

Serbia was quite late in developing renewable power sources like wind and solar, but has made important recent investments in wind power generation

In partnership with the U.S.’s EXIM Bank, the World Bank’s MIGA [Multilateral Investment Guarantee Agency] and the Swedish export credit corporation, a new solar power plant producing 1 gigawatt of power should be completed by 2028. Furthermore, new solar plants are planned for construction near Negotin in Eastern Serbia, in Vojvodina’s Banat region and near the city of Vranje in South Serbia.

The Serbian Government is implementing measures to mitigate and adapt to climate change. The Nation-

CONCERN

Despite Southeast Europe not being a major global emitter of greenhouse gases, our region is experiencing above average impacts of climate change and global warming.

al Assembly of Serbia adopted the 2021 Law on Climate Change, which obliges all GHG emitters to obtain licenses from the Ministry of Environmental Protection for the emission of GHGs and for those emissions to be strictly monitored, starting from June 2024. All traders of motor vehicles are also obliged to report on vehicle engine efficiency and to publicly declare emissions levels.

The Serbian Ministry of Mining and Energy is working on a national integrated energy and climate plan that should be adopted by the end of this year and should align Serbia’s energy sector with the European Green Deal.

However, the civil sector in Serbia is

must be adopted forthwith.

NGO Green Chair conducted a survey in August and September 2023 to determine how the Serbian population views climate change. Twothirds of respondents were of the opinion that scientific knowledge ascribing climate change to human activity and as the result of emissions of greenhouse gases is accurate; they also described climate change as the most serious global challenge confronting humanity. The majority of those surveyed thought that Serbia has been harder hit by climate change than neighbouring countries, with four-fifths of respondents expressing grave concern over rising climate

CLIMATE PLAN

The Serbian Ministry of Mining and Energy is working on a national integrated energy and climate plan that should be adopted by the end of this year.

voicing concern over the fact that the country is running late when it comes to confronting the challenges of climate change and a lot still remains to be done. Serbian NGOs dealing with climate change emphasise that too little has been done too late, while they stress that several bylaws needed to implement the Law on Climate Change

change. Two-thirds of survey participants see pollution as a direct consequence of climate change. Almost all respondents were aware of the problem of climate change, though a small minority did express the view that it is not a manmade phenomenon, but rather the result of cyclical climate change. ∙

LEGISLATION

The Serbian Government is addressing climate change through the 2021 Law on Climate Change and by aligning its national integrated energy and climate plan with the European Green Deal.

WARNING

Serbia’s NGO sector is voicing concern over the fact that the country is running late when it comes to confronting the challenges of climate change and a lot still remains to be done.

Expanding Real Estate Horizons

CBS International has been providing consulting and brokerage services across all real estate market segments for 17 years, with a unique approach to each client

NEMANJA DROBNJAK

COO of CBS International, part of the Cushman & Wakefield Group

s a regional leader in the real estate sector, CBS International has been strengthening its presence in Central Europe since last October’s opening of its office in Austria, but this is just one step in the expansion of its business. Here company COO Nemanja Drobnjak shares its other plans and ambitions with us.

AHow do dynamic changes on the real estate market impact CBS International’s business strategy?

― As a company focused on providing consulting and brokerage services across all segments of the real estate market, we proudly highlight that, over the 17 years of our existence, we have directed our strategy towards creating a unique approach to each client and seeking the right solution for mutual satisfaction. We provide full support to our clients, from investment analysis to implementation. In this

process, apart from becoming strategic partners, we identify opportunities to improve existing services and create new ones. We can say that our regional experience influences our ability to adapt quickly to changes and transfer best practice examples from the countries of the region, where we have fully operational offices in Croatia, North Macedonia and Montenegro.

Which real estate market segments do you currently see as the most promising and as having the greatest potential for further development?

― Regarding real estate demand, the office space market stands out and has almost reached its peak in Belgrade, where demand exceeds supply. This is attributed to the hybrid work model and companies showing a growing tendency to return to office spaces with more comfortable conditions for each workstation. Until recently, this averaged around 10 square metres per employee, while it is today increasing to about 14 square metres. This was also one of the topics discussed at this year’s MIPIM real estate fair in Cannes.

Considering the constant interest among foreign corporations in expanding their business in our country, we can say that this segment will continue to grow. Moreover, the industrial and logistics market is highly active, especially with the rise of online shopping and increased interest in this segment from international investors.

The modern retail space market is also notable, with 1,220,000 square metres in Serbia. The opening of six new retail parks in smaller cities is expected, indicating the prospects of this retail format and its overall potential for further growth.

The increasingly popular hotel market and investments in this segment are also noteworthy. Last year was a record-breaking one for the largest number of hoteliers. This trend is expected to continue, especially with Expo 2027, which is expected to attract around 2.6 million visitors, effectively positioning Serbia on the map for key hotel groups.

How does your company maintain a high level of employee motivation in the context of evolving workspaces and changes in working methods?

― With the emergence of new online professions, especially with the advent of hybrid work, it has become noticeable that retaining employees in offices has become a challenge for almost all corporations. Modern working conditions involve far more aspects than just office space, especially when it comes to the wellness segment, which is becoming a priority for employees.

Due to various influences, the transformation of the workspace has led to a healthier, more spacious and open concept, where interior design solutions focus on the interaction of employees and the social aspect, which has proven indispensable in the work and life of every individual.

Many of today’s employees are from

The city’s CBD is expanding further

Apart from the central New Belgrade zone that’s known for its modern business complexes, there is also noticeable growth in the central business district with the introduction of new complexes that are designed with a special emphasis on diverse retail and service offers tailored to the needs of the employees of tenant companies.

company. We firstly operate based on principles that align with this policy, while we secondly advise clients and investors. We strive to empower all three pillars of ESG principles within the company through our philosophy and approach to doing business.

Regarding the E component, our company has been operating for many years in accordance with ISO standards related to quality management systems, health and safety at work, environmental protection and customer satisfaction. We have also implemented a recycling system in our business premises and plan to increasingly use recycled materials in

MARKET

The modern retail space market stands out, with offers exceeding 1,220,000 square metres in Serbia.

We strive to strengthen all three pillars of ESG principles within the company through our philosophy and business approach

Generation Z, which doesn’t recognise traditional office setups or seating arrangements. They have different habits, and therefore different expectations of the space. That’s why new trends are increasingly focused on individual comfort. Rest and relaxation areas are carefully designed to meet the needs of employees, with particular attention given to materials and colour palettes that can provide each space with a unique touch.

How does CBS International integrate ESG principles into its business, especially in the context of real estate market development?

― The green agenda and ESG principles are of great importance to our

our daily operations, as well as continuing initiatives dedicated to greening public spaces.

Regarding the S component, we are most active in providing financial support to numerous vulnerable groups, such as BelHospice organisations, Safe Houses, the Children’s Shelter, support for persons with disabilities, numerous children’s musical talents and young athletes. Within our team, we also have the first male employee who opted to take paternity leave.

Regarding the G component, as a company we are continuously committed to high ethical standards in the industry, providing regular training and specialised workshops for our employees. ∙

The residential real estate market remains resilient

When it comes to the residential real estate market, demand continues to double the number of newly built residential units sold in the past year, with stable prices and a recognisable preference for new build apartments among buyers. The residential real estate market remains resilient and is still perceived as the main investment opportunity in Serbia, due to the lack of attractive alternative options.

Informal spaces are becoming increasingly popular

It was once unimaginable but is now highly probable that you won’t have your own desk exclusively to yourself in a new workspace. Instead, you are more likely to encounter informal spaces and meeting rooms furnished with comfortable armchairs and sofas, instead of traditional conference tables and chairs, while special cabins designed for private and business meetings have been popular for quite a while already.

Smoother Transition to the Green Agenda

The region, including North Macedonia, is actively pursuing ambitious energy transition plans and is striving to attract investments to bolster these projects

KRESHNIK BEKTESHI

North Macedonian Economy Minister

Decarbonisation is at the heart of the EU policies, aligned with the bloc’s commitment to climate action under the Paris Agreement. North Macedonia’s NDC has set a GHG emissions reduction target of 82%, compared to 1990 levels, by 2030.

“This commitment underscores our dedication to the principles of the Paris Agreement and represents a significant step towards a more sustainable, competitive and just future,” says North Macedonian Economy Minister Kreshnik Bekteshi.

North Macedonia’s Just Transition

Roadmap (JTR) was adopted as a key strategic document by the Government in June 2023. The JTR introduces scenarios and socioeconomic measures to ensure transition benefits are shared and to support vulnerable regions, communities and workers from falling behind.

“We are very pleased to see the international acknowledgement of our ambition and action, and are delighted to become the first country in Europe, and one of the two first small countries, to join the Climate investment Fund’s Accelerated Coal Transition (CIF ACT) programme,” notes this minister.

Our interlocutor explains that the investment plan is structured to deliver transformational impact and ac-

celerate North Macedonia’s coal transition through three components that address the CIF ACT’s pillars of governance, infrastructure and people. Those are: retiring coal assets and re-powering with RE; Socioeconomic Regeneration of Pelagonia and Southwest regions (coal impacted regions); and Energy efficiency, clean heating and distributed generation programme.

“To this end, the Investment plan targets a financial package of USD 676.3 million. The $85 million in grants and concessional loans from CIF ACT funding is expected to leverage $471.3 million from MDBs and mobilise a further $85 million in private sector investment. This will be distributed across the three IP components, targeting the pillars of Governance, People and Communities and Infrastructure.

“I would also like to express our appreciation to all our partners, including the EBRD, World Bank and IFC, KfW and others partners who joined our Just Energy Transition Investment Platform, which was launched during COP28 in early December 2023. The total early estimates for required investments amount to three billion euros, which is to be mobilised from private and MDB investments, supplemented by public finance to reach the climate ambition. In addition to these, we aim to mobilise $285 million in grants and concessional finance from donors and philanthropic contributors through close partnerships in order to support decommissioning, just transition meas-

ures, storage and grid strengthening, and capacity building. It is also expected that €2 billion will be deployed by the private sector through the lifting of investment barriers, primarily in renewables.

Some of the key milestones and progress towards the green transition that I would like to share include the following: ESM initiated the green transition in the region by investing in photovoltaic PP in Oslomej. This was aligned with the Government strategy, emphasising the need to move in this particular direction. The choice of an old coal mine as the most suitable location was based on its limited usage for any other purpose. Such a transformation is necessary not only

Where do you identify the most significant need for cooperation with Western Balkan partners in achieving the goals of the EU’s Green Agenda?

― We are all equally dependent on coal in this region and, consequently, decarbonisation will be a great challenge for all of us. However, we should keep in mind that the European Union has adopted a new growth plan for the Western Balkans’ aspiring EU candidate countries that provides a clear signal that Europe is heading in that direction and that we have to follow its example if we want to achieve our goal. The aim is to accelerate the Western Balkans’ socioeconomic convergence with the EU, extend some of

We have achieved significant progress over the last year in terms of undertaking necessary steps towards the transition process

for the protection of the environment, but also for strengthening and ensuring the reliable production of electricity and thermal energy.

This transition will be expensive, but it will be even more expensive if delayed. We have a strong base to move in that direction. Not only energy sector players, but all of us need to be involved and to be part of this just transition. This is also proven and on the right track, considering the fact that the private sector and even citizens have already initiated investments in photovoltaics for their own needs. Over the course of just two years, around 600 MW of renewable energy plants have been constructed by private investors, which is a really good trend that should be continued at the same pace.

the benefits of EU membership to the region and, ultimately, speed up the accession process. In order to incentivise reform, the plan includes €6 billion in conditional loans and grants for all Western Balkan countries.

This offers Western Balkan states a chance to take substantial strides towards a sustainable growth model, as outlined in the EU’s 2020 investment plan and the Green Agenda for the Western Balkans. The original initiative aimed to facilitate the region’s green transition, encompassing aspects like decarbonisation and the integration of energy markets. However, progress has been sluggish due to insufficient funding for such initiatives. The EU’s new plan establishes ambitious targets for Western Balkan states spanning various areas. Its ex-

TRANSFORMATION

The energy sector, which has been a substantial contributor to our country’s emissions, finds itself at the forefront of the transformation process.

ecution entails aligning the region’s economies with the European Single Market, incorporating the free movement of goods and services, and advancing towards the climate objectives outlined in the green agenda. The plan additionally calls for enhanced regional cooperation, particularly in energy, electricity markets and transportation (including the construction of rail connections between major cities around the region). Furthermore, each Western Balkan state must persist in implementing the fundamental democratic reforms that are crucial for EU membership.

A key element of the growth plan involves fortifying the common regional market in the Western Balkans, particularly in the electricity, transport and energy sectors. It is very important for the EU to guarantee that its funding is accompanied by integration into EU mechanisms aimed at fostering capacity and expertise building. The European Commission should extend its sustained support to the Western Balkans in this context, fostering regional collaboration with crucial EU involvement in addressing the green agenda’s objectives. The new growth plan holds the potential to serve as a successful model of targeted funding for the green transition. In order to ensure the effective absorption of this funding, Western Balkan states must remain dedicated to implementing the Green Agenda while progressing towards the stipulated requirements of the new plan. Simultaneously, the EU should actively promote increased investment in energy security, transportation networks and renewable energy sources. This stands as a vital step in reducing reliance on external actors and enhancing regional cooperation. ∙

VISION

The Just Transition Roadmap (JTR) envisages an institutional infrastructure to coordinate and implement just transitionrelated activities.

The investment plan targets a financial package of $676.3 million

PARTNERSHIP

As a prerequisite for accessing CIF funds, over recent months we’ve been working with the EBRD, World Bank and IFC to develop the investment plan.

Positive Momentum for Green Transition

North Macedonia is now a sought-after destination for investments in renewables, particularly wind and solar, attracting both domestic and foreign investors

VIKTOR MIZO

President of the Foreign Investors Council of North Macedonia

In the dynamic landscape of the North Macedonian economy, the country’s Foreign Investors Council (FIC NM) is a pivotal force in driving economic growth and development. This robust com-

riculture, automotive, food production, energy, telecommunications, IT, pharmaceuticals, banking, insurance, consulting and auditing services.

North Macedonia became very attractive for investment in renewable energy recently, specifically for wind and solar, for both foreign and domestic investors.

The global electric vehicle (EV) value chain has been reshaping and advancing constantly, particularly over the last few years. As global automakers go electric, they are driving green FDI in new automotive hubs in developing countries, and North Macedonia has also found itself on the receiving end of this process.

A significant number of foreign investors currently operating in the country’s automotive industry are deeply involved in the most sophisticated processes in the field of green transitions and in general, contributing to environmental sustainability in the regions where they operate. As suppliers to OEMs for electric and plug-in hybrid vehicles, mainly for the EU market, they bring to the fore the importance of the electrification trend in industry for all work-

Foreign investors in the country’s automotive sector prioritise sophisticated green methods that advance sustainable regional environmental practices

munity, comprising over 130 esteemed member companies hailing from 20 countries, plays a significant role across various sectors, including ag-

ers involved in this part of the supply/ value chain. Power electronics units and on-board chargers for EVs, battery management systems, batteries

for industrial applications and catalytic converters are just some of the products being produced by Tier-1 and Tier-2 automotive suppliers in the country. With an awareness of the relevance of these jobs and the industry for the country’s GDP growth, the rise of public awareness in the environment and green transitions is becoming apparent.

The KOSTAL Group received this year’s ESG Transparency Award, which recognises the exemplary willingness of the company to integrate ideas of progressive sustainability into its business model, which can thus be shared as an experience in other foreign or domestic companies.

During the energy crisis that came with the outbreak of the war in Ukraine, many foreign investors took active steps in the green transition process and strove to reduce their electricity costs by making significant investments in installing photovoltaic roof systems, with regulations having previously been adapted to investors’ needs, in order to encourage and simplify such investments, on the basis of FIC NM lobbying. There are still limits and obstacles to selling excess electricity generated by the PV systems of companies located in Free Zones, but we are striving to have legislation amended before year’s end. Most FIC NM member companies engage constantly in various projects and activities with the local community, pursuing a more inclusive and systemic approach in preserving the environment and wellbeing of the county (e.g. forestation actions, cleaning of Lake Ohrid etc.). ∙

“Greening” Without Enthusiasm

Recent strides in pursuit of the Green Agenda signal a departure from previous inaction, but substantial effort is still required to bridge the gap and align with environmentally responsible nations

By DEJAN AZESKI

ertain progress has been achieved over the past two years when it comes to advancing the Green Agenda in North Macedonia, as is particularly evident in the growing presence of solar panels, but numerous areas still require improvement. Notably, the North Macedonian parliament only has one green or ecological party, which managed to secure a maximum of just two

CMPs, and even that was in a coalition, and ultimately faced near extinction. Another noteworthy political endeavour involved the rebranding of the country’s third-largest political force,

the Democratic Union for Integration, which declared itself a green party five years ago. Unfortunately, this attempt not only failed, but quickly resulted in the party returning to its former political rhetoric and party colours. Voters apparently didn’t resonate with this change – a reality that the party leadership acknowledged, willingly or not.

A strange problem is the lack of awareness of the need to do much more work to address and overcome the environmental threats that exist in North Macedonia. The capital of Skopje has been among the world’s most polluted cities for a decade. There are also serious indications that the country is being exploited for the incineration of toxic waste imported from Western Europe (mostly Italy), while general environmental awareness among the masses is at the lowest possible level.

The negligible use of electric vehicles is a clear indicator of this. Given the country’s poor EV support infrastructure, especially in the interior, and the excessively high prices of these vehicles, particularly as compared to the country’s average living standard, it comes as no surprise that almost no member of the country’s middle class has opted for such a

Skopje has been among the world’s most polluted cities for a decade, while there are alarming indicators that the state is incinerating toxic waste from Western Europe, mainly Italy

move that is only economical over the long term. The state provides certain tax breaks and incentives, but these are obviously insufficient – considering the seriously low percentage of environmentally friendly vehicles on the roads.

become a profitable business for private individuals, and a real battle is currently being waged when it comes to finding the best locations for exposure to sunshine that are also close to high-voltage power stations.

The hope is that, over the next dec-

North Macedonia is striving to transition from coal-powered thermal plants to solar ones, but experts emphasise the need for a reliable natural gas supply to tackle environmental challenges

Every government since the country gained its independence has been a declarative signatory and supporter of all international initiatives and commitments related to the environment and the green agenda, but they have only applied that which is an absolute necessity. For example, the term circular economy has only started being more prevalent in the country’s media over the last few years, despite the country having experts who’ve been working on this problem for decades, and these essential global trends aren’t only falling on deaf ears among the general public, but also among the country’s elite.

The previous government of former Prime Minister Dimitar Kovačevski was the first to engage more seriously on the implementation of international obligations and recommendations, which is why records on the installing of solar panels have been broken in just the last two years. Some are state-owned and mounted on the top of defunct coal mines, which is both a practical solution and an instructive and symbolic one that serves to demonstrate how the planet should be transformed. Solar panels have also

DILEMMA

Despite current environmental threats, there is a perplexing lack of awareness of the need for more concerted efforts in North Macedonia.

preexisting reservoirs.

Experts are nevertheless convinced that it will prove difficult to overcome environmental problems without ensuring a stable supply of larger quantities of natural gas. The country currently has only one connection with international gas pipelines, via the interconnector at the Deve Bair border crossing with Bulgaria. However, this gas pipeline isn’t only limited in terms of quantity, but is often also subject to the unpredictability of the Bulgarian authorities, meaning that it is unable to represent any long-term guarantee. Connection with Greek gas

Solar panels have also become a profitable business for private individuals.

ade, North Macedonia – as a country that enjoys an extremely high percentage of sunny days – will meet its obligation to close coal-fired power plants (which generate over 60% of the country’s energy) and shift entirely to renewables or environmentally friendly sources. Efforts in this direction include the announced installing of numerous floating solar power plants in

pipelines at the Gevgelija border crossing and the construction of a large gas power plant with Greek money, which should substitute up to 30% of the country’s electricity imports, have long since been announced, though the many disputed points identified in the agreement ensure that it will probably remain on the shelf for some better times. ∙

NONCOMPLIANCE

Despite having declared support for international initiatives and commitments since gaining independence, successive governments have only implemented what is deemed absolutely essential.

BARRIERS

Inadequate infrastructure and high prices, coupled with insufficient state incentives, deter the widespread adoption of electric vehicles, particularly among the middle class.

Regional Diary

Montenegro Starts Mapping Renewable Energy Locations

The Montenegrin Ministry of Energy and Mining signed a Memorandum of Understanding with The Nature Conservancy and Eco-team organisations in early March, thus signalling its readiness to cooperate on promoting the development of solar and wind energy in Montenegro, while simultaneously preserving natural and social values. The memorandum will facilitate the developing and implementing of a national study on the positioning of solar and wind farms in Montenegro, aimed at identifying low-conflict areas for the development of renewables. The transition to renewable energy sources requires special attention to avoid jeopardising biodiversity and cultural, social and economic values.

Region Needs

New Power Plants & Stronger Transmission

The energy ministers of Serbia, Montenegro and BiH’s Republika Srpska agreed at a meeting held in Belgrade that the entire region requires more energy, especially green energy, and that the only way to achieve that is by building new capacities. Serbian Min-

ing and Energy Minister Dubravka Đedović Handanović emphasised the importance of building the Trans-Balkan Electricity Corridor, which will increase capacities on the transmission grid, connecting the markets of Romania and Serbia with those of Bosnia & Herzegovina, Montenegro and Italy. Montenegrin Energy and Mining Minister Saša Mujović stated that it is particularly important to work on strengthening transmission capacities that are crucial for all three sides, while Republika Srpska Energy and Mining Minister Petar Đokić said that certain environmental protection issues need to be addressed.

Free Labour Market Access in Open Balkan Countries

As of 5th March, citizens of North Macedonia, Serbia and Albania are now able to take advantage of free access to the labour markets of each other’s countries, as agreed within the scope of the Open Balkan initiative. This measure removes barriers that previously hindered trade and the free movement of people, as well as enabling the use of electronic services within this regional initiative. Interested citizens should first obtain an Open Balkan identification number on the e-services portal of their country, with which they can apply for approval for free access to the labour market in the other two states. This process is entirely electronic and takes up to 30 days.

Agreements Signed Between EU and Western Balkans

Tirana’s Growth Plan for the Western Balkans Summit included the signing of agreements between the EU and the Western Balkans in four areas. The first agreement pertains to SEPA, which encompasses a comprehensive review of all regulatory aspects, while the second agreement concerns Green Corridors that aim to eliminate all waiting times at border crossings. The third agreement relates to scientific research and requires the establishing of a regional centre to support innovations, research, scientific ex-

ploration and various industries. The fourth agreement involves the provision of free internet networks in public spaces throughout the Western Balkans.

Western Balkans-EU Transport Corridor to be Made Operational

One of the priorities of the Transport Community for 2024 will be to operationalise the Western Balkans-Eastern Mediterranean transport corridor, which connects eight EU member states with the Western Balkans in a unified network for the first time. This process is expected to be implemented in line with the political agreement between the European Parliament and the Council of the European Union on the revision of the Trans-European Transport Network Regulation, which, among other changes, regulates the integration of the six Western Balkan partners into the newly established transport corridor. This corridor starts in Austria, then traverses Italy, Slovenia, Croatia and Hungary, crosses the entire Western Balkans, Bulgaria, and Greece, before ending with a maritime connection to Cyprus.

Serbia and Slovenia Together at Paris Olympics

The national houses of Serbia and Slovenia will collaborate closely during the upcoming Summer Olympic Games in Paris in order to showcase the tourism, culture and economic

potential of both countries. This was agreed upon during a Ljubljana meeting of representatives of the Government of the Republic of Serbia, the Chamber of Commerce of Serbia, the Olympic Committee of Serbia and representatives of the Olympic Committee of Slovenia. Commercial relations between Serbia and Slovenia are experiencing an upward trajectory and this collaboration between the two national houses at the Olympics, aimed at promoting tourism potential, cultural heritage and particularly showcasing investment potential and connecting businesspeople from both countries during the business forum to be held in Paris, will contribute to creating even better cooperation between the two countries.

Energy Future in Focus at SET 2024 Summit

The SET 2024 Energy Summit, which was held in Trebinje from 20th to 22nd March, in-

cluded discussion of the future of energy. The event saw eminent experts, scientists and decision-makers from the region’s energy, business and industry sectors gather for a fifth time. They were united in their belief that energy is a paramount issue that leads to a focus on the energy future and security of Western Balkan countries, energy transition processes – including shifting away from energy production based on fossil fuels, building and strengthening capacities based on renewables and energy efficiency. This is considered as being crucial for all power utility companies of the region and all citizens.

High-Speed Railway to Link Athens and Budapest via Serbia

Greece’s decision to join the construction project for a high-speed railway from Budapest to Athens, spanning 1,500 kilometres, will be historically significant for the Western Balkans, as it will ensure that European Corridor 10 will once again become one of the continent’s most important transport corridors. With another EU member state joining the railway project, all of Central and Western Europe will be able to reach Greece along Corridor 10 from Budapest via Serbia and North Macedonia. This will change people’s lives in Serbia and other countries, enabling the easier transportation of people, but also, and more importantly, the faster transportation of goods and a high-speed connection between Serbia and the Greek ports of Piraeus and Thessaloniki.

Committed to a Green Future

The Government of Montenegro is strongly committed to advancing the green transition, developing policies and programmes, as well as enhancing administrative capacities for the implementation of the Green Agenda for the Western Balkans

NIK GJELOSHAJ

Montenegrin Deputy Prime Minister of Economic Policy and Minister of Economic Development

Montenegro is fully committed to implementing the Western Balkan Growth Plan, which interlinks with sustainable development, innovation and inclusive economic policies, says Montenegrin Dep-

uty Prime Minister of Economic Policy and Minister of Economic Development Nik Gjeloshaj, speaking in this interview.

The Government of Montenegro, as an active stakeholder in these processes, is strongly determined to ensure that its future economic development is fair and based on sustainable development, innovation and inclusive economic growth, confirms our interlocutor.

In which areas does your country excel in terms of green transition and sustainable energy solutions?

― When it comes to energy and energy efficiency, the government’s reforms aim to continue the implementation of measures resulting from the EU’s Third Energy Package and Clean Energy Package in the electricity and gas sectors.

Government measures aim to intensify activities on the creation of an environment favourable to reducing the use of fossil fuels in the transport sector, especially through the improvement of public transport and the promotion of e-mobility.

We will focus on enhancing energy efficiency and increasing the use of renewable sources in order to achieve sustainable development, with highly developed agriculture and tourism, but also more synergy between these sectors. We will encourage the introduction of circular economy principles that integrate the economy and the waste management system.

With the aim of creating conditions for accelerated economic development and further strengthening the Montenegrin economy’s resilience in the face of global challenges, the Ministry of Economic Development has created the National Strategy of Circular Transition until 2030, together with the accompanying Action Plan for the 20232024 period.

It is important to emphasise that Montenegro remains one of only around 30 countries worldwide to

AMBITION

Transitioning to a green economy could help us meet the UN’s Sustainable Development Goals and the targets of the Paris Climate Agreement, helping to achieve carbon neutrality across Europe by 2050.

have such an important policy in place, while it is the only country in the region with such a policy.

This Strategy provides the basis and infrastructure for the economy’s future development and supports the advancement of the country’s investment climate, guided by the principles of economic, social and ecological sustainability.

The Ministry of Economic Development launched the implementation of the Programme for Stimulating Innovative Energy Efficiency Measures in Industry in 2023, working in cooperation with the Ministry of Energy and Mining and the Ministry of Education, Science and Innovation. This programme resulted from the need to establish the necessary synergy of indus-

PERSEVERANCE

Our cooperation, persistence and commitment to sustainable growth could provide an opportunity to expedite our integration into the European Single Market.

work on strengthening business sector competitiveness.

Where do you identify the most significant need for cooperation with Western Balkan partners in achieving the goals of the EU’s Green Agenda for the Western Balkans?

― The Government of Montenegro has expressed its strong commitment to the further process of green transition and has started to develop policies and programmes, and to take the necessary actions to increase administrative capacities for implementation of the Green Agenda for the Western Balkans.

Successfully transitioning to a green economy could help us meet the UN’s Sustainable Development Goals and the targets of the Paris Cli-

We strive for sustainable development through improved energy efficiency and renewable energy, as well as enhanced synergy between agriculture and tourism

trial, innovation and energy policies with smart specialisation priorities. It aims to establish a financial mechanism for improving the operations of micro, small and medium-sized enterprises in the manufacturing industry by introducing innovative solutions and new technologies that will lead to improved energy efficiency, the establishment of an energy management system and an increase in the use of available renewable energy sources.

Diversifying the production sector on the basis of digital transformation will be a prerequisite for our further economic development. We will push efforts to improve the business environment by developing a more diversified set of financial support mechanisms to be offered to MSMEs and will

DEDICATION

We are dedicated to creating an environment conducive to establishing the necessary synergy of industrial, innovation and energy policies with smart specialisation priorities.

mate Agreement, thereby contributing to the European Green Deal’s aspiration to achieve carbon neutrality across the continent by 2050.

As a member of numerous regional initiatives, and through bilateral and multilateral initiatives and actions, projects and activities, Montenegro has set a clear vision and resolve to achieve long-term regional cooperation with its Western Balkan partners.

The Government of Montenegro is fully committed to implementing the Western Balkan Growth Plan, which focuses on sustainable development, innovation and inclusive economic policies.

Initiatives aimed at strengthening cooperation, building capacities and encouraging exchanges of knowledge are crucial to the strengthening and empowering of all Western Balkan economies.

Furthermore, our cooperation, persistence and commitment to sustainable growth could provide an opportunity to expedite our integration into the European Single Market. ∙

STRATEGY Montenegro is the only country in the region to have a Circular Transition Strategy until 2030

Utilising Vital Green Expertise

MFIC is prioritising the green economy

in 2024, as one of

the core policy domains in which member companies will contribute through the Green Economy Transition (ESG) Committee

ARIJANA NIKOLIĆ VUČINIĆ

Executive Director of the Montenegrin Foreign Investors Council

or more than 15 years, the dedicated efforts of the Montenegrin Foreign Investors Council have served to significantly advance the business environment in Montenegro, establishing MFIC as a pivotal link between foreign investors and national decision-makers, but also extending its influence beyond those roles.

FBy introducing and promoting the world’s best business practices, MFIC member companies have contributed significantly to transforming business and management standards in the country. I believe that this is one of the key values of our organisation: MFIC represents a vast knowledge base and expertise that can be utilised to make strategically important shifts in the country’s development. There is no doubt that the green economy is one of them, and that achieving goals in this area will prove significantly more successful if our members’ potential is utilised. The importance of this issue for our organisation was confirmed by last year’s adoption of the MFIC Strategy for 20242026, which we developed with the assistance of the prestigious Boston Consulting Group. Transitioning to a green economy is indeed one of four focus areas that will be our priority in the coming period.

Our members, who represent diverse sectors such as banking, telecommunications, energy and tourism, bring a wealth of experience in implementing advanced ESG standards. Our most valuable contributions lie in sharing comprehensive ESG strategies, promoting the development of renewable energy and enhancing sustainable practices across industries. By leveraging our members’ enviable expertise, we aim to facilitate a robust

With support from the Boston Consulting Group, we last year adopted the 2024-2026 MFIC Strategy, which prioritises shifting to a green economy among four key focus areas

green transition in Montenegro, ensuring that the knowledge transfer aligns with local needs and global sustainability goals. When it comes to the policy domains that are relevant to MFIC, by driving structural reforms in the Montenegrin economy that further the transition to a green economy, we will focus on energy market development and green energy transition, the sustainable management of mineral resources, the promotion of the agriculture and fishery sectors through sustainable resources, sustainable water management etc.

MFIC is prioritising the green economy in 2024, as one of the core policy domains in which member companies will contribute to driving this initiative through the Green Economy Transition (ESG) Committee. This MFIC committee’s main goal for 2024 is to identify key ESG reforms to promote and to propose specific reforms/ best practices for MFIC. Our efforts are concentrated on formulating precise recommendations for government policies, shaping legislative frameworks and championing specific green initiatives. Key contributions will include advancing ESG policy integration, fostering the development of a sustainable energy market and promoting the responsible management of natural resources, including minerals, agriculture and fisheries.

We will also establish MFIC sustainability principles and adopt an internationally acknowledged ESG framework for members. Launching annual ESG reporting on the MFIC members’ decarbonisation efforts is also planned to motivate the entire business sector to follow our example. ∙

Responsible Governance is Crucial

By drawing on its unique regional insight and global sustainability expertise, Sustineri Partners hosts the ESG Adria Summit – an essential platform for companies to share green transition best practices

BILJANA BRAITHWAITE

CEO and Founding Partner of Sustineri Partners; Founder of the ESG Adria Summit

The European Union’s six-billion-euro Growth Plan for the Western Balkans holds immense potential for the region, possibly doubling its economy over the next decade and fostering closer economic ties with the EU. Economic convergence is crucial to the Western Balkans advancing along the path to EU accession. Standing at around 35% of the average EU level, the current lack of convergence remains a major challenge for the region. The EU’s Growth Plan seeks to address this by accelerating the economic integration of the region and aligning it with the European Single Market.

Biljana Braithwaite, as CEO and Founding Partner of Sustineri Partners and Founder of the ESG Adria Summit, sees the importance of the plan in the fact that it also aims to further the region’s transition to more sustainable, inclusive economies and to create a stable investment environment. “In the realm of ESG (Environmental, Social and Governance), it offers opportunities to accelerate the green transition, in line with the Green Agenda for the Western Balkans. It also aims to integrate the Western Balkans’ energy market with that of the EU, focusing in particular on renewable energy, facilitating the transition to a decarbonised, climate-neutral, cli-

mate-resilient and circular economy,” explains our interlocutor.

Braithwaite notes that this provides significant opportunities for innovation and investment, especially for SMEs, while promoting social dialogue and gender equality. At least 37% of grants from the Growth Plan will be directed towards climate objectives. Moreover, the plan targets the integrating of the Western Balkans into European industrial supply chains, fostering strategic partnerships around sustainable raw materials and securing supplies of critical medicines.

This also creates immense potential for the Western Balkans to align the operations of local companies with ESG principles.

“Contextual knowledge of the region, alongside deep expertise in European and global standards, is as crucial as it is rare. Recognising this growing need, we have not only formed Sustineri Partners to provide sustainability strategy advice to companies, but have also established the ESG Adria Summit. This is now a leading regional event dedicated to green transition, sustainable development and responsible corporate governance, where companies can connect and share best practices,” explains Braithwaite.

ESG standards were viewed for years as being “nice to have”, but optional for businesses, while they’re now recognised as a “table stakes” item.

The ESG movement has translated into concrete legislative action, imposing binding obligations on corporate stakeholders for human rights and environmental standards

“It is of utmost importance for governments, as policymakers, to effectively implement and operationalise ESG-related policies to have an impact and incentivise companies and organisations to meet the UN SDGs, towards net-zero targets, and in building a better, more just and sustainable future for all,” notes Braithwaite. “Additionally, businesses should rely on professional associations and expert companies specialising in sustainability and providing guidance and support to companies in the region”.

“Greater awareness and engagement concerning these standards will be essential to increase trade, reduce unemployment and enable participation in the global and EU economies. Businesses that take into account ESG standards are also more likely to identify and mitigate risks associated with environmental, social and governance issues, as well as innovate and develop new products and services to address these concerns. Over 80% of investors today consider ESG when investing,” concludes our interviewee. ∙

Much Talk, Few “Green” Policies

Montenegro has a noticeable lack of “green” policies and recognition of ecological issues among both individuals and institutions. It therefore lacks an adequate response to address accumulated environmental problems

By ŽELJKA RADULOVIĆ Journalist

whopping 32 and a half years have elapsed since Montenegro was first declared an ecological state. And yet, just like that first day, the reality differs from resounding goals and promises. Declaratively, the world’s first ecological state was supposed to adopt and implement the highest standards and norms in the field of environmental protection, nature conservation and economic development based on the principles of an ecologically sustain-

Aable system... However, the country’s environment is being devastated in various ways. Apart from the global issue of climate change, much else remains unresolved in Montenegro, such as air pollution, illegal dumps, waste management, wastewater treatment, illegal construction etc.

Beautiful words and objectives for Montenegro to become a green oasis in the Balkans and a truly ecological state are echoed in unison ahead of every election, given that they have the declarative support of citizens, local communities, institutions and organisations... However, what usually

drives citizens to ecological actions and activism isn’t ecological awareness and systematic action, but rather incidental situations or “when push comes to shove”.

Pljevlja resident Elzana Hrković recently sued Montenegro over air pollution in the town, claiming that the state has violated her right to a healthy environment. Air pollution in this mining town in northern Montenegro has been a decades-long problem, and the city was ranked among the world’s most polluted in December 2023, according to data from the WAQI (World Air Quality Index) website, which provides real-time information on air pollution.

Local industries in Pljevlja – including the thermal power plant and coal mine – along with heating systems and traffic, are the main sources of air pollution in this town, while domestic monitoring stations have shown that Pljevlja residents breathed polluted air for 124 days last year, with concentrations of harmful PM particles significantly exceeding the permitted level. This prompted Hrković to announce that, if she fails in domestic courts, she will sue Montenegro in Strasbourg.

Also testifying to the situation in Pljevlja is the fact that high levels of air pollution prompted NGO “Breznica” to request that the Ministry of Education postpone the start of the second semester in the town because students have to leave for school at seven in the morning, when temperatures are minus ten and the concentration

of PM10 particles is five or more times higher than the permitted level.

While Pljevlja’s inhabitants struggle to cope with smog and their initiatives are barely heard elsewhere in the country, at the other end of Montenegro, residents, associations and environmental activists prevented –through protests that began in the summer of 2019 – part of Mount Sinjajevina from being turned into a military training ground for the purposes of the Army of Montenegro. The Sinjajevina range is considered the largest mountain grazing area in the Balkans, stretching 35 to 40 km in length and 10 to 15 km wide. However, the political juncture was also significant because, with the August 2020 change of government in Montenegro, every subsequent government avoided the issue of the military training ground and chose “not to touch Sinjajevina” because “the army can train elsewhere”.

Thus, apart from environmental activism, the political juncture was also crucial for the success of any environmental initiative. And while grazing pastures and summer settlements on Sinjajevina were saved, more than 4,000 households in Pljevlja, who heat their homes with coal and wood during the winter, alongside the nearby Thermal Power Plant, are still caught in a vicious circle. Despite all activism and initiatives, smoke and soot from heating and harmful emissions from the thermal power plant still increase the concentration of carcinogenic PM2.5 particles in the air—exceeding the permitted level by up to ten times.

Returning from individual examples to the national level, Dr Ivana Vojinović, Director of the Centre for Climate Change at the University of Donja Gorica (UDG), reminds us that Monte-

EDUCATION

Citizens know little about the phenomenon of climate change and preventative measures that can positively impact the environment and reduce negative consequences.

negro “belongs to the region of Europe that’s most vulnerable to the consequences of climate change”.

As Professor Vojinović points out, Montenegro must increase its climate ambition, in terms of reducing greenhouse gas emissions from the existing target of 35% to a target of 55% by 2030, and accelerate the adoption of the National Energy and Climate Plan, which should be integrated into the EU’s climate-energy framework by 2030.

The director of the Centre for Climate Change states that as much as 75% of GHG emissions in Montenegro are sourced from the energy sector, mainly from coal-based energy production at the only thermal power plant, in Pljevlja, and adds that the process of energy transition and the shift to renewable sources must

There is no trace of an ecological state in the mining town of Pljevlja, while residents joke that they no longer greet each other with “see you later”

be fair and socially acceptable to the residents of Pljevlja and the whole of Montenegro.

However, she admits that citizens generally know little about climate change and preventative measures that can have a positive impact on the environment and reduce negative consequences. Vojinović emphasises that, when it comes to combating climate change, it is crucial to involve citizens, especially through the edu-

cation of young people, which previous generations did not receive.

“This is because science indicates that today’s climate changes mostly come from human activities, such as burning fossil fuels, changes in land use (e.g., deforestation, urbanisation etc.), which together increase the concentration of gases in the atmosphere,” explains Vojinović.

She notes that climate change has already had a negative impact on every region of the planet, and that many of the changes observed in the climate are unprecedented over thousands, if not hundreds of thousands, of years.

POLLUTION

Pljevlja residents breathed polluted air for 124 days last year.

“Cities should also play a significant role in the process of adapting to climate change. The reason for highlighting them in the fight against climate change is that most of the population lives in urban areas, so local authorities must adopt so-called green spatial plans, which is also an obligation of the EU Biodiversity Strategy for 2030 for every settlement that’s home to more than 25,000 inhabitants,” concludes Vojinović. ∙

COAL

As much as 75% of greenhouse gas emissions in Montenegro come from the energy sector, mainly from coal-based energy production.

ACTIVISM

The ecological actions of citizens and a change in the political climate saved Sinjajevina, which is considered the largest mountain grazing area in the Balkans.

Share of fossil fuels in gross available energy

The energy mix is heavily tilted towards fossil fuels, with 70-80% of the energy used coming from such sources. Albania is the only exception, with a lower share of fossil fuels even than the EU countries

Data source: Eurostat

Kosovo* Austria North Macedonia Serbia Slovenia Montenegro Croatia

Bosnia and Herzegovina

Business Pulse

Contents

56 Longstanding Regional Business Practices

Henkel

58 ESG also Vital for Banking

NICOLAS MARQUIER

Regional Manager for the Western Balkans at the International Finance Corporation (IFC)

59 Focus on Capital Projects

IVAN BULATOVIĆ CEO, Electric Power Company of Montenegro

60 The Store of the Future Avolta

62 Making an Impact

PETR HERMANN

President of the Schneider Electric cluster for Southeast Europe

63 ESG Strategy Implemented Consistently

MILICA OBRENOVIĆ

Senior Specialist for Operational Risk and Internal Control at Addiko Bank

64 Mining’s Role in Europe’s Sustainable Future

CHAD BLEWITT

Acting Managing Director of Rio Tinto’s Jadar Project

Business Pulse

66 Smart Traffic Solutions for Client Full Satisfaction ElcomBgd

67 Tivat Lives Year-Round

NINA LAKIČEVIĆ

Director of the Tourist Organisation of Tivat

70 Your Major Competitive Advantage

Dun & Bradstreet ESG Intelligence

72 The Future Belongs to Green Projects

DRAGAN VLAHOVIĆ

CEO of Zeta Energy Danilovgrad

JEFIMIJA PAVIĆEVIĆ

Financial Director of Zeta Energy Danilovgrad

73 Your next Cruise is just a Click away!

MIHAILO VUKIĆ

Owner, Allegra Cruises

74 Confident in its Leading Position!

PROKOPIJE PERIĆ

CEO, PLUS d.o.o.

Longstanding Regional Business Practices

It was way back in 1992 that Henkel became one of the first companies to issue an annual report on sustainable operations, and in so doing established clear goals

Henkel has been present in our region for decades, with operations in Slovenia, Bosnia & Herzegovina, Croatia and Serbia. It has production sites in Kruševac, Maribor, Inđija and Bileća, while its administrative centres are in Belgrade, Zagreb, Ljubljana and Sarajevo.

Henkel is a company that has been building a strong corporate culture for the last 148 years, amassing a legacy and forging a future for the benefit of all generations. With its two sectors of Adhesive Technologies and Consumer Brands, coupled with its many brands, innovations and technologies, this company occupies leading market positions in the industrial and consumer sectors worldwide. As a company with around 48,000 employees worldwide, Henkel is both a

short- and long-term goals. A global sustainability strategy is applied in all countries where Henkel operates, and runs through the entire value chain, encompassing company activities that contribute to social progress and environmental preservation through the active participation of employees. The products and technologies of our strong brands, such as Loctite, Schwarzkopf and Persil, form a basic necessity of daily life for people in more than 100 countries.

DECADES PRESENT IN THE REGION

Henkel has been present in our region for several decades, with operations in Slovenia, Bosnia & Herzegovina, Croatia and Serbia. Thanks to teams with great expertise and highly motivated employees, we have production sites in the region – in Kruševac, Maribor, Inđija and Bileća – that are extremely important to both business sectors of the Henkel system. Meanwhile, the administrative centres of our operations are located in Belgrade, Zagreb, Ljubljana and Sarajevo.

leader in sustainability and a pioneer in the applying of new sustainable development solutions. It was way back in 1992 that Henkel became one of the first companies to issue an annual report on sustainable operations, and in so doing established clear goals. The first Henkel Sustainability Strategy was published in 2010 and contained ambitious and measurable

It was almost 35 years ago, with the privatisation of the Zlatorog Factory, that Henkel entered the Slovenian market and began building its success on the back of high-quality processes, brands and technologies, together with the satisfaction of consumers and employees. Henkel Maribor is home to the ‘European Competence Center for Hair Coloration Manufacturing for Henkel Consumer Brands’ and represents one of the key manufacturing locations in this business sector’s supply network.

The key to Henkel Maribor’s suc-

COOPERATION THAT BEGAN HALF A CENTURY AGO

It was early in the new millennium that Henkel, in recognising the Serbian market’s potential and advantages, the strength of local brands and the country’s excellent geographical position, set the clear goal of Serbia becoming a regional hub for manufacturing and distribution. The famous Merima company from Kruševac became part of the Henkel CEE group in 2002. It is interesting to note that both Merima and Henkel were founded in the 19th century and that their first collaboration – on the joint production of Persil – was realised in the early 1970s.

Belgrade, Serbia

cess lies in the swift responses of all employees to changes; in their motivation and expert knowledge in the fields of research and development, packaging and microbiology, which contributes significantly to the company’s success and dedication to high-quality work.

NO SUCCESS WITHOUT VISION

As a company with around 48,000 employees worldwide, Henkel is both a leader in sustainability and a pioneer in the applying of new sustainable development solutions

CELEBRATING A MAJOR JUBILEE

Henkel Croatia is based in Zagreb and is this year celebrating

The vision of Serbia as a manufacturing hub supplying tens of millions of consumers worldwide with Henkel detergents and household chemical brands, as well as products from the Ceresit portfolio, has been realised thanks to strong teams in Kruševac, Belgrade and Inđija. With its two business sectors –Henkel Consumer Brands and Adhesive Technologies – Henkel holds a leading market position in both industrial products and consumer goods. The manufacturing site in Kruševac, where the installation of one of the biggest solar power plants in the Henkel system is currently underway, ranks among the top factories, thanks to its results and a dedicated team. It represents a complex manufacturing system with a regional logistics centre, while it is also a centre of innovation and an exclusive supplier to world markets. Apart from its importance to the Henkel system, this factory also plays a strong role in supporting Serbia’s economic growth.

30 years of successful operations. In the build up to this major anniversary, the offices have been renovated and given a new and modern open-space makeover based on the Smart Work concept. This concept had already been implemented at several Henkel locations and has now also arrived in our region. A pleasant and nicely arranged workspace provides additional motivation for employees, who the company consider as being its best ambassa-

INVESTING IN SUSTAINABILITY PAYS OFF

Henkel Maribor invested in its sustainability early this year by installing solar panels on the roof of its building, with the aim of increasing its energy production from renewables. These solar installations have a power generation capacity of 738.45 kWh, covering 10% of the company’s annual electricity needs. The energy produced will be equivalent to reducing CO2 emissions by 196 tons a year, or planting 8,900 trees.

dors. Caring for employees is one of the most important values nurtured at Henkel.

Henkel has been present at two locations in Bosnia and Herzegovina for many years: Sarajevo and Bileća. As of last year, the Ceresit factory in Bileća has been among the first Henkel factories worldwide to become fully carbon neutral. Thanks to its geographical location, the city of Bileća enjoys 2,200 hours of sunlight annually, which makes it one of the most favourable locations to invest in solar energy. Interestingly, this site was also selected because a supplier of ground calcium carbonate, the most important raw material for Ceresit products, is located in the immediate vicinity. ∙

EMPLOYEES COOPERATE MUTUALLY

Henkel’s operations across the region comprise employees with various profiles, experiences and skills, who – through their mutual cooperation, respect and commitment – make a difference and set an example of successfully doing business. Henkel dares to make significant changes and to contribute to creating a more sustainable future; We dare to make an impact, as pioneers at heart, for the good of generations.

Zagreb, Croatia

Inđija, Serbia

Bileća, Bosnia & Herzegovina Kruševac, Serbia

Maribor, Slovenia

NICOLAS MARQUIER

Regional Manager for the Western Balkans at the International Finance Corporation (IFC)

s part of the upcoming ESG Adria Summit, the IFC is organising a capacity building event for banking associations from the Western Balkans intended to help deepen their knowledge of ESG and sustainable finance, and here the IFC’s Nicolas Marquier explains why ESG practices are so important.

AThe Government of Serbia has made transitioning to a green agenda one of its priorities. What does that mean for us?

― The Serbian government’s commitment to the green agenda included issuing the landmark Green Bond Framework in 2021 and strengthening ESG practices and capital market disclosures.

By definition, the transition to a green agenda means adopting sound ESG practices throughout the economy, but it also means companies and financial institutions actively considering their environmental and social impact. Adopting sound ESG practices is also good for business, as it helps organisations to manage risk and to provide safe and appropriate goods and services, and to do so without causing undue harm to the environment.

Serbia has also adopted some European Union ESG reporting standards, stemming from the Law on Accounting, which obliges companies that have 500 or more employees to make ESG disclosures. While the EU’s ESG rules mainly target financial institutions

ESG also Vital for Banking

Transitioning to a green agenda means adopting sound ESG practices throughout the economy,

but

it also means companies and financial institutions actively considering their environmental and social impact

within the EU, Serbian firms and banks are indirectly impacted because of their EU parent firms and banks, services offered in the EU, and market pressures.

Many banks in Serbia are driven by these EU parent banks, which are mandated to adopt ESG practices like the Sustainable Finance Disclosure Regulation (SFDR). This requires financial institutions to incorporate ESG factors when making investment decisions. The EU’s new Corporate Sustainability Reporting Directive also mandates a broader range of companies (including banks) to disclose detailed sustainability information to support the SFDR’s data needs.

new Sustainable Finance Guidelines, which were published on 11th March. These guidelines are based on the contributions of member banks of the ASB’s Sustainable Finance Working Group and build upon the results of a survey developed in partnership with the ASB and distributed to Serbian banks in early 2023.

As the first voluntary ESG guidelines issued by an SBFN member in the region, they represent a milestone and provide Serbia’s financial institutions with sound guidance on incorporating ESG principles into their business activities. The fact that they are voluntary and result from the suggestions and contributions of member banks, rather than a reg-

Serbia has also adopted some of the EU’s ESG reporting standards, obliging companies with 500 or more employees to make ESG disclosures

Does the Sustainable Banking and Finance Network (SBFN) include regulators and banking associations that operate in all countries of the region?

― The SBFN actively promotes exchanges of views and ideas among members. It also shares technical resources to promote sustainable finance across financial markets, including capital markets, institutional investment and insurance.

Have there been more specific activities to encourage the application of ESG practices in Serbia’s banking sector?

― The ASB [Association of Serbian Banks], with IFC support, developed and finalised its

ulatory push, also means many more banks are likely to follow through.

Experience from other SBFN members shows that industry association initiatives like this one can also motivate regulators to initiate changes, because they highlight the sector’s commitment to adopting sustainable finance and ESG practices.

IFC Europe and Central Asia’s Integrated ESG Advisory Programme, in partnership with the Swiss State Secretariat for Economic Affairs, SECO, is also working to improve financial sector efficiency by building sustainable financial markets that factor ESG into capital allocation and encourage SBFN participation. ∙

Focus on Capital Projects

As the flagship enterprise and cornerstone of the Montenegrin energy sector, EPCG is dedicated to implementing an investment plan worth around 700 million euros that ensures a continuous reliable supply to all consumers

IVAN BULATOVIĆ

CEO, Electric Power Company of Montenegro

Here we discuss planned investments, the construction of new energy facilities that are primarily based on renewables, the modernisation of existing production facilities, and the company’s development vision and plans with Ivan Bulatović, new CEO of Electric Power Company of Montenegro.

We congratulate you on your appointment. Could you share with us your vision for the company?

euros. There are capital projects, such as the Gvozd Wind Farm, construction of which is expected to start this year, the Komarnica Hydropower Plant, the Kruševo Hydropower Plant, the construction of new solar capacities and completion of the Solari 5000+ 70MW project.

The Montenegrin energy sector has shown its resilience and sustainability. Is it now time for a new era of growth and innovation?

― It is always time to invest in new sources of electrical energy, because we haven’t utilised even a third of total water resources. In terms of solar and wind energy, we have only just begun to exploit the immense potential. We must devote ourselves seriously to developing projects in this area if we are to become

It is important for us to raise consumer awareness regarding energy efficiency and to highlight the importance of developing renewable energy sources, i.e., green energy

― Thank you for offering congratulations… Our vision and plans centre around the construction new energy sources, with a focus on renewables. They represent the future – not only for EPCG, but for Montenegro’s energy sector as a whole. The company embarked on this journey prior to my arrival. I will insist that we persevere on this path, which, I must remind you, involves implementing an investment plan worth approximately 700 million

a serious player in regional terms, positioning EPCG as a so-called off-taker for the purchase of green energy from Montenegro and the region.

Additionally, the constructing of many new sources of electricity in Montenegro and the region provides an opportunity for EPCG to position itself as a provider of ancillary and systemic services, which would contribute to further stabilising the pow-

er system by providing very expensive balancing energy. We also mustn’t overlook the modernisation of existing production facilities, the environmental reconstruction of the thermal block at TPP Pljevlja, diverting excess water from the Zeta River to Krupac and Slano, installing Unit A8 at HPP Perućica, and a whole range of other tasks that will ensure a continued safe and reliable supply to all consumers in Montenegro.

EPCG has seriously entered into the energy transition process. What is your focus?

― We have seriously embarked on an energy transition journey with the intention of it being fair and of any potentially negative consequences of this process not being felt by the employees at TPP Pljevlja under any circumstances. We strive to provide a concrete contribution to environmental protection and the realisation of green ideas, including procuring electric vehicles for EPCG’s needs and meeting environmental standards in the operation of the Pljevlja Thermal Power Plant and Coal Mine Pljevlja. We are also very keen to raise consumer awareness regarding energy efficiency and to highlight the importance of developing renewable energy sources, i.e., green energy. We are interested in innovation in the field of e-mobility, the development of a floating solar power plant on Lake Slano and projects in the field of green hydrogen. We certainly devote great attention to employee education and the digitalisation of our internal business processes. ∙

The Store of the Future

Avolta has secured a new seven-year contract at Belgrade Nikola Tesla Airport that encompasses ten duty free shops and includes hybrid elements with food & beverages, occupying a total area of more than 3,500m2

Having successfully operated the duty-free stores in the airport since 2006, new contract signifies more than just the extension of a business agreement; it symbolizes strengthening Avolta’s presence in Eastern Europe.

Avolta is delighted to announce the win of a new seven-year concession contract at Belgrade Nikola Tesla airport, encompassing the operation of ten duty-free shops, including hybrid elements. With a combined floorspace of more than 3,500 m², these new shops will offer a distinctive travel retail experience masterfully blended with food & beverage for travelers through Serbia’s busi-

est airport, strengthening Avolta’s presence in Eastern Europe.

Having successfully operated the duty-free stores in the airport since 2006, this contract win signifies more than just the extension of a business agreement; it symbolizes an opportunity for Avolta to deepen its collaboration with airport partners, innovating through hybrid concepts, giving travelers the best of both travel retail and F&B. In this way, it further reinforces the value fostering innovation and delivering a superior travel experience seamlessly integrating retail and F&B services.

The centerpiece of the new retail space is a remarkably sized walk-through duty-free store, the newest of Avolta’s ‘store of the future’, showcasing a strong sense of place with a diverse range of brands and travel exclusive products across all core product categories. Alongside a sleek and interactive Apple shop-in-shop concept, Avolta introduces two additional shop-in-shop concepts, its latest wellbeing concept mind. body. soul. catering to the growing demand for health, wellbeing and sustainability focused products, as well as its immersive phygital experien-

Alongside an Apple shop-in-shop concept, Avolta is introducing two additional shop-in-shop concepts – its wellbeing concept mind. body. soul

tial concept Haute Parfumerie, elevating the fragrance discovery experience.

Leveraging Avolta’s travel retail and food & beverage strengths, the new space includes a strong hybrid element to this expansive space with three distinct food & beverage concepts. A Welcome Bar greets travelers at every entrance with a range of beverages and icecream and a small seating area, while our mind. body. soul. café builds on the shop-inshop concept to offer organic products like fresh juices and healthy raw cakes with a dedicated small seated area. Our Rakia Bar, celebrating the region’s potent fruit brandies, offers a full selection of Rakia with customer sampling in a large bar and seated area complemented with a full menu of warm meals and sandwiches.

In addition, Avolta will operate five fashion boutiques representing renowned brands such as Boss, Ralph Lauren, Michael Kors, Victoria‘s Secret and Avolta’s multibrand store concept Urban Attitude. Two dedicated children’s shops, Candy Fair and Toy Fair, will provide a delightful shopping experience for younger travelers. Specialized souvenir store, „Belgrade Market“ will embody the spirit of the region, celebrating local products and bringing a strong sense of place.

Commenting on the new contract, Luis Marin, Regional President and CEO EMEA for Avolta AG said „We are extremely proud to have been awarded this contract in Belgrade and we would like to thank VINCI and the airport team for the continued trust they have shown in us.

As the leading global travel experience player – and now as a combined business – we will use our extensive knowledge and exper-

tise in this region to take the airport’s shopping experience to an entirely new level, for the over seven million passengers who visit Belgrade Nikola Tesla airport each year. This contract win is a demonstration of the momentum in our EMEA growth strategy, adding to the continued performance and positive expectations we see across all our geog-

Avolta will run five fashion boutiques representing brands such as Boss, Ralph Lauren, Michael Kors, Victoria‘s Secret and Avolta’s multibrand store concept Urban Attitude

raphies as most recently demonstrated in our strong Q3 results – another quarter in which Avolta delivered its targets“.

Miodrag Mirkovic, Chief Commercial Officer at Belgrade Airport, said, „We are delighted to continue the successful cooperation with Avolta and enhance it further, thanks to the three times larger future commercial areas than before. The planned store-of-the-future concept at our airport will be among the first in Europe, and our passengers will be able to enjoy this next level of design innovations, engagement and comfort offered“.

About Avolta: Avolta AG, (SIX: AVOL) is a leading global travel experience player. With the traveler at its strategic core, Avolta maximizes every moment of the traveler’s journey through its combination of travel retail and travel food & beverage, passion for innovation and excellent execution. Avolta’s well-diversified business across geographical, channel and brand portfolio pillars operates in 75 countries and 1,200 locations, with 5,500 points of sale across three segments –duty-free, food & beverage and convenience – and various channels, including airports, motorways, cruises ferries, railway, border shops and downtown. An inherent element of Avolta’s business strategy is found in ESG, aiming for sustainable and profitable growth of the company while fostering high standards of environmental stewardship and social equity – making meaningful impact in the local communities. The company’s access to 2,3 billion passengers each year reinforces the power of it’s more than 60.000 people, committed to surprising guests and delivering solid execution, supporting the company in creating value for all stakeholders. ∙

Making an Impact

Schneider Electric invests consistently in its research and development centres, production, and bringing global expertise to Southeast Europe

PETR HERMANN

President of the Schneider Electric cluster for Southeast Europe

e discussed digitalisation and the modernisation of energy infrastructure, software being developed by the company’s Serbian team in Novi Sad, the building of the future and many new solutions with Petr Hermann, president of the Schneider Electric cluster for Southeast Europe

WDo you think we are lagging behind in terms of the digitalisation and modernisation of energy infrastructure?

― Serbia holds a special place within the Schneider Electric family, with a journey that’s lasted more than 20 years. Energy management and digitalisation are at the core of our business mission. Among our widely acclaimed software is ADMS, our comprehensive network management solution for grid optimisation. This software, which is developed by our Serbian team in Novi Sad, is currently also being implemented by the Serbian utility company.

We actually recently finalised a contract for the modernisation and automation of Serbia’s electricity distribution net-

work, marking an important milestone. This ambitious initiative aims to greatly improve the reliability of supplies of electricity to customers, while simultaneously reducing power outages and enabling reductions in power lossess. We will be implementing this comprehensive solution over the next four years, coupled with advanced network automation equipment, leading to a significant boost in performance. Following the implementation of this project, the Serbian power distribution network will be among the most advanced in Europe.

Your premises in Novi Sad represent the building of the future?

― Our building, which was recently awarded the prestigious Platinum LEED certification, serves as a concrete example of what we are offering our customers and sets high standards for green construction in the country. It is noteworthy that this is not a greenfield investment, but rather a reconstruction project. This also proves that we can use technology that already exists today in order to significantly improve current facilities and achieve energy savings. However, in order to do so we need to implement several sustainable practices, such as the utilisation of renewables,

the automation of building operations, shifting to electric vehicle fleets and much more.

Since its opening, our building, as well as our “Innovation Hub” showroom, has also been serving to showcase our capabilities in energy management and automation. It is open to our customers from across the region.

What makes our region so appealing to technology companies?

― This region boasts a highly-skilled workforce with a strong background in technical and engineering fields, providing a valuable pool of talent for research and development initiatives. Additionally, the region’s strategic location enables efficient global operations and access to diverse markets. Moreover, we see ever-more ongoing efforts to enhance infrastructure, while com-

panies in this part of the world are also starting to move towards more efficient, digitalised amd sustainable operations, and Schneider Electric is here to help.

As a result, we have made significant investments in the region, both in growing our commercial teams and extending our production capabilities in Bulgaria and Hungary, and even in opening a new production unit this year. Our footprint in the region also includes a regional logistics centre, global sustainability services and a global procurement hub in Hungary, as well as a regional customer care centre in Romania.

In Serbia, we’ve recognised the exceptional IT talent and our already strong software development team is being further extended to become a strategic hub of global sofware R&D for Schneider Electric. ∙

MILICA OBRENOVIĆ

Senior Specialist for Operational Risk and Internal Control at Addiko Bank

he concept of sustainable operations should penetrate all structures of a company, which in the case of Addiko Bank is confirmed by initiatives which relate, to a lesser or greater extent, in a direct or indirect way, to all employees, our cooperation with clients and community relations.

TYour bank has its own clearly formulated ESG strategy?

― At Addiko Bank, we have a clearly conceived ESG Strategy that represents a framework for our operations in the ESG domain, paying equal respect to all three components, E and S and G. Through our ESG Strategy, we not only provide a framework and direction for our business, but in so doing also impact on the awareness of our employees, but also the awareness of our clients. We consider raising awareness as being crucial at this juncture when a seemingly new field is impacting all aspects of our daily lives, both business and private, becoming an inextricable part of life.

ESG Strategy Implemented

Consistently

Introducing ESG principles and establishing

sustainable operations are becoming almost imperatives, which is why Addiko Bank has been devoted to working on them for years

How do you implement your ESG strategy?

― Under the scope of the ESG Strategy, Addiko Bank made the ESG concept formal through 15 initiatives, devoting five initiatives to each component, and working continuously to fulfil them through its operations, because these defined initiatives form an integral part of the Addiko Bank business culture. Addiko Bank launched its digitalisation process before the media even started addressing the ESG concept, rendering its services more accessible and environmentally acceptable. We are continuously adapting to the needs of our clients, alongside simplifying the process of submitting requests, shortening implementation times and continuously advancing our IT infrastructure and protection system.

With the goal of increasing its climate neutrality, Addiko Bank is replacing its existing ICE vehicles with electric and hybrid vehicles, optimising its business space, implementing a hybrid work model and forming green partnerships, while taking into consideration No-Go branches of industry, thus also reducing its carbon footprint through the lending process.

Addiko Bank supports social equality at all levels, taking care to consider diversity and inclusion, fostering a culture of appointing significant numbers of women to management positions and maintaining a continuous commitment to employees’ personal development and wellbeing through professional development and support in the balance between business and private life, but also through community support in the form of humanitarian work and programmes for volunteering employees.

its memberships in associations dedicated to the ESG mission, Addiko Bank enables the smooth functioning of the ESG concept, through well-established corporate governance.

Do Addiko’s sustainable operations goals apply to the entire Group?

― Addiko Group sets goals that are modified very slightly at the level of each member, in accordance with the market on which the member operates and the extent to which it is possible to realise set goals. They remain un-

Addiko Bank launched its digitalisation process before the media even started addressing the ESG concept, rendering its services more accessible and environmentally acceptable

By nurturing the Tone at the Top principle, through the promoting and protecting of financial literacy, lifelong education, adequately established corporate bodies and respect for the existing Code of Business Conduct and Ethics, but also thanks to

changed in principle and, most importantly, the end result is the same and relates, among other things, to reducing the carbon footprint and promoting gender equality and the wellbeing of employees and the community in which we live. ∙

RIO TINTO’S JADAR PROJECT

Mining’s Role in Europe’s Sustainable Future

International competition to secure critical raw materials is resulting in a once-ina-generation shift in Europe that’s focused on the importance of mining to the green energy transition

CHAD BLEWITT

Acting Managing Director of Rio Tinto’s Jadar Project

had Blewitt is the acting managing director of Rio Tinto’s Jadar Project, which is regarded as being among the most significant lithium deposits in Europe. The Serbia Government cancelled the project’s permits in January 2022, in response to protests in Belgrade over environmental concerns. Rio Tinto be-

Clieves those concerns are unfounded and that Jadar’s lithium can be mined responsibly, meeting Serbian, European and international environmental standards.

While mining companies have

the central responsibility in developing projects like Jadar, a joint approach between companies, communities, policymakers and other industry stakeholders, such as NGOs/CSOs, customers and suppliers, is needed

Rio Tinto is investing in new technologies, new innovations and new ways of working to be significantly more sustainable and responsible

to ensure critical raw materials are mined to the highest standards. The green and digital transitions are not possible without mining, though extracting the crucial minerals needs to be done responsibly. The economic and societal benefits generated by mining don’t need to come at the cost of the environment.

How can mining help address the climate crisis?

― There is a crunch coming that’s related to the demand and supply of critical raw materials. As the world races to decarbonise and transition away from fossil fuels, critical raw materials are key ingredients in many technologies that will support the green transition, such as batteries for electric vehicles, wind turbines, solar panels and electricity networks.

Demand, however, could outstrip supply. A World Bank report highlighted that the world needs an anticipated 500% more critical raw materials than are currently being produced to enable successful green and digital transitions by 2050. That’s the equivalent of three billion tons of minerals that need to be mined. Given this anticipated increase in demand, the mining industry is under constant scrutiny from investors, regulators, customers and society at large, in an effort to ensure a sustainable future doesn’t come at the expense of today’s environment.

Rio Tinto is continuing to develop ways to meet demand, and minimise impacts. Scientists at our technology centre in Sorel-Tracy, Quebec, Canada, have found a way to extract and purify scandium – a critical mineral used in aerospace and clean technology – from titanium dioxide production waste.

To allow stakeholders to track the impact of our operations, this March Rio Tinto became the first major mining company to publish site-by-site water usage data in 35 countries, through an interactive map on our web -

CHALLENGES

The crucial challenge for the mining industry is to demonstrate that 21st century mining can deliver the minerals the world needs, but in a way that minimises negative impacts, works with the communities in which it operates, brings social and environmental benefits and leaves former mining sites rehabilitated to the highest standards.

site. The database details permitted surface water allocation volumes, the site’s annual allocation usage and the associated catchment runoff from average annual rainfall estimates.

The company also recently launched a new and interactive tailings map on the Rio Tinto website. Responsible tailings management is critical to ensure the safety of our employees and communities, and to protect the environment. It is fundamental for our business and social license.

The green and digital transitions are not possible without mining, though extracting critical minerals needs to be done responsibly

What is Rio Tinto’s approach to sustainability and ESG standards?

― Mining is changing. Rio Tinto is investing in new technologies, new innovations and new ways of working to be significantly more sustainable and responsible. It is vital that we work with our communities to ensure they see a socioeconomic benefit while also helping society manage the green transition.

To help meet growing demand for transparency and traceability of the products we sell, we created START. Like a “nutrition label” for aluminium, START tracks key information about where and how our aluminium products were produced.

What are your sustainability ambitions?

― Trust and credibility are key if Europe is to mine its own resources at scale, shorten supply chains and reduce its current reliance

TRANSPARENCY

The approach to ensure these expectations are met is technology and transparency. Mining technology has evolved significantly in recent decades, and Rio Tinto is regarded as a leader in innovation. ESG is today central to our operations and the way we mitigate concerns. This involves being much more transparent and accountable.

on imports. Rio Tinto has bold decarbonisation ambitions. We expect to invest $7.5 billion on switching to renewable power, electrifying processing and moving from mobile to electric fleets by the end of the decade, all whilst continuing to strengthen our social licence to operate.

In 2021, we set climate targets to reduce our scope 1 & 2 emissions by 15 per cent (from 2018 levels) by 2025 and 50 per cent by 2030, reaching net zero by 2050. These include direct and indirect emissions owned or controlled by the company. However, we know we won’t reach our goals simply by investing and allocating capital. We must also attract the right talent, deploy new technology at scale, secure the right approval from regulators and partner respectfully with local communities.

Why is mining critical raw materials a long-term commitment?

― Given that it can take decades for a mining project to become operational, and considering the long lifecycle of mines, it is in the best interests of any mining company to nurture mutually beneficial partnerships with local communities. Public acceptance is at the core of modern mining.

Mining activity also brings long-term economic development and an increase in living standards, such as job availability, more capital for the local community, and the development of related industries like cathode and battery factories in the host country. Community-led monitoring programmes and regulatory requirements, such as the EU battery passport regulation, ensure that this economic and social development from mining projects also translates into a sustainable commitment to the region and communities. Rio Tinto understands that trust has to be earned. And that’s not only for the future of mining - Europe’s green and digital transitions depend on it. ∙

START

As the first of its kind in the industry, START uses secure blockchain technology to provide information on ten criteria: carbon footprint, water use, recycled content, energy sources, community investment, safety performance, diversity in leadership, business integrity, regulatory compliance and transparency. This information is readily available via the START platform, where customers can view sustainability insights and manage orders..

Smart Traffic Solutions for Client Full Satisfaction

ElcomBgd pays equal attention to each client and approaches them systematicity, because the right to mobility belongs to everyone, and problem of traffic is equally large even in small towns, having a significant impact on the efficiency of the local economy and quality of life

From the Belgrade Waterfront to Kotor “on the water”, ElcomBgd implements effective solutions of adaptive traffic management that prove successful at easing and quickly overcoming critical traffic conditions during temporary shortages of traffic network capacity.

huge potential of advanced Information and Communication Technologies, operationalised through smart systems of adaptive traffic management, represents the only realistic option for dealing more effectively with this issue.

At the core of advanced traffic management are sophisticated software tools that process huge amounts of traffic demand data thoroughly detected in real time. Those data are processed within the framework of advanced mathematical models, with the application of various artificial intelligence techniques, providing a high-quality prediction of traffic demands in subsequent periods lasting sev-

An important component of strong clientoriented approach is comprehensive, and permanent remote access to each traffic light implemented, and providing client with practical tools for a detailed analysis of traffic process and easy checking of system efficiency

A high level of congestion on urban networks represents a major challenge for the traffic management profession. A traditional engineering approach to traffic management – based on inflexible mathematical models, algorithms, and historical traffic flow statistics – has proven itself to be inefficient during periods of extreme traffic demand. The

eral minutes. The system thereby reacts in a timely fashion, with high reliability, and efficiently resolves or mitigates critical capacity situations that are already occurring or appears soon.

ElcomBgd actively follows and implements contemporary traffic control strategies, within creative collaboration with partners - re-

nowned global providers of system software solutions (PTV, SWARCO, Schlothauer & Wauer, etc.), and with participation of researchers from the global academic community. Within the scope of its own research and development framework, the company develops creative solutions that improve commercially available solutions and adapts them better to the specific traffic problems of clients in Serbia and across the Adria Region.

An important part of client-oriented approach is comprehensive, direct, and permanent remote access to each traffic light on the ground, provided to the technical team of ElcomBgd and, in a selective form, to the client’s responsible competent individuals. This is intended to ensure all hardware components of the system are working properly and to control the way the traffic system functions every second, in real time, archived for offline analysis, as well as taking essential corrective actions for improvement of system operation in emergency situations.

Special importance is given to the high-quality evaluating of relevant management results through developing analytical tools for analysis of the traffic process performance (Measures of Effectiveness) in real time, or historically. They are equally important to solution creators during its fine tuning, and to clients for evaluating the efficiency of the investment made and, subsequently, for the long-term monitoring of the quality of service provided to final users. ∙

NINA LAKIČEVIĆ

Director of the Tourist Organisation of Tivat

”We have a good foundation when it comes to preparing for the season ahead. Preparations are underway for a rich calendar of events, through which we will work towards ensuring our visitors have an enjoyable stay throughout the entire year,” announces ToT’s Nina Lakičević

Some would suggest that it must be easy for you as the head of the Tourist Organisation of Tivat, given that it’s a thriving tourism spot where something is always happening. Would they be right?

― It isn’t easy at the helm of the tourist organisation of a city that has already become a tourism brand and that entices tourists from different parts of the world with its beauty. The function of director demands the harmonising of strategies and management, coordinating with local partners and making key decisions when it comes to promotions and advancing the development of the city. A positive aspect is that I can use tourism contents to direct activities towards the direction in which I think the city should develop, while a negative aspect is that tastes differ and so criticism is also inevitable.

I think that the offer is extremely important for small towns, because that’s one of the segments with which you “convince” guests to extend their stay and make return visits. Tourism is one of the fastest growing sectors of the world economy and is certainly among

Tivat Lives Year-Round

Tivat is the sunniest spot in the Bay of Kotor, it thus comes as no surprise that it won the 2023 title of Best Small Town in Europe for Quiet Living, based on the opinions of 1,200 guest respondents from all over the world

the most challenging when it comes to changes and the continuous adjusting of work requirements throughout the year.

You launched preparations for this summer season with great ambitions. What novelties do you have ready for guests?

― We generated record high revenues from the collection of accommodation and tourist taxes last year. We also recorded a 16% increase in arrivals and a 7% increase in overnight stays compared to 2022. In order to gain broader insights when it comes to evaluating our work, and for numbers not to be the only measure of our success, a survey was conducted by a professional agency. Surveyed visitors gave high ratings to the beauty of nature and the

a rich calendar of events, through which we will – in cooperation with other cultural institutions in the city, NGOs, and the marinas of Luštica Bay and Porto Montenegro – work towards ensuring our visitors have an enjoyable stay throughout the entire year.

You aim to make Tivat a year-round tourist destination. How can you extend the season?

― When it comes to the offer beyond the peak summer months, we are favoured by the fact that Tivat is the sunniest spot in the Bay of Kotor and that it has the very important assets of sunshine and the sea. The promotion of active tourism, cultural and sporting events, gastronomic tours and adventure excursions,

The good season that we’ve left behind represents motivation, but also an obligation, because guests’ expectations are at an enviable level, and that in turn elevates our own ambitions

local area, as well as the picturesque qualities and orderliness of the town, the level of environmental preservation, personal safety, hospitality, the cleanliness of the beaches, the ratio of price to quality, cultural contents etc. This provides a good foundation for us when it comes to preparing for the season ahead.

The good season that we’ve left behind represents motivation, but also an obligation, because guests’ expectations are at an enviable level, and that in turn elevates our own ambitions. Preparation are underway for

as well as investments in infrastructure that encompass accommodation capacities, roads, trails, beaches and public facilities, represent just part of all the things we’ve been working on intensively for some time already.

The extending of the season is achieved as a result of various strategies and requires certain resources. We are delighted that, through various forms of tourism – nautical, cultural, sports, rural – we’ve achieved a guest structure that includes a wide array of different nationalities, social statuses and age groups. ∙

Land of Stunning Canyons

The region of Piva lies in the northwest of Montenegro, close to the border with Bosnia and Herzegovina. Piva was declared Montenegro’s first Regional Nature Park on Earth Day (22nd April) 2015.

This park also has international importance, because it links the national parks of Sutjeska (Bosnia and Herzegovina) and Durmitor (Montenegro).

The landscape of Piva is characterised by dense copses of trees and limestone plateaus created by the canyons carved out by the rivers Tara, Piva, Komarnica and Sušica, which together form a system of rivers and deep canyons that’s unique in the world.

Your Major Competitive Advantage

The importance of identifying environmental, social and governance risks (ESG) is becoming one of the priorities for companies, which are increasingly aware that this area can no longer be ignored. That’s why you need D&B ESG Intelligence!

It is today unacceptable to maintain business relations with a company that has unethical practices, violates human rights or doesn’t respect environmental protection standards. Most companies have an extensive network of suppliers and business partners, making it difficult to detect potentially controversial practices of those suppliers and partners, especially if they come from other countries.

The implementation of ESG principles will also be a legal obligation in the near future, so you’ll have a huge

on companies and analytical insights. With the help of artificial intelligence, companies are able to assess and monitor the ESG performance and activities of potential and existing business partners.

GET AHEAD OF THE COMPETITION AND THE LAW

Demonstrating the ever-increasing validity of the ethical operations of companies, among other things, is the EU directive on the identifying of environmental, social and manage-

Thanks to the D&B ESG Intelligence solution, you will be able to confirm the conduct of your partners in the fields of environmental protection, human capital, supply chain management and compliance with regulations, thereby avoiding harmful partnerships

competitive advantage tomorrow if you include them today.

D&B ESG Intelligence helps companies identify such risks and make optimal business decisions, offering insight into high-quality global data

ment risks (ESG), which all member states will have to implement. Topics such as environmental protection, attitudes towards employees and business ethics are also increasingly important for consumers. According to

the findings of Dun & Bradstreet, as many as 90% of consumers believe that companies and brands must treat the planet and its inhabitants with great care, while 33% admit that they are guided by environmental and social responsibility in their purchasing decisions. ESG principles have already become a reality, and following them enables companies to secure a competitive advantage while at the same time better preparing themselves for upcoming regulations.

ARTIFICIAL INTELLIGENCE IDENTIFIES ESG RISKS AND OPPORTUNITIES

The successful companies of the future will be those that bring to the fore human capital and the key trends we are witnessing: digitalisation, sustainability and business ethics. Global companies wanting to gain a competitive advantage and comply with new regulations are already tracking environmental, social and governance factors. Using D&B ESG Intelligence, companies can identify ESG risks in their supply chain, monitor them and compile effective reports to

meet regulatory requirements for ESG compliance. D&B ESG Intelligence provides comprehensive sustainability performance data coverage for more than 35 million public and private companies worldwide. Users of the solution gain insight into the performance of their business partners within 13 ESG areas and as many as 31 key ESG sub-areas, as well as gaining access to otherwise difficult-to-access data of private companies.

33% of consumers admit that they are guided by environmental and social responsibility in their purchasing decisions

PROTECT YOUR BUSINESS’S REPUTATION

Every successful company knows that a reputation is built over years, while it can be lost in an instant. Companies can no

longer afford to work with partners who are burdened by controversial practices, such as worker exploitation, environmental destruction or association with exposed companies and their representatives.

Thanks to the D&B ESG Intelli-

gence solution, you will be able to confirm the conduct of your partners in the fields of environmental protection, human capital, supply chain management and compliance with regulations, thereby avoiding harmful partnerships. ∙

The Future Belongs to Green Projects

Zeta Energy, a joint venture between Montenegro’s EPCG and Norway’s NTE, produces electricity and ranks among the most successful enterprises in Montenegro

DRAGAN VLAHOVIĆ

CEO of Zeta Energy Danilovgrad JEFIMIJA PAVIĆEVIĆ

Financial Director of Zeta Energy Danilovgrad

“We are currently considering popular green projects and searching for projects related to the reconstruction of existing hydroelectric power plants or the construction of news,” announce our interviewees.

Based in the central Montenegrin town of Danilovgrad, Zeta Energy specialises in generating electricity and owns two small hydroelectric power plants:

Zeta Energy has been declared one of the most successful companies in Montenegrin energy sector by CompanyWall Business

Slap Zete and Glava Zete. Their reconstruction, which involved an investment exceeding eight million euros, was part of the joint EPCG and NTE investment plan to preserve and increase the capacities of existing small HPPs through reconstruction projects. In technical terms, this in-

vestment resulted in a 30% increase in production compared to the performance prior to reconstruction, during which there were no layoffs despite financial indicators suggesting otherwise.

CEO Dragan Vlahović was also the lead project manager and responsible person throughout the reconstruction process, which, like modernisation, complied with all environmental standards. Complete electro-mechanical equipment replacement was undertaken, along with the sanitation and adaptation of the entire construction infrastructure, resulting in Montenegro gaining two electricity production systems that can be compared to those of the EU’s leading energy companies.

All these elements were recognised as prerequisites for CompanyWall Business to declare Zeta Energy as one of the most successful companies in the Montenegrin energy sector.

Despite all the global and local economic challenges, 2023 was one of our best years in revenue and, above all, production levels achieved. This was thanks primarily to very favourable hydrometeorological conditions, but also due to the reconstruction process that met the primary goals of complete automation, reliability and high efficiency. We hope to expand our business beyond Montenegro’s borders by developing new pro-

jects within the energy sector, together with NTE, one of the largest producers of electricity in Norway.

We will continue to compete with dedication and hard work, as we have done so far. Competition is good, because it doesn’t allow one to become complacent and provides constant motivation to seek new opportunities and improve existing ones, which is ultimately the essence of life, not just business.

PERSONNEL AT THE HEART OF SUCCESSFUL BUSINESS OPERATIONS

In line with our company’s development strategy and collaboration with leading experts from NTE, we conduct research and analyse the development of new projects, primarily from renewable energy sources, respecting the EU’s Green Agenda. We believe that we can fulfil all our strategic plans if we tie the basic goal to that – working with a team of high-quality people, people with a positive attitude, character and knowledge. We hope that, in the near future, the business world will further emphasise such individuals, who should be at the heart of every healthy and successful business. That’s why it’s crucial to invest in educating and rewarding employees who contribute to company development. ∙

MIHAILO VUKIĆ

Owner, Allegra Cruises

FYour next Cruise is just a Click away!

Travel agency Allegra Cruises is the exclusive representative of the Royal Caribbean International for Serbia, Montenegro, Croatia, Slovenia, Bosnia and Herzegovina, North Macedonia and Albania, thanks to which lovers of cruises from the Adria region are able to book their perfect holiday onboard one of the Royal Caribbean cruise ships

or booking Royal Caribbean cruises, a unique website adapted to the countries of the Region has been created. Thus, the long-standing successful cooperation between the leading travel agency specialized in the cruises and airline tickets and the American cruiseline has been raised to a higher level.

Allegra Cruises owner Mihailo Vukić say that it is an honour for his agency to be part of such a large and renowned company as

Royal Caribbean International, which has been a world leader in providing unforgettable experiences at sea for more than 50 years. Each class of ship owned by the Royal Caribbean represents a unique architectural wonder with the latest technology and luxurious offer that is intended for travelers seeking adventure and a good time. This brand is a pioneer in offering unique voyages to 240 different world destinations in 61 countries on six continents, including its own private island in the Bahamas.

Thanks to the new website for booking Royal Caribbean cruises that’s tailored to our region, local cruise lovers can now book holidays

onboard Royal Caribbean ships by visiting the web address www.royalcaribbeanadria.com, because perfect vacation is just a click away.

“The new website opens up new perspective for both experienced passengers and those who have not cruised before, because they are now able to search our website in their own language. This is just another step in deepening our cooperation with Royal Caribbean and providing the highest quality service to our clients.” - points out Vukić proudly.

Allegra also advises you to visit the new website and search for all the unique offers of the world’s best cruise line at one place, in your local language. ∙

PROKOPIJE PERIĆ

CEO, PLUS D.O.O. PODGORICA

“W

e have always endeavoured to diversify our business into as many categories as possible, in order for the stability of the company to be beyond question, regardless of what happens on the market,” says CEO Prokopije Perić, noting that his company makes increasingly ambitious plans from year to year.

According to EBRD forecasts, Montenegro is expected to experience GDP growth of 3.7% in 2024. Are your business plans equally optimistic and ambitious?

― As a company that’s known as one of the leaders in the importing of consumer goods that are essential for every household, we make increasingly ambitious and ever bigger plans year on year. Just as our Montenegro –as a country that relies on tourism – must diversify its offer, increase the quality of services and offer more services beyond the coastal region and the traditional four-month season if it wants to be able to count on growth, so every company, including ours, must expand its portfolio and work on the quality and quantity of its services if it wants to achieve growth.

Our brands have a combined market participation exceeding 45% and PLUS is a company that contributed more than 40 million euros to Montenegro’s 2022 budget through excise du-

Confident in its Leading Position

PLUS is a company that imports consumer goods and is among Montenegro’s market leaders, thanks primarily to the cigarettes that represent a key category of the PLUS portfolio

ties on tobacco products, while that amount exceeded 43 million euros in 2023. Our stability is additionally strengthened by products from the categories of cosmetics, hair care and body care, as well as numerous brands from the hygiene and food and drinks categories, and in 2024 we are awaited by an extremely large project with our partner JTI, which we will also announce to the market soon.

We invest a lot in digitalisation and various software solutions that enable faster and more efficient operations, but we invest even more in our people

Do you think economic integration would bring prosperity to the entire Western Balkan region?

― I believe sincerely that regional economic integration is hugely significant when it comes to building prosperous economies that will encourage mutual trade, competitiveness and investment. Integration would help the region in numerous ways, including by bolstering economic growth, attracting investment and improving education and employment opportunities. That topic, as well as the

issue of expanding beyond Montenegro’s borders, is ever-present in our company, though we are very cautious when considering entering other markets.

The results that we’ve achieved on the Montenegrin market with our Una Slims brand are truly impressive, which is why our regional expansion should be expected. We currently have agreements with partners in Serbia and Albania to launch sales on those markets, and that’s what we’re focused on at present.

Do you also see digitalisation and e-commerce as great opportunities to advance your business, improve your market coverage, increase the availability of products etc.?

― As one of the leaders in our category, we endeavour to always be a step ahead when it comes to innovation. On the flip side, although we think long-term, we are focused primarily on the present moment in which we live and operate in such a way that we can get as much out of the market as possible. We invest a lot in digitalisation and various software solutions that enable faster and more efficient operations, but we invest even more in our people, because employees make the biggest difference for us compared to our competitors. It is actually thanks to them, on the basis of their attitude towards their job and the company, that we develop plans to advance the business, improve our market coverage and increase the availability of products. ∙

Annual sunshine hours (average over a long period, in most cases 30 years)

The region has a big untapped potential for solar energy. Annual hours of sunshine in some countries are 20-30% higher than in Austria, for example

Corporate Corner

Albania Energises Future with First Lithium Ion Battery Plant Venture

Vega Solar and Sainik Industries have joined forces to build Albania’s first lithium-ion battery factory, which was announced at an Indian-Albanian business forum. The 100 MW capacity facility aims to enhance renewable energy stability, which is crucial for Albania’s energy independence amid hydropower challenges and drought-related energy imports. Bruno Papaj, CEO of Tirana-based Vega Solar, underscored the importance of this joint venture, which is expected to reach completion within two years.

Croatia’s €30 Million Boost for Hydrogen Fuel Infrastructure

Croatia is advancing greener transport with €30 million in grants for hydrogen fuel stations, says Minister Damir Habijan. This year, €15M is allocated to launch the project to accelerate hydrogen-powered vehicle adoption. The plan includes six stations for cars and trucks, with locations decided through a tender process. Each station could receive up to €2M for cars and €3.5M for trucks, emphasising renewable energy-powered chargers.

Adriatic Metals BiH achieves milestone with first ore concentrate in Vareš Project

Adriatic Metals BiH has achieved a major milestone in Bosnia and Herzegovina’s mining sector with the first ore concentrate production in the Vareš Project. The processing plant aims to reach a capacity of 65,000 tons per month by Q4 2024. CEO Paul Cronin expressed excitement and pride in the team’s accomplishment and safety standards. The company plans to optimise the processing facility and expand underground operations, targeting total production capacity by Q4 2024. This emphasises the potential for sustainable mining practices.

Kempinski Hotels Triumph in Prestigious Travel and MICE Industry Awards

In a resounding testament to their excellence within the hospitality industry, Kempinski Hotels have secured prestigious accolades, marking a significant achievement for their properties in Croatia and Slovenia. The Kempinski Hotel Adriatic, situated in the beautiful region of Istria, Croatia, has been awarded two notable distinctions for the year 2023, further solidifying its reputation as a premier destination for holidaymakers and business travellers alike.

EBRD Appoints Fatih Türkmenoğlu as new Head for North Macedonia

Turkish national Fatih Türkmenoğlu joined the EBRD in 2012 as a Principal Banker in Istanbul. Promoted to Associate Director in 2018, he later became Head of the Turkmenistan office, focusing on private sector projects. With expertise in infrastructure, commercial banking, project implementation, cross-border finance, legal frameworks and donor relations, he brings a wealth of experience from both public sector and commercial banking roles.

Atlantic Grupa Acquires Strauss Adriatic

Atlantic Grupa completed its acquisition of Strauss Adriatic on 1st March, adding Serbian coffee brands Doncafe and C kafa to its portfolio, alongside Grand kafa and Barcaffè. The deal includes a Šimanovci manufacturing facility and 220 employees. Conditional approval from the Serbian Commission for the Protection of Competition marks a milestone in Atlantic Grupa’s growth.

Fortenova Group Awarded Regional ESG Leader Prize

Fortenova Group d.d. has received the prestigious Golden Award as “Regional ESG Leader 2023” from the International Economic Forum “Perspectives” and Society “Promo Global.” Recognised for overall ESG achievements, this prize, presented during the 9th Regional Entrepreneurs Summit in Zagreb, underscores the group’s commitment to ESG principles in Central and Southeast Europe.

Primary energy consumption per capita kilowatt-hours per person

Total energy consumption per capita in the Balkans is lower than in the developed EU countries

Data source: U.S. Energy Information Administration (2023); Energy Institute - Statistical Review of WorldEnergy (2023); Population based on various sources (2023)

North Macedonia

Albania

Kosovo*

Montenegro

Bosnia and Herzegovina

Croatia

Serbia

Slovenia

Austria

Primary energy consumption per GDP kilowatt-hours per dollar

But again, per unit of GDP generated, energy consumption in the Balkans is higher than in the EU. North Macedonia stands as an exception here.

Data

source: U.S. Energy Information Administration (2023); Energy Institute - Statistical Review of World Energy (2023); Maddison Project Database 2020 (Bolt and van Zanden, 2020)

North Macedonia

Austria

Montenegro

Croatia

Albania

Slovenia

Bosnia and Herzegovina

Serbia

Leaders of Sustainable Finance Practices

Members and partners of the EIC in Kosovo spearhead capital mobilisation for the expansion of renewables, the retrofitting of energy-efficient infrastructure and the growth of eco-friendly enterprises

EMRUSH UJKANI

Executive Director of the European Investors Council (EIC)

As a collective voice for the largest European investors in Kosovo’s private sector, the European Investors Council (EIC) is proud of the tangible contributions its members make to creating a greener Kosovo, says EIC Executive Director Emrush Ujkani.

Among the most valuable contributions that the EIC, together with its members, is providing to Kosovo are:

(i) the leveraging of a rich tapestry of knowledge and practices garnered from a diverse member base of European investors; (ii) the proposing of recommendations aimed at aligning Kosovo’s environmental policies with the advanced environmental policies of the EU through close consultation with policymaking partners like the EU Office in Kosovo and other diplomatic missions; and (iii) the promotion of critical investments and finan-

cial instruments that support Kosovo’s green transition, through the EIC’s other international partners, like the European Bank for Reconstruction and Development (EBRD) or the European Investment Bank (EIB). “Our work with these institutions helps to channel funds into sustainable projects and green initiatives that are essential to Kosovo’s alignment with the ambitious environmental standards set by the EU,” says our interlocutor.

“The EIC is instrumental in translating EU environmental policies to Kosovo’s specific needs through strategic consultations with the EU Office in Kosovo and various other EU diplomatic missions. Integral to this process is our annual EIC White Book, which serves as a compilation of policy recommendations that are carefully crafted by EIC members. This document is not merely a publication, but

degradation. Our members have been pioneers in integrating sustainability elements into their business models in the banking system in Kosovo. Guided by the UN’s Principles for Responsible Banking and the Net-Zero Banking Alliance, they have committed to promoting sustainable finance solutions that support clients in transitioning to carbon-neutral business models. Their efforts span various sectors, including green energy, waste management, healthcare and education, demonstrating their holistic approach to sustainability. They engage with clients beyond financing, by providing advice on compliance with labour laws and community investment that reflects a broader perspective on sustainable finance. This alignment with international standards, such as the EU Taxonomy and the Non-financial Reporting Directive, enhanc-

Our support not only promotes Kosovo’s green agenda, but also highlights the country’s potential to emerge as a regional leader of sustainable development

represents a blueprint for action, providing structured guidance on how to adapt and implement European standards within the context of Kosovo.

“We are particularly proud of our members’ achievements in sustainable finance practices, which testify to their commitment to address the urgent challenges of climate change, social inequality and environmental

es transparency and facilitates assessment of the positive impacts of sustainable finance initiatives. Through comprehensive environmental and social risk management in lending, our members exemplify strong commitments to sustainability, contributing significantly to renewable energy projects and the reduction of greenhouse gas emissions.” ∙

Only Albania, Croatia and Montenegro generate most of their electricity from renewables. Fossil fuels dominate electricity generation everywhere else in the region

Albania

Austria

Croatia

Montenegro

Slovenia

Serbia North

Civic Engagement and Institutional Responsibility

Maintaining an open dialogue between environmental stakeholders and the government is crucial for enacting laws that support renewable energy, aid circular economy businesses and fund environmental awareness education

By LUAN HASANAJ Environmentalist

As one of the biggest environmental issues confronting Kosovo, environmental pollution not only demands immediate attention, but also cooperation among

all those involved in the development and implementation of suitable solutions.

Specifically, the issue of air, water and land pollution demands urgent action, the creating of policies that are as favourable as possible for investments in renewable energy and the development of the circular econ-

omy sector. In this aspect, it is the responsibility of institutions to develop and provide suitable conditions that encourage innovation and investment in green technologies.

There is nonetheless a clear commitment to environmental protection among the Kosovo population and civil society. One encouraging exam-

OPINION

ple is the 12-year “Let’s Cleanup Kosovo” campaign, which is organised by NGO Let’s Do It Kosovo and has mobilised hundreds of thousands of volunteers to participate in cleaning initiatives. Numerous other countries of the region have also seen this kind of activity, with thousands of volunteers engaging in environmental cleanup efforts. Unfortunately, institutions continue to lag behind in capitalising on the public participation generated by these efforts to address pollution issues in a more methodical and longterm manner.

Beyond Let’s Do It Kosovo, there are many other environmental organisations and small local groups that are working tirelessly to protect the environment, promote sustainable practices and build a culture of sustainabil-

Kosovo shows a strong commitment to environmental protection, with hundreds of thousands of citizens volunteering for cleanup initiatives

ity. Their important work is not only worthy of acknowledgment, but also deserves long-term funding from the public and private sectors.

At the same time, it is essential to emphasise the need for continuous and systematic educational campaigns, especially when it comes to public and environmental education in schools. Early environmental education ensures that the next generation is better equipped to handle and

POLLUTION

Urgent action is required to combat pollution. Establishing favourable policies is crucial to encouraging investments in renewable energy and fostering the growth of the circular economy.

confront future environmental concerns, in addition to fostering sustainable attitudes and habits.

Regional cooperation is another key component in tackling shared environmental challenges, with an emphasis on the need for the region’s civil society organisations and media outlets to cooperate more closely on joint environmental campaigns. This kind of interstate collaboration would make it easier to fight pollution together, share resources and knowledge, and respond more effectively to problems requiring joint solutions.

the energy and passion generated by civil society campaigns.

In order to develop policies that are harmonised with the actual needs of the environment and society, it is essential for all environmental actors to have open and positive conversations with governments. Every action is vital in establishing the direction of sustainability in the area – from adopting laws that promote investment in renewables to assisting companies in using the circular economy to fund environmental education.

In summary, the dedication to a

CAMPAIGN

The Let’s Cleanup Kosovo campaign has been ongoing for 12 years.

Regional initiatives like World Cleanup Day have shown that civic engagement can generate new and surprising energy for positive change. These kinds of initiatives are more than just cleanups: they are manifestations of a desire to improve living conditions and the state of the natural environment. However, there is still a gap between this civic desire and institutional action. It is time for institutions to bridge this gap by relying on

healthier and cleaner environment isn’t only an idealistic goal, but rather a duty to the next generation and an investment in the future stability of the public health system and the economy. Our children’s future is shaped by every step we take towards sustainability today. Together, as individuals, groups, governments, and the media, let’s create a Western Balkan region that not only endures, but flourishes in the 21st century. ∙

EDUCATION

Emphasising continuous and systematic environmental education, especially in schools, is vital to equipping the next generation to address future challenges sustainably.

COOPERATION

Regional cooperation is crucial to tackling shared environmental challenges through closer collaboration and joint efforts between civil society organisations and media outlets.

Culture Compass

Days of Francophonie 2024: Choose Your Future with Heart!

BOSNIA AND HERZEGOVINA

From 15th to 27th March, the French Institute and the French Embassy in Bosnia and Herzegovina, in partnership with embassies from Belgium, Bulgaria, Spain, Romania, Serbia and Switzerland, organised the celebrating of Francophonie Days in the country under the slogan “Choose Your Future with Heart!” Events got underway with a gastronomic evening featuring dishes from Francophone countries at the Bosnian Cultural Centre, followed by a diverse programme. From 16th to 28th March, attendees enjoyed public screenings of Francophile films for adults and children, exhibitions of bilingual songs and illustrations, and public speaking workshops in French....

Zagreb Light Festival 2024

CROATIA

One of Croatia’s most beloved cultural events, the Zagreb Light Festival, took place in Zagreb once again from 20th to 24th March. This festival combines art, design, spectacle, entertainment and architecture, bringing to life popular streets and neighbourhoods in Zagreb.

Over the course of five days, visitors explored a total of 29 attractions at 24 locations, heralding the arrival of warmer and longer days. In observance of Earth Hour, one of the world’s largest environmental movements, all light installations at this year’s Zagreb Light Festival were switched off for 15 minutes on Saturday 23rd March at 8:30pm. Earth Hour provides a moment of solidarity and an opportunity to care for each other and our shared home.

BDF Celebrates ‘Impeccable Differences’

SERBIA

Under the slogan ‘Impeccable Differences’, the 21st Belgrade Dance Festival took place in Belgrade and Novi Sad from 7th March to

10th April. Dance companies from 14 countries participated in this year’s BDF, making Serbia the international hub of contemporary artistic dance for over a month. Renowned dancers from various world cities, including Grenoble, Gothenburg, Florence, Vancouver, Prague, Paris, New York, Cannes, Adelaide, Wiesbaden, Tel Aviv, Belfast, Sydney, Shanghai and Valetta, as well as Serbia, showcased their talents. As this year’s slogan, ‘Impeccable Differences’ symbolises unity amid diversity, which was reflected in 18 events attracting over 20,000 attendees.

OSTEN Biennial Skopje 2024 Held NORTH MACEDONIA

Skopje hosted its biennial event showcasing contemporary art, which this year featured around 1,000 works from over 500 artists representing more than 66 countries, from 1st to 31st March. Thanks to its unique concept, this event is extremely attractive to artists worldwide. The organisers pay significant attention to new trends and emerging young artists, while also awarding the Grand Prize for Lifetime Achievement and the World Cultural Heritage Award. As in previous years, the OSTEN Biennial prioritised works that break old and worn-out artistic models, featuring pieces with a specific artistic signature or hinting at attempts to break established academic

rules. That’s why Skopje once again brought together artists who enjoy pushing conventional boundaries in terms of techniques, tools and media, but also in the realm of creative expression and freedom.

MENT Ljubljana: A Creative Showcase Festival

SLOVENIA

Ljubljana hosted MENT, one of the most creative and popular showcase festivals in this part of Europe, from 21st to 24th February. The three-day event brought together dozens of musicians from all over Europe, who performed at various venues across Ljubljana, including the main festival hub of Kino Šiška, the heart of the local rock scene at Orto Bar, the intimate space of Kinoteka, clubs in Metelkova with unique aesthetics and atmosphere, and the magical Ljubljana Castle. Alongside the music programme, MENT also featured a series of panel discussions with representatives from various music business spheres addressing various topics. Among the speakers and panellists were promoters, festival organisers, producers, booking agents, managers, publishers and other music industry experts who came together to exchange experiences and thus deepen their mutual collaboration.

20th International Opera Singers Festival

ALBANIA

Albania’s International Festival of Operatic Singers took place on the stage of the Na-

tional Theatre of Opera and Ballet in Tirana on 27th, 28th and 29th March. This festival, which is dedicated to Albanian opera singer Marie Kraja, has been the pinnacle of Albanian cultural life for 22 years, while its staging also promotes the image of Albania and Albanian culture and art worldwide. The festival features young singers from around the world, aged 20 to 34, who are emerging stars of the Albanian and global opera scene and who perform selected arias together with the Symphony Orchestra of the National Theatre of Opera and Ballet. During the last two evenings of this year’s festival, which were broadcast live on Albanian National TV’s Top Channel, participants showcased their vocal and stage talents to art-loving audiences.

10th Forte Piano Festival MONTENEGRO

The 10th Forte Piano Festival, dedicated to contemporary piano music, took place in the Grand Hall of Podgorica’s Budo Tomović Cul-

ture and Information Centre on 27th and 28th February. The first day of this year’s edition of the festival saw Russian pianist and composer Alexey Kurbatov perform a concert featuring works by Russian composers Nikolai Medtner, Rodion Shchedrin and Igor Stravinsky, Australian composer Carl Vine, as well as his own compositions and transcriptions. The following day of the festival provided the Montenegrin audience with an opportunity to witness the premiere performance of pianist Katarina Krpan, a piano professor and head of the Contemporary Music Department at the Music Academy in Zagreb. During her full-length concert, Katarina performed works by contemporary Croatian composers created in the last 50 years.

Exhibition of Branislav Ristić Sculptures KOSOVO*

The Art Gallery of Pristina and the Gračanica Cultural Centre co-organised a 19th February exhibition of sculptures entitled “Embrace”, authored by academic sculptor Branislav Ristić from Štrpce. Curator of the Art Gallery of Pristina, Milica Kostić, described the sculptures as seemingly minimalist but with simplified forms that reject anything superfluous and pretentious through an abstract composition of pared-down elements. “In seeking his own poetics and developing his creative personality, Ristić decided to explore the quiet white peaks of his spirit and homeland through layers and shades of stone compositions,” wrote Nebojša Jevtić and Živojin Rakočević in the foreword to the exhibition catalogue.

Staunch Supporter of the Green Deal

Croatia is dedicated to the European Green Deal and is striving to achieve climate neutrality by 2050, having made substantial decarbonisation efforts in the energy sector and economy over recent years

DAMIR HABIJAN

Croatian Minister of Economy and Sustainable Development

n Croatia’s transition to climate neutrality, certain sectors will have to make more significant changes than others, says Croatian Economy and Sustainable Development Minister Damir Habijan.

IThis is the case with energy-intensive industries that are essential to the Croatian economy and that other sectors rely on. This makes their modernisation and decarbonisation very important. “This is an opportunity to stimu-

late the growth of industrial production, the investment cycle, the development of new activities through improvements to existing infrastructure and technological solutions, innovation, transfers of advanced technologies, significant structural changes in all sectors,” explains our interlocutor.

Sustainable development and climate change are key global and European concerns, with climate resilience posing a major contemporary challenge. Nearly all industrial activities face threats from climate change, necessitating the development and adoption of new, effective technologies to

mitigate emissions and foster a cleaner environment.

“The Ministry of Economy and Sustainable Development is currently in the final stages of drafting the National Industrial Development and Entrepreneurship Plan for the period until 2027. The “Green Transition and circular economy” has been identified as one of the seven specific objectives of the National Plan. This objective is defined as a response to the development challenges of net-zero emissions to industry and entrepreneurship, increases in the use of renewable energy sources for energy security and the realisation of environmental benefits, the modernisation and decarbonisation of industry, the sustainability of industry and the resilience of enterprises to environmental and social trends and the circular economy,” says minister Habijan.

Croatia supports increasing the CO2 emissions reduction target and is committed to implementing the European Green Deal and to the goal of making Europe the world’s first climate-neutral continent by 2050. Accordingly, over the last few years, the Republic of Croatia has exerted significant efforts to decarbonise the energy sector and the economy. A green energy transition requires the fulfilling of three objectives at the EU level: 1. reducing CO2 emissions; 2. increasing energy production from renewable sources, increasing the share of energy from renewable sources in total consumption; and 3. increasing energy efficiency. All three objectives contribute strongly to decarbonising the economy. “Equally important is the de-

velopment of new technologies, especially those that can ensure emissions reductions in energy-requiring industries,” notes the Minister.

This also means increasing the capacity of our own energy production in the segment of renewables, which – when combined with reducing CO2 emissions and increasing energy efficiency – will also increase our energy self-sufficiency. In following the European Green Deal, the Republic of Croatia has adopted a series of strategic documents adapted to the principles of sustainability and emphasising concrete measures, the implementation of which will achieve the set goals related to reducing greenhouse gas emissions, increasing energy efficiency and utilising renewables. One of the four development directions of the National Development Strategy for 2030 is the Green and Digital Transition, which emphasises that the Republic of Croatia will be among the European leaders in turning climate and environmental challenges into opportunities, ensuring a just and inclusive transition to climate neutrality. The green and digital transitions will be achieved through a clean energy transition, boosting green and blue investment, decarbonising buildings, developing a circular economy, strengthening self-sufficiency in food production, developing the bioeconomy, and preserving and restoring ecosystems and biodiversity. Our aim is to become one of the leaders of the green economy and the introduction of cleaner, cheaper and healthier forms of transport by promoting a safe and sustainable transport policy. As part of this development direction, four strategic objectives have been highlighted: environmental and energy transition for climate neutrality; self-sufficiency in food and bioeconomy development;

INVESTMENTS

Croatia aims to boost renewable energy production until 2030 in order to reduce CO2 emissions in the energy sector, which requires increased investment in clean technologies.

and sustainable mobility.

In addition to the National Development Strategy for 2030, in an effort to strengthen decarbonisation and green transition, important sectoral strategies and documents have been adopted that are adapted to the principles of sustainability and emphasise concrete measures, the implementation of which will achieve goals related to reducing greenhouse gas emissions, increasing energy efficiency and utilising renewables.

The Energy Development Strategy of the Republic of Croatia until 2030, with a view to 2050 (adopted in February 2020) clearly promotes the development of renewables and envisages more than 2,500 MW of new installed capacity in renewables.

ther elaborated a way to achieve even greater CO2 savings compared to the scenarios proposed by the Energy Development Strategy of the Republic of Croatia until 2030 with a view to 2050. In addition, in March 2022, the Croatian Hydrogen Strategy for 2050 was adopted, which places an emphasis on the production, storage and use of hydrogen, as one of the essential elements for the decarbonisation of industry and the energy sector. “The most important implementing act adopted on the basis of the Regulation on the Governance of the Energy Union and Climate Policies (Regulation (EU) 2018/1999) is the Integrated Energy and Climate Plan (SO-CALLED NECP – National Energy and Climate Plan) for the period from 2021 to 2030,”

Croatia strongly backs the European Green Deal and EU decarbonisation policies, as evidenced by its recent strategic documents

“Although an emphasis is placed on wind and solar power plants, the potential also exists in the bioeconomy (biomass and biogas), and especially in geothermal energy,” adds our interviewee. “The green policy is also visible in the Low Carbon Development Strategy of the Republic of Croatia until 2030, with a view to 2050 (adopted in June 2021), the fundamental goals of which include achieving sustainable development based on a low-carbon economy and resource efficiency.”

An additional effort in pursuit of green policies and decarbonisation was exerted with the publishing of the so-called ZERO SCENARIO for the energy sector, which, after the European Green Deal and “Fit for 55”, fur-

DECARBONISATION

The Republic of Croatia has exerted significant efforts in order to decarbonise the energy sector and the economy.

highlights our interlocutor. “It sets binding national targets for reducing CO2 emissions compared to 1990 levels, increasing the share of renewable energy in total consumption and improving energy efficiency.”

Finally, given that the Republic of Croatia has great potential when it comes to the use of geothermal energy for heating, but also for producing electricity, the Plan for the Development of the Geothermal Potential of the Republic of Croatia until 2030 was adopted in May 2023. This plan ensures compliance with the strategic commitments and policy of the Republic of Croatia regarding renewables, as well as compliance with EU guidelines and goals related to energy policy and the European Green Deal. ∙

DEVELOPMENT

Croatia has high hopes for its Geothermal Development Plan until 2030, which was adopted in May 2023.

GOALS

Croatia’s Energy Strategy until 2030 promotes a new renewable energy capacity exceeding 2,500 MW.

Leap Forward Required

Croatia attracts foreign investments, but it needs a crucial dialogue between private investors and public stakeholders in order to address challenges like a tight labour market and education gaps

TOMISLAV ŠLAT

Secretary General of the Foreign Investors Council of Croatia

In today’s global economic environment, communication and cooperation between the private sector and the public administration within countries is becoming more important by the day. While pub-

lic sectors, to share and promote best practices from other countries so that mistakes are not repeated and the learning and implementation process shortened.

This is also the case with the ESG competencies of foreign companies, as many of them have already implemented these higher business standards in countries where awareness of ESG business conduct was adopted years ago. Our supporting role is to help our members communicate their experiences and the benefits of green transitions to a wider audience, but also to help find ways to implement this new knowledge in the future. Companies and public authorities are initially apprehensive due to the additional costs implied by the implementing of green transition, but we must ultimately teach and explain the medium- and long-term benefits for society. Having information about the ESG experiences of many of their members, FIC organisations, in countries where they are active, consolidate and share

By leveraging ESG expertise from members, FIC organisations consolidate and disseminate these experiences to the public and local authorities across different levels

lic administration should focus on creating a positive investment climate to attract domestic and foreign investors, private investors serve to transfer knowledge, capital and technologies to new markets and countries.

Organisations like the Foreign Investors Council help to facilitate dialogue between the private and pub -

these experiences with the public and local authorities at many levels. Sharing these experiences between countries is also a benefit of cooperation among FIC organisations in various geographical regions.

Having entered the EU 11 years ago, Croatia has reached the end of the official part of its EU accession by now

becoming part of the EU and Schengen area. Croatia did not yet fully utilise opportunities for development associated with the process, as integration into the single market creates incentives to grow exports of goods and services and promote foreign direct investment inflows. The next wave of economic internationalisation is yet to come, as the global economy is undergoing permanent changes. Given its geography, EU membership, very good infrastructure and developed ICT sector, Croatia has to advance further in the coming years by attracting significant FDI from innovative companies that create much higher value added per worker and that invest in R&D.

In order for this to happen, two major barriers must be eliminated as soon as possible. Firstly, the country’s labour market is tight and the quality of education is lagging behind when it comes to serving the needs of a modern economy capable to creating high value added – high productivity and wages per employee. Secondly, the quality of regulations and public administration efficiency call for a leap forward to bring administrative processes in line with the standards of the most developed European countries through the applying of comprehensive digitalisation.

The FICC contributes to these efforts by facilitating continuous dialogue between its members and public stakeholders, but also by regularly publishing its White Book – the trademark of FIC organisations – containing specific recommendations of foreign investors that highlight the current bottlenecks and propose solutions to address them and unlock untapped potential. ∙

Employment in water supply, sewerage, waste management (%

of total employment)

Employment in waste management is 2-4 times higher than in Austria. Thus, the reason for low recycling levels is not the lack of workers

Source: SEE Jobs Gateway

Carelessness is Costly

Ecology has proven to be among the greatest challenges of Croatia’s membership in the EU, and one that this youngest member state has yet to resolve seriously

By ADRIANO MILOVAN Journalist

t was almost 15 years ago that a huge dump appeared suddenly in the vicinity of the village of Biljani Donji near Croatia’s fifth largest city of Zadar.

IThe “Black hill”, as it was dubbed by locals and environmental activists, very quickly became a potential environmental time bomb on the outskirts of this city that’s located almost in the middle of the eastern coast of

the Adriatic Sea.

The entire case became a genuine nightmare for the Croatian authorities, which – following the country’s 2013 EU accession – faced demands from Brussels to resolve this major environmental problem urgently. However, despite the European Commission having ordered that Zagreb clean up the massive piles of waste dumped near the Dalmatian coast and restore the territory, almost nothing has been done to solve the problem.

This ultimately ended up with the

Black Hill case appearing before the EU Court of Justice, twice! Initially in 2018, when the European Commission sued Croatia via that court located in Luxembourg, which culminated in mid 2019 with the passing of a verdict requiring Croatia to clean up the illegal waste dump in Ravni Kotari. Nevertheless, Croatia’s subsequent failure to do anything to implement that court decision led to a judicial second-half, with the European Commission again reporting Zagreb to the EU Court of Justice early last year.

The Black Hill problem emerged in 2010, when a Zagreb-based company was tasked with slag waste disposal and reclamation at Šibenik’s former Electrode and Ferroalloy Factory (TEF). The company extracted the metal tailings from the waste accumulated at the Šibenik plant, but not knowing what to do with the remaining waste resulted in it being “temporarily” deposited on a leased agricultural plot in Biljani Donji. Approximately 140,000 tons of slag waste was thus “taken care of”, which has been covered extensively in the Croatian media.

Next came a bureaucratic predicament when the authorities requested that the company solve the Black Hill problem. Following unsuccessful attempts to identify buyers interested in purchasing this waste, the company went bankrupt and the waste was left to fester in Biljani Donji.

The Black Hill saga is still awaiting an epilogue. Estimates suggest that reclamation of the illegal dump site alone will cost Croatian taxpayers around 20 million euros, while the state will also have to pay larger fines.

Black Hill is just one of the ecolog-

Photo: Jure Miskovic CROPIX

ical problems confronting Croatia today. Ecology has ultimately shown itself to be among the greatest challenges for Croatia’s EU membership, which experts had warned about for years prior to accession.

In one such analysis, conducted by the Zagreb Institute for International Relations back in 2012, it was estimated that Croatia would have to invest as much as 10 billion euros in the implementing of EU environmental directives over the course of the next ten years.

Despite awareness of the need to preserve the environment having risen markedly in Croatia over recent decades, this youngest member of the Union continues to struggle to implement the environmental regulations of the EU.

In fairness, strides forward have been taken over recent years, such that citizens, for example, now have to separate their household waste. This entails houses and apartments having several obligatory waste receptacles, because discarded paper, cardboard, plastics, metals and biowaste must no longer be disposed of as “classic” waste. However, it turns out that problems emerge during the next steps, which include taking care of discarded waste and its further utilisation. In some cases, this all threatens to cause a true ecological disaster.

We were given a reminder of this with the late 2023 collapse of a huge waste mountain at Zagreb’s Jakuševec landfill, located on the southeastern periphery of the city, that left several workers injured. Zagreb’s waste management issue has been “dragging” on for years already, and we still await a solution.

Interestingly, Jakuševec isn’t the only case of this kind of problem in

DISCORD

Although Croatian citizens today separate their household waste, problems emerge during the subsequent recycling stages, which in some cases also threaten to lead to ecological disaster.

Croatia. There is also dispute over the Marišćina landfill in the vicinity of Rijeka and the Kaštijun dump in the Pula area. Residents of Rijeka and Pula don’t want potential ecological bombs in their immediate vicinity, while the inhabitants of surrounding local communities – as is the case in Zagreb – don’t want city waste dumped on their territory.

A problem has also arisen with regard to the management of waste from the Krško Nuclear Power Plant, which is located in Slovenia and co-owned by Croatia. In accordance with an agreement between Ljubljana and Zagreb, Croatia is obliged to handle part of the waste produced by this nuclear plant that’s located just 50 kilometres west of Zagreb.

Croatia offered to store this waste at the former Čekrezovac army barracks on Mount Trgovska Gora, near

of the border between Croatia and Bosnia-Herzegovina.

In contrast to its waste issues, Croatia has had better luck with renewable energy sources, which form one of the essential components of the EU’s “green policy”.

According to the latest Eurostat data available, 2022 saw the EU’s renewable energy sources produce 23 per cent of all energy consumed in the Union that year. Croatia is thus above the EU average in this aspect, given that renewables account for a 29 per cent share of total energy produced in the country.

Even though most of these ‘renewable’ sources relate to water, with other RES forms utilised less, the fact remains that RES use has been on the rise in Croatia in recent years. It nonetheless remains significantly less than it should and could be. It is true that

It was determined in 2012 that Croatia would have to invest as much as €10 billion to implement EU environmental directives over the next ten years

the town of Dvor. However, this plan caused concern among the local population, as well as causing problems in relations with neighbouring Bosnia-Herzegovina, due to the planned nuclear waste disposal site being located close to its territory. Despite the Croatian authorities having claimed that storage of this waste isn’t dangerous and that they will ensure adherence to the highest standards of safety, environmental protection and human health, Sarajevo opposes the construction of this waste storage facility in the immediate vicinity of the river Una, which forms part

CHALLENGE

The biggest problem is the organised management of waste generated by large cities and industry, with everyone washing their hands of the issue.

today’s Croatia has very few unsightly scenes like abandoned old cars and household appliances discarded along riverbanks or in forests, yet a problem remains when it comes to the organised management of waste generated by large cities and industry, with everyone washing their hands of the issue.

Relevant laws exist, of course, but they often lack the bylaws that would enable them to be implemented in practice. It also seems that there is a lack of the genuine willingness required to solve the country’s environmental problems. ∙

THE CASE

The Crno Brdo dump case has appeared before the EU Court of Justice on 2 occasions.

PROGRESS

Solar collectors are increasingly appearing on the roofs of houses and other buildings in Croatia, while solar and wind power plants are also being constructed.

Pearl of the Adriatic

Situated on the Dalmatian coast, Dubrovnik became an important Mediterranean maritime power in the 13th century. The city’s Baroque churches, monasteries and palaces, Renaissance fountains and façades all intertwine with gleaming marble-paved wide squares, steep cobblestoned streets and houses, all of which have remained unchanged for centuries.

Political and Cultural Shift

Three recently adopted laws that regulate the energy field in a comprehensive way represent a significant advance in the green transition of the Federation of Bosnia and Herzegovina and in promoting environmentally sustainable technology

VEDRAN LAKIĆ

Minister of Energy, Mining and Industry of the Federation of Bosnia and Herzegovina

Like other countries in transition, the Federation of Bosnia and Herzegovina is confronted by the challenge of transitioning to a green economy and sustainable energy solutions. However, according to Vedran Lakić, minister of Energy, Mining and Industry of the Federation of Bosnia and Herzegovina, there are certain areas in which this country is making significant progress.

Our interviewee highlights the Federation’s recent adoption of a set of three new laws that provide detailed regulation of the energy field in FBiH: the Law on Energy and Regulation of Energy Activities; the Law on Electricity; and the Law on the Use of Renewable Energy Sources and Efficient Co-

generation. These three laws mark a significant advance in realising the green transition process in the country, both culturally and politically.

Firstly, the passing of the Law on Energy and Regulation of Energy Activities represents a deeply considered step in the management of energy policy in FBiH, establishing long-term targets and introducing protection mechanisms for vulnerable and protected energy consumers. This law likewise advances the regulatory framework for supervising and managing the energy sector, which is vital to ensuring market stability and sustainability within the scope of environmental protection.

Secondly, the adoption of the Law on Electricity eases administrative procedures for the implementation of projects based on the use of renewables, while simultaneously introducing new categories of electricity market participants and establishing a framework for the development of electromobility. This isn’t a purely political decision, but rather also a cultural one that reflects FBiH/BiH’s engagement in the fight against climate change and in the promotion of environmentally sustainable technology.

Thirdly, the Law on the Use of Renewable Energy Sources and Efficient Cogeneration stands out as a crucial instrument in promoting the decentralised generating of energy and en-

A shortage of investment in renewables, a lack of infrastructure and the political will needed to implement required reforms are just some of the challenges we face

PLANNING

It is important to establish mechanisms for the joint planning and implementing of projects that contribute to reducing greenhouse gas emissions at the Western Balkan level.

couraging citizens to become active participants in the energy transition process. This law enables citizens to become electricity prosumers, thereby providing economic benefits while at the same time contributing to environmental protection and local community development.

“Considering that these laws are harmonised with the EU acquis and

COOPERATION

Cooperation with Western Balkan partners is the key to achieving the goals of the EU Green Agenda, as it enables the sharing of resources, knowhow and experience.

Where do you identify the most significant need for cooperation with regional partners in achieving the goals of the EU Green Agenda for the Western Balkans?

― Cooperation with partners in the Western Balkans is extremely important when it comes to achieving the goals of the EU Green Agenda. There are a number of areas in which co -

The passing of the Law on Energy and Regulation of Energy Activities in FBiH represents a deeply considered step in the management of the country’s energy policy

build upon international agreements like the Paris Agreement, their adoption represents the FBiH’s cultural and political commitment to global goals of sustainable development and environmental protection,” says the FBiH Minister of Energy, Mining and Industry. “This action doesn’t only demonstrate the political will to adapt to modern requirements, but also demonstrates a cultural shift towards a sustainable way of life and economy, which will have positive long-term impacts for society, the economy and the environment.”

However, our interlocutor adds, it is important to note that challenges also exist in the transition to sustainable energy. Some include a shortage of investment in renewables, a lack of infrastructure and technological capacities, as well as a lack of the political will needed to implement required reforms. It is therefore important for the state and its partners to work continuously to identify and overcome these challenges in order to advance towards completing the green transition process.

operation is essential to achieving sustainable development and environmental protection goals. One crucial area of cooperation is energy, where partners can associate in order to exchange knowledge, technology and resources with the aim of advancing renewable energy sources and improving energy efficiency.

It is likewise important to establish mechanisms for the joint planning

PROGRESS

Harmonising laws with the EU acquis demonstrates the political will to adapt to modern requirements for planning life and the economy.

and implementing of projects that contribute to reducing greenhouse gas emissions and adapting to climate change.

Additionally, cooperation is also essential in the domain of environmental protection, where partners can collaborate in preserving natural resources, managing waste, protecting biodiversity and reducing air and water pollution. Furthermore, it is important to establish mechanisms for dialogue and cooperation aimed at adopting policies and regulations that support sustainable development and environmental protection.

Viewed as a whole, cooperation with Western Balkan partners is the key to achieving the goals of the EU Green Agenda, as it enables the sharing of resources, knowhow and experience, as well as joint action in overcoming global environmental challenges. The principles of mutual respect, transparency and solidarity should form the foundations of this cooperation, to ensure that all partners benefit from joint efforts towards creating a more sustainable future. ∙

SANJA MIOVČIĆ

Executive Director of FIC Bosnia and Herzegovina

The Foreign Investors Council of Bosnia and Herzegovina is determined to support all initiatives linked to the transition to green energy, the circular economy and sustainability in a broader sense.

Given that the majority of our member companies come from EU countries, their experiences and knowledge ensure that, as an association, the FIC can provide a great contribution during the process of harmonising legislation

Empowering the Communities in Which we Operate

Our focus is on strengthening investments in renewables and energy efficiency models, the introduction of ESG standards at companies in BiH and the transition from a linear to a circular business model

such as the issue of future investments in renewable energy sources and the determining of carbon pricing (through the establishment of the Emissions Trading System (ETS) or through the Carbon Border Adjustment Mechanism (CBAM)) and the impact they could have on the country and the competitiveness of its economy. Through their positive practical examples and energy efficiency projects, our member companies have shown that, despite high energy consumption in certain sectors of industry, it is possible to reduce the overall carbon footprint and contribute tangibly to furthering the energy transition of Bosnia and Herzegovina.

Bosnia and Herzegovina’s FIC brings together more than 70 companies that have invested 4.5 billion euros and employ thousands across the country

in the countries of the region with EU Directives, Energy Policy and the integration process.

Our role can also be utilised in the process of creating a regional electricity market, which is considered essential for the energy transition process to run as smoothly as possible. Our members’ experiences can contribute to addressing many unresolved issues that await the country in the global decarbonisation process and just energy transition,

Our companies participate in almost all significant conferences and other events related to this topic, providing domestic companies with information about energy saving opportunities and presenting the latest technical solutions in the field of renewables. Likewise, through our network of partnerships with international development agencies operating in BiH and international financial institutions, we endeavour to familiarise companies in

BiH with the possibilities of financing energy efficiency improvements.

Our focus over the past two years, alongside the implementation of the aforementioned activities by our member companies, has been on promoting and advocating for the introduction of digitalisation in business and on the establishing of sustainable operations. Here we are referring specifically to three sub-areas in which we operate intensively: advancing investments in renewable energy sources and energy efficiency models; promoting and introducing ESG standards at companies in BiH; introducing a circular economy, i.e., transitioning from a linear to a circular business model.

When it comes to circularity, it is very important to us that, in addition to companies, the surrounding area in which those companies operate also be supportive and create the conditions required for this type of business model to be implemented, but also to attract additional new investors. This primarily relates to local communities that will start – whether through their own capital investments or through public-private partnership models – building the capacities and infrastructure needed to enable the applying of a circular economy, such as, for example, the possibility of using alternative fuels in industry through the construction of refuse-derived fuel (RDF) factories. ∙

Municipal waste recycling (% of total waste)

Recycling is virtually non-existent in the Western Balkans. Albania and Montengro, who are the leaders in the region, recycle around 10% of their municipal waste. All other economies recycle 1% or less of their waste. In Austria and Slovenia, for example, recycling rate is 60%.

Chimney in the Lungs

The current environmental crisis completely contradicts the fact that Bosnia & Herzegovina has signed numerous environmental protection agreements, directives and declarations over the past few decades

By ARMIN ZEBA Journalist

ccording to research conducted by the World Health Organization and other institutions of global importance, Bosnia & Herzegovina is Europe’s most polluted country, while its capital city of Sarajevo is among the world’s five worst cities when it comes to air quality, with a concentration of toxic particles that’s thirty times above the tolerance threshold level.

AAccording to the last Report on the state of the environment in Bosnia &

Herzegovina, which was published by the Ministry of Foreign Trade and Economic Relations more than ten years ago – the updating pace of which testifies to the lack of commitment among the competent authorities in this field – the main sources of pollution are represented by industry and traffic. With the inclusion of the remark that industry had also been the biggest polluter before the war, the Report includes a reminder that the country had 122 industrial plants for wastewater treatment back then, none of which are operational today – a similar situation also exists when it comes to fil-

ters on factory chimneys, which are still something of a rarity in BiH. Providing an illustrative example of this kind of stagnation, albeit in a slightly different context, is Sarajevo International Airport, where a fog dissipation system was installed in the buildup to the Winter Olympics more than four decades ago, and served to guarantee unhindered air traffic during all seasons – the airport’s managers today boast of having a “modernised anti-fog system”, the effectiveness of which is manifested during the foggy winter months by approximately a hundred flights having to be cancelled

and diverted due to poor visibility as a result of smog.

The aforementioned ecological debacle completely contradicts the fact that BiH has, over the past few decades, signed numerous environmental protection agreements, directives and declarations, including the European Green Deal. Still, as fast as the state is when it comes to signing such acts, it is even faster and more consistent when it comes to infringing on the obligations that they entail, and is therefore, among other things, the European Energy Community member against which EEC has launched the most proceedings. Also testifying to the vastness of the gap between environmental-energy theory and practice in Bosnia & Herzegovina is the continual insistence on launching new blocks at existing coal-fired thermal power plants, and equal consistence in blocking projects for the construction of hydropower plants and the expansion of gas connections, all while advocating in declarative terms for shifting to clean sources.

And yet, when it comes to the general public’s awareness of the importance of environmental protection, the truth is that BiH probably holds the world record for the number of environmental associations per capita, though this mostly pertains to organisations that lack any tangible impact and have the sole purpose of siphoning budget funds to the benefit of their heads. As such, it should come as no surprise that the only successful environmental protest in the post-war era – resulting in the banning of the construction of small hydropower plants in the Federation of Bosnia and Herzegovina – was actually a spontaneous campaign of the women of Kruščica, a village in Cen-

USED VEHICLES

Citizens can hardly afford a new car, let alone an electric or hybrid vehicle, and instead they drive European junk vehicles that are over 20 years old and have a maximum emissions standard of Euro 3.

tral Bosnia, who spent more than 15 months fighting, by blockading construction sites day and night, and ultimately fought off attempts to destroy their local river with the installing of mini hydro plants.

On the flip side, it can’t be said that citizens are faultless when it comes to the polluting of their own environment, given that – with the exception of pollution that’s a result of the comprehensive lack of a basic culture of cleanliness, and which could be minimised easily with the introduction of a more stringent penal policy – their negative contribution is primarily a result of poverty. Specifically, for the majority of the BiH population, which ranks among the poorest in Europe, solar panels are too expensive as sources of energy, and also applies increasingly to the cost of natural gas and even electricity, despite elec-

funds of political parties, in which they have the unequivocal support of foreign lobbyists, who strive, under the guise of advocating for a free market, to promote the entry of Western resellers of electricity into the country, the basic precondition of which is for the tariff in BiH to be made equal with that of Europe.

Such an energy policy results in households being compelled to use fossil fuels, primarily coal and wood, while during the winter months they often resort to using even more harmful pollutants, such as rubber and plastic. The situation is equally bad when it comes to motor vehicles, given that the average citizens can hardly afford a new car, let alone an electric or hybrid vehicle, and instead they drive European junk vehicles that are over 20 years old and have a maximum emissions standard of Euro 3.

AIR QUALITY

Sarajevo is among the world’s

5 worst cities when it comes to air quality.

BiH probably holds the world record for the number of environmental associations per capita, though this mostly pertains to organisations that lack any tangible impact

tricity prices being among the cheapest in the region, though simultaneously pretty expensive when compared to the country’s pitiful standard of living.

The electricity problem is also the most infuriating, because even though logic dictates that a country that exports electricity should provide that same energy to its citizens at an affordable price, local energy companies continuously seek new price hikes in order to compensate for the enormous salaries of their politically engaged employees and outflows to the dark

Summarising everything, and scratching a little deeper beneath the layers that prevent the “greening” of Bosnia & Herzegovina, it is evident that the absolute imperative to suppress the specific types of pollution flooding BiH society has been polluted by corruption. Room for optimism is sadly lacking here too, given that Transparency International has declared BiH the second most corrupt country in Europe, with only Russia deemed worse – and all negative titles in all areas have been reserved for that country until it ends its aggression against Ukraine. ∙

WASTE

Due to the high price of electricity, households often resort to heating with wood and coal, and sometimes even pollutants like rubber and plastic.

RECORD

Bosnia & Herzegovina is Europe’s most polluted country, while its capital city of Sarajevo has a concentration of toxic particles that’s thirty times above the tolerance threshold level.

Fairs beyond borders

Belgrade Hosts 45th Tourism Fair

Under the slogan “Adventure Starts Here!”, the 45th International Tourism Fair was held in Belgrade from 22 nd to 25 th February and showcased new destinations, first-minute offers, domestic and foreign accommodation capacities, tourist regions and other attractions. As is traditional, this year’s fair featured the most significant tourism agencies, associations, organisations, hotels, tourist centres, transport companies and international tour operators. The fair, which this year presented Greece as the official partner country, gathered nearly 400 exhibitors from more than 27 countries. The fair was ceremonially opened by Serbian President Aleksandar Vučić and Greek Tourism Minister Olga Kefalogianni.

5th International Agro Belgrade Fair Concluded

The 5th International Fruit, Vegetable and Viticulture Fair, Agro Belgrade 2024, was held at the Belgrade Fair from 25th to 27th January. This leading trade fair and conference is important to the entire region, as it marks an event that brings together producers of fresh, frozen and processed fruits, vegetables and grapes, bulk buyers, representatives of retail chains, manufacturers of agricultural ma-

chinery and equipment, representatives of nurseries, seed and chemical companies etc. This year’s edition of the fair featured more than 500 exhibitors from Serbia and the entire region, 90 domestic and regional companies and around 20 bulk buyers, including those that came from the UK, Canada, India and elsewhere.

GAST 2024 Held in Zagreb for the First Time

The 28th International GAST Fair, which is traditionally hosted by the City of Split, was held in Zagreb for the first time, from 23rd to 25th February. GAST 2024 was the largest national gastronomy event in the region and this part of Europe, bringing together the largest number of exhibitors and visitors since the pre-pandemic period. By being held in Zagreb, GAST allowed exhibitors to negotiate their HORE-

CA businesses at the national and regional levels, and to make timely preparations for the upcoming tourist season, thus realising even greater business potential. For the past 28 years, GAST has also been a gastronomic festival that showcases the tastes and aromas of the authentic dishes and drinks of Croatia and the region.

Celje Hosts 4th Agritech

The fourth fair of agricultural, forestry machinery and agricultural supplies, known as Agritech, was held in the Slovenian city of Celje in early February. The event included 105 exhibitors from six countries that showcased as many as 350 brands. On the first day alone, the fair attracted numerous visitors of all generations, who were offered not only a rich exhibition programme, but also forestry machinery demonstrations and tractor test drives. The fair is held biennially and is primarily intended for those professionally or personally involved in agriculture or forestry.

Furniture Fair Held in Skopje

The North Macedonian Furniture Fair took place at Skopje’s Boris Trajkovski Complex from 20th to 24th March and included an incred-

ible selection, exceptional offers and fantastic prices thanks to a large number of exhibitors from across the entire region. The organisers provided a larger exhibition space, designed to high standards, with an original concept that allowed visitors to find everything they need to redecorate their homes in one place – from simple and minimalist furniture to sophisticated and impressive pieces. The fair featured numerous exhibitors and over 70 domestic and international brands, offering a wide range of furniture, excellent prices and home decoration tips.

Tirana Hosts HoReCa 2024 Hospitality Fair

The 10th Hospitality Fair, HoReCa 2024, took place in Tirana from 22nd to 24th February. This significant hospitality business event, which brings together hotels, restaurants and cafés, focuses on presenting diverse food and beverage services integrated with a wide range of other activities. The fair provided an opportunity to showcase the latest trends and innovations in the hotel and hospitality industry, including products, services and technologies. In the exhibition area, visitors were able to check out kitchen equipment, restaurant

and bar supplies, hotel amenities, security and reservation systems, bedding, cleaning equipment, bakery and confectionery items, workwear and footwear.

Jubilee Beauty & Hair Expo Held in Zagreb

Beauty & Hair Expo Zagreb has been bringing together regional industry leaders and all beauty industry enthusiasts for a full 25 years. As a gift to all women, this year’s event at the Zagreb Fair symbolically opened on 8th March, marking International Women’s Day, and ran until 10th March. The jubilee threeday beauty event gathered renowned domestic and international brands and exhibitors from the world of beauty and health. The business segment of this dynamic industry was represented in B2B meetings that enabled direct contact between participants from the beauty industry, while a professional and interesting accompanying programme was announced alongside the Beauty & Hair Expo Zagreb exhibition.

Zagreb Hosts Nautical Fair and Hunting & Fishing Days Event

The 31st Zagreb Nautical Fair and 6th Hunting & Fishing Days Event were held at the Zagreb Fairgrounds from 14th to 18th February, attracting over 350 exhibitors from 37 countries. According to organisers, the two parallel events attracted more than 25,000 visitors. The Nautical Fair featured over 300 exhibitors showcasing more than 200 vessels, while the 6th

Hunting & Fishing Days Event brought together 48 exhibitors from seven countries. In addition to the exhibition segment, visitors were offered a rich educational and professional programme, including a hunting gastronomy show, a hunting dog show, falconry presentations and archery demonstrations.

Summer Employment Fair Held in Podgorica and Kotor

The Summer Job 2024 seasonal employment fair took place on 6th March at the University Sports and Cultural Centre in Podgorica and on 7th March at the Faculty of Tourism and Hotel Management of the University of Montenegro in Kotor. This 16th edition of the fair was organised by the Student Parliament of the University of Montenegro, in collaboration with the Career Development Office and Lifelong Learning Centre of the University of Montenegro. Summer Job represents a unique form of employment fair, primarily due to its results and significance for young people and the tourism industry, but also for the country as a whole. The fair project’s main goal is to establish direct contacts between young people and employers during the tourist season.

Albania is Greening Fast

Albania’s success is a result of government efforts and significant investments by European companies, members of FIAA, spanning renewable energy, oil and gas, construction, mining and manufacturing

MARINELA JAZOJ

Executive Director of the Foreign Investors Association of Albania

Amid climate change challenges, Albania, which is primarily reliant on hydropower, is transitioning to a resilient green economy by diversifying into solar and wind energy. Albania is to date also the only Western Balkan country to have approved the objectives set by the European Union on renewable energy and energy efficiency, thus acting as a catalyst for regional joint success towards the fulfilment of all EU requirements in the energy domain. These facts have made the country attractive to international investors.

In addition to the good work of the Albanian Government in achieving this success, an important role is played by the country’s foreign investment com-

munity, under the banner of the Foreign Investors Association of Albania [FIAA], who have made important investments in the fields of renewable energy, oil and gas, construction, mining and manufacturing.

These companies mainly hail from the European Union and have a European entrepreneurship culture and advanced standards, and which – through their investment policies and energy-efficient technologies – support green transition and dialogue on building a green, low carbon and climate-resilient economy in the country. These investors are the best examples and, through an organisation like the FIAA, they transfer their knowhow and provide policy advisory services that help the country and the local business community

vey that focus on advancing the business climate in Albania, the Business Ethics booklet, and various conferences and networking events that the association organises.

The FIAA operates active committees (Tax, Energy, Digital Economy) that comprise top managers and experts from its member companies. These forums discuss government and stakeholder-related matters, underscoring the association’s commitment to elevating sector impact in Albanian enterprises and the broader business ecosystem.

The FIAA White Book is the main instrument for improving the business climate. It represents the private sector’s evaluation of the country’s business climate and serves as a transparent platform for dialogue with the au-

Albania is to date the only Western Balkan country to have aligned with EU renewable energy and efficiency goals, thus enhancing its appeal to global investors

to promote green solutions and energy efficiency investments. On the other hand, our member companies have an important role with their corporate environmental, social and governance (ESG) performance. Furthermore, they are also investing in the right skills to advance the green transition process.

The FIAA’s most effective contributions to the development of Albania’s economy and the improvement of the country’s business climate – and which receive solid recognition from member companies and local and international partners – are the committees it has founded, the FIAA White Book and Sur-

thorities. Its purpose is to make doing business in Albania easier by removing unnecessary barriers and proposing concrete reform proposals to the country’s authorities.

The FIAA’s Annual Business Climate Survey is a key publication that garners significant attention from the local media, government and international institutions operating in Albania, while its Business Ethics booklet is produced every few years and includes the best business practices promoted by international institutions, such as the EU and OECD, as well as by member companies. ∙

Net electricity imports as a share of demand in 2022, per cent (positive values stand for imports)

Only Bosnia and Herzegovina and Albania are net exporters of electricity. Croatia and North Macedonia import close to 20% of the electricity they use.

Croatia

North Macedonia

Austria

Slovenia

Kosovo*

Serbia

Montenegro

Albania

Bosnia and Herzegovina

Rivers don’t Forgive

Despite Albania’s commitment to European and global environmental initiatives, protests persist against threats to biodiversity, freshwater supplies and the expropriating of national parks

By GERI KOLGEGA Journalist

When it emerged from the challenging communist era back in 1991, Albania set its sights on Western democracy and a future aligned with Europe. Despite initially overlooking environmental concerns during the early EU transition period, increased awareness has been evident since 2006. The accession process prompted engagement, with Albania actively participating in and ratifying international environmental conventions. As negotiations advanced, a sense of closeness to Europe fostered increased environmental protection efforts.

Such progress proved very important, given Albanians’ strong connection with nature and the fact that near-

ly 25% of the country’s GDP is generated by agriculture. Beyond this, waterways are also vital for Albania, given that the country generates 100% of its electricity from renewable sources.

Albania adopted a “Concessions Law” in 2007, which paved the way for the construction of private hydroelectric power plants that aimed to turn Albania into an “energy superpower”. This law envisaged the construction of 443 hydroelectric power plants – the highest number in the region and around Europe.

The enforcing of this law sparked reactions and protests in subsequent years, particularly when new power plant projects threatened ecosystems, protected areas and drinking water. Various environmental associations began to emerge, the most prominent among them being the or-

ganisation “Protect the Rivers”. The unchecked increase in hydroelectric power plants began stirring residents in all corners of Albania from 2016, with the planned number of 430 hydro plants having increased to 540 by 2015.

A robust campaign under the slogan “Don’t Touch Valbona” was launched, with citizens, interest groups and local residents protesting the planned construction of 12 hydroelectric power plants along the course of the River Valbona in northern Albania. Despite legal battles and the non-compliance of private companies, efforts led by local NGO “TOKA: Organisation for the Protection of the Albanian Alps” succeeded in halting the construction of one of the three hydropower plants planned for this national asset.

A significant effort centred around the defence of the River Vjosa, Europe’s last wild river, was initially led by the arts community through concerts protesting hydropower plants. The cause gained momentum when 20 environmental associations proposed that the Vjosa be proclaimed a national park. Thousands of residents participated in demonstrations and renowned Hollywood actor Leonardo Di Caprio even added his influential voice to the protest. The government acquiesced, officially designating the Vjosa a national park in March 2023.

Protests against the planned Skavica Hydro Power Plant, set to be one of the largest in the Balkans, have been widespread due to concerns that it would submerge numerous villages. Environmental organisations filed a lawsuit in the Constitutional Court of Albania, which criticised the lack of transparency towards residents

but nonetheless allowed the project to proceed. With the government remaining silent on the issue for almost a year, the concessionaire still completed the feasibility study. Residents of five municipalities in northern Albania are actively resisting the construction of hydroelectric power plants, resorting to protests that have included acts of vandalism and pursuing legal action.

Moreover, in response to popular pressure and environmental reports on the disappearance of some rare species of fish, the Albanian government implemented a Hunting Moratorium to run from 2014 to 2026, in an effort to address illegal hunting and preserve biodiversity. Another moratorium, this one covering illegal logging, was enforced in 2016, also in response to citizen protests over perceived exploitation, with the destruction of the habitat of the rare Balkan Lynx playing a crucial role in this decision. Sensitivity to rare species also prompted the 2022 ban on fishing the Koran fish, aka the Ohrid trout, in the city and municipality of Pogradec on Lake Ohrid, one of the world’s oldest lakes.

In southern Albania, the proposed construction of the new Vlora Airport in the Vjosa-Nartë protected area has met with significant opposition among citizens and civil society. The project is formally opposed by 37 environmental associations, citing the potential destruction of ecosystems that threaten over 10,000 bird species, as well as landing difficulties for aircraft. Alleged violations of the Bern Convention led to this matter being brought before European courts, which called for the suspending of works. The government nonetheless proceeded with construction, setting a completion deadline of 2025.

Opposition has also been on the

PRESSURE

In 2014, in response to public pressure and environmental concerns, the Albanian government imposed a Hunting Moratorium until 2026 to combat illegal hunting and protect biodiversity.

rise when it comes to two floating thermal power plants in Vlora, operating on heavy oil and anchored in the Triport area that’s crucial for fishing vessels. Fearing water and air pollution, residents have protested the arrival and operating of these plants. Legal action has been taken by one of the plant-owning companies, including filing defamation lawsuits against protesting residents. Despite calls for the project to be halted, the government has persisted in efforts to make these power plants operational.

The integrated management of urban waste poses a challenge in Albania. Initial 2015 proposals for incinerators faced opposition from residents who opposed having them located near their villages. Despite opposition, the government – citing

idents. Quarries have also caused irreparable damage that threatens to destroy national assets. The most famous case is that of Mount Tomorr, which is considered sacred and prompted protests from residents and the Bektashi community, leading to works being halted immediately.

A new law in the Albanian parliament seeks to alter the management of protected areas, transferring control to municipalities and allocating 20% of their area for construction. At least six environmental associations are actively opposing the law in parliamentary discussions and amendments, alleging that the government aims to further destroy green areas through construction. Simultaneously, a lawsuit has been filed in the administrative court against a government deci-

A surge in the unchecked construction of hydropower plants has sparked widespread concern among Albanian residents since 2016

an environmental emergency – enacted a special law in 2017 that led to the construction of two incinerators in Elbasan and Fier, with plans for a third in Tirana. These incinerators currently remain inactive due to political opposition over their commissioning and concerns from residents who believe that they would contribute to environmental pollution by incinerating waste.

The construction and exploitation of quarries is another issue that has mobilised the residents of many Albanian villages. Quarries that are often in violation of environmental norms have been built near inhabited areas, creating strong seismic activity and damaging the homes of local res-

sion attempting to alter the boundaries of 11 national parks. Despite limited citizen reactions, the government persists in advancing the law through parliamentary committees.

A recent United Nations report identifies Albania as one of the countries that are most vulnerable to the impacts of climate change, highlighting the severity of potential consequences. Institutional efforts to address this issue have been notable, including the approval of the National Energy and Climate Plan in 2021, extending until 2030. Businesses are also being encouraged to invest in renewables, positioning Albania as the region’s fastest-growing energy self-producer. ∙

THREAT

A recent United Nations report identifies Albania as one of the countries that are most vulnerable to the impacts of climate change, highlighting the severity of potential consequences.

Nearly 25% of Albania’s GDP is generated by agriculture.

PROTESTS

The opening of a quarry on the sacred Mount Tomorr sparked protests from residents and the Bektashi community, leading to works being halted immediately.

Still Waiting to Join Europe

In today’s globalised yet divided world, art has also changed, as has the attitude toward the notion of nation, with many artists and intellectuals having questioned the concept of nation states

DRIANT ZENELI

Albanian visual artist

n his oeuvre to date, Driant Zeneli has utilised various forms of artistic production, from drawing to film and performance. The work of his trilogy The Animals. Once Upon a Time… in a present time has to date been presented in more than 14 cities around the world, from Venice and Sofia to Hamburg. “For me, it is important to present these fables placed in these brutalist architectures in the Balkans, as a great heritage of the past and as a symbol of continuous transformation and the instability of this geographical area in the world called the Balkans,” says Zeneli in this exclusive interview for The Region.

IFailure, utopia and dreaming have a common element that shows up often in my work: gravity. This gravity somehow causes us to fall and rise again every day, with feelings of love and hate towards the planet

You represented the Albanian Pavilion at the 54th (group show) and 58th (solo show) Venice Biennale International Art Exhibition. Could you share some insights into the inspiration behind your creations and how these accolades have influenced your artistic journey?

― More than representing one’s nation, today one has to represent those who don’t have the possibility of repre-

senting themselves. The Venice Biennale emerged in 1895, in a very nationalist format. We are obviously talking about very different times, in which the importance of the nation state was on the rise, particularly in central Europe. In today’s globalised yet divided world, art has also changed, as has the attitude toward the notion of nation, with many artists and intellectuals today questioning the concept of nation states. There are also more places where we can exhibit nowadays,

with many biennials open around the world, and this is a chance for us to get to know other worlds and cultures. During these years, my work has also been enriched thanks to these events that I’ve been part of, particularly in the Balkans, such as the October Salon biennale in Belgrade.

You’ve been actively engaged in performances and collaborations with cultural institutions from Tirana, Pristina, Skopje and Belgrade.

Photo: Johan Kosta

How do these collaborations contribute to your artistic vision and what do you believe is the significance of cross-cultural exchanges in the region’s contemporary art scene?

― Working in the Balkans is always a way to learn more about the world that I come from. I lived in Italy for 22 years, where I also studied and formed myself as an artist. In more recent years, I’ve wanted to discover more about the sociopolitical and cultural context of my origins. I began with Kosovo, where I started doing research on the National Library, representing the largest library in Kosovo. Opened in 1982, it is a place full of history and memories, while there is something interesting in the conflict of perceptions of this architecture that was the work of Croatian architect Andrija Mutnjaković.

So, it was in Pristina that I started working on my first film No Wise Fish Would Escape Without Flying for the trilogy The Animals. Once upon a time… in the present time, which I made in collaboration with the children of the BONEVET Foundation in Pristina. We created a fairy tale around this building, designing the characters of the film as robots. I then continued with the second chapter, focused on the Pyramid of Tirana, with the film How Deep can a Dragonfly Swim Under the Ocean? The film opens with the story of Rilond Risto, a former prison inmate who developed his passion for the world of flying insects by building micro robots using all the mechanical material he found in prison. Then came the film that concludes the trilogy, The Firefly Keeps Falling and the Snake Keeps Growing, which was made in collaboration with the students of the Faculty of Mechanical Engineering, Ss. Cyril and Methodius University in Skopje, North Macedonia.

After this long adventure that ran from 2019 to 2022, I started a new trilogy, The Valley of the Uncanny Lovers, the first chapter of which, entitled The Leaf, was created in Belgrade together with students of the University of

Belgrade Faculty of Drama. This project was launched at the invitation of the Cultural Centre of Belgrade (KCB), while I’m now developing the second chapter in Germany’s Ruhr region.

The redefining of the notions of failure, utopia and dream represent the core of your research. As an artist, how do you see your role in addressing social or political issues, and what impact do you hope your work will have on the observer, both locally and internationally?

― Failure, utopia and dreaming have a common element that shows up often in my work: gravity. This gravity somehow causes us to fall and rise again every day, with feelings of love and hate towards the planet.

I often wonder whether I’m interested in dreaming a vision or visioning a dream. I am drawn to people who try to overcome their limitations, who live in both harmony and conflict with the force of gravity. To me, that means being political, and I always hope that my work speaks many languages, so that it can extend from the local to become global.

I was born in Albania in 1983, at the height of the communist regime, and my memory of that time is preserved in the images and voices of my parents, who said that we would one day also be part of Europe. I would awaken at 7am to music for school; my mother would often play The Final Countdown by Europe. More than 30 years have since passed. That song has been consigned to history, the band has broken up and then reunited, and I’m still waiting to become part of Europe.

Your recent exhibitions in Rome, Frankfurt and Dhaka garnered attention for their innovative approach and thought-provoking content. Could you tell us more about the concepts behind these exhibitions and how they reflect your own evolution as an artist?

― They are obviously three different contexts and three very different cities, which ensures that the perception also differs. The work of the tril-

ogy The Animals. Once Upon a Time… in a present time has so far been presented in more than 14 cities around the world, from Venice and Sofia to Hamburg. For me, it is important to present these fables in the brutalist architecture of the Balkans, as a symbol of great heritage and the continuous transformation and instability of this geographical area in the world called the Balkans.

As an artist who hails from the Western Balkans, how do you navigate the intersection of personal identity and broader cultural narratives in your work? And how do you see the role of contemporary art in shaping and challenging social perspectives within the region and beyond?

REPRESENT

More than representing one’s nation, today one has to represent those who don’t have the possibility of representing themselves.

The Balkans have always been more open for artists than politicians wanting it for their own interests. The question I ask myself today is how long we will have to tolerate narratives that lead to hate and conflict?

― Almost all of my works begin as a journey with an unknown end, yet I know what I’m drawn to. As such, each project contains a different place, a new study that imposes many challenges to be confronted. I collaborate with many people, many artists, but also institutions in the Balkans.

A common problem that I confront when discussing the politics of our nations with my colleagues is the issue of the narrative that each of us has set for ourselves from the politics of our countries, constructed between facts and mostly imagination and populist propaganda. The Balkans have always been more open for artists than politicians wanting it for their own interests. The question I ask myself today is how long we will have to tolerate narratives that lead to hate and conflict; Who benefits in all of this? ∙

Even Greater Scramble for Good Workers

Given the labour force shortages and lack of suitable personnel in certain sectors, there are ample reasons to expand the common labour market beyond the borders of the Open Balkan initiative to encompass all Western Balkan economies

The start of March saw the launch of the Open Balkan common labour market, which enables citizens of Albania, North Macedonia and Serbia to apply, gain employment, live and work in the other two countries under the same conditions as citizens of those countries, while it enables both local and foreign companies operating in the area to find the workers they lack on the markets of all three members of the initiative.

Thanks to the technical interlinking of national eGovernment portals, the procedure to obtain an Open Balkan identification number from one’s home country and apply for free access to the labour market and obtain a permit of another country has been simplified massively, such that it is now simpler than employing foreigners in any of the three countries, without the need to obtain work and residence permits or collect piles of paper or electronic evidence... In just a

few digital steps.

Despite the competent eGovernment administrations of the three countries having not yet released official data on the number of applicants by the time this edition went to print, other than to note that interest is high, we have unofficially discovered that almost 2,500 citizens of Serbia, Albania and North Macedonia registered with their eGovernment in the first seven days, receiving their Open Balkan ID as an entry ticket to use electronic services within the Open Balkan, initially to apply for employment in one of the other countries.

As such, all job seekers and workers now have the opportunity to find work on a significantly larger market of more than 11 million people, as opposed to being restricted to their own small national labour markets of 6.6 million (Serbia), 2.8 million (Albania) or 1.8 million (North Macedonia). According to national statistics that, in truth, aren’t fully harmonised in terms of methodologically, Serbia, Albania and North Macedonia have a combined working population of 5.4-5.5 million, with approximately 4.9 million employed and 550,000 unemployed.

Flash analysis of the individual

LABOUR FORCE

markets indicates that the three countries have largely overlapping needs. For example, all Open Balkan member countries, just like the entire region, but also the wider European Union, lack construction workers, lorry and bus drivers and IT experts, all of whom will feature on lists of the most sought-after occupations needed by all sectors for a long time to come. Albania is currently most in need of workers in the tourism and hospitality sectors, construction and textiles, as well as IT professionals, while North Macedonia needs workers for jobs in the mechanical and electrical engineering, food and chemical industries, as well tourism and hospitality. The situation is similar in Serbia. One recent survey saw Serbian companies involved in the dual education system express the greatest need for personnel in construction, mechanical engineering and electrical engineering, but also in the service sectors – retail and hospitality, while as many as 35 per cent of respondent companies are interested in educational profiles in the fields of mechanical engineering and metalworking.

It is almost certain that Serbia will have the greatest influence on shaping supply and demand on the common labour market in the coming years, not only because it is the Open Balkan’s largest economy and currently has a slightly higher average salary than Albania and North Macedonia, but also because of its large investment cycle that includes the construction of the World EXPO complex.

It remains to be seen whether the Open Balkan common labour market will change the image of the national markets of the initiative’s member countries, and if so to what extent and how, but also how much it will alle-

YOUTH

Connecting three smaller labour markets in a single larger one not only creates new possibilities for the unemployed, but also for the employed – particularly young people who are more mobile.

viate labour shortage problems, the cost of labour and the expectations of workers, who will be more attractive and in which segments.

Despite failing to bring together all six Western Balkan economies, and for non-economic reasons, the fact remains that – following the significant easing of mutual trade and the formation of a common labour market –the Open Balkan initiative has made regional cooperation possible and brought it to life, providing concrete, tangible benefits to both citizens and the economy, as well as future investors.

New possibilities aren’t only available for the unemployed, but also for the employed – particularly young people who are more mobile – to find more rewarding work in other Open

Borders can’t and shouldn’t be closed and nobody has the right to deny anyone the opportunity to go where they see better opportunities for higher earnings and personal and professional advancement. However, alarming data from last year’s Balkan Barometer survey shows that as many as 70.6% of Western Balkan respondents aged 18 to 25 are seriously considering living and working abroad. When asked what the governments of their countries should devote more attention to, just under half of those surveyed listed job opportunities and almost 40 per cent ranked education as their top priority.

From an analyst’s perspective, positive developments on the regional labour market (with an employment rate

70.6% of Western Balkan respondents aged 18 to 25 are seriously considering living and working abroad.

Many thousands of new jobs will be created in Serbia until 2027, but also during the EXPO, both for companies and people from the Open Balkan countries, but also from across the Western Balkan region

Balkan economies that will provide them with greater opportunities than their current job intellectually, materially and in terms of career advancement. This enables them to remain here in the region instead of emigrating in search of better opportunities.

Greater intra-regional mobility of workers cannot in and of itself halt migration to developed countries, where in all honesty opportunities are greater and conditions better. But it is – together with further economic growth and improved standards, education that meets the needs of the new digital and green economy, and simplified procedures for hiring foreigners from other countries – one of the ways to alleviate the problem of the outflow of labour.

TEST

that’s never been higher and a record low unemployment rate) aren’t as encouraging when viewed from the point of view of companies. The problem of labour shortages and a lack of suitable personnel in certain sectors exists and threatens businesses across the entire Western Balkans, in all economies –as much in Bosnia and Herzegovina, Montenegro and Kosovo as in Serbia, Albania and North Macedonia. However, this problem also afflicts the wider region, including neighbouring EU member states.

This is reason enough to expand the common labour market beyond the borders of the Open Balkan countries to encompass all Western Balkan economies. ∙

Due to the upcoming tourism and agriculture seasons, but also increased construction industry activity during the summer months, seasonal workers are likely to be the first to test the common market.

LIMITATION

Greater intra-regional mobility of workers cannot in and of itself halt migration to developed countries, where in all honesty opportunities are greater and conditions better.

Environmental Taxes, Per cent of GDP

Environmental tax revenues in the Balkans are rather high, often higher than in Austria. This is due to excise duties on fossil fuels, but also the relatively high use of cars.

Serbia

Croatia

Slovenia

Albania

Montenegro

Austria

North Macedonia

Kosovo*

Source: IMF

Expenditure on environment protection, % of GDP

Despite the relatively high environmental taxes, public spending on environment protection remains low. It is several times lower than the revenues from environmental taxes. This suggests that spending on environmental protection can be easily increased.

North Macedonia

Slovenia

Austria

Serbia

Albania

Croatia

Kosovo*

Source: IMF

Reduced Waiting Times, Increased GDP

According to the calculations of World Bank analysts, if the average time required to clear a border crossing was shortened by three hours, the GDP of each of the six Western Balkan economies could grow by as much as three per cent over the medium term

t was recorded in early March that haulage vehicles carrying goods from Serbia into the EU had to wait for up to 30 hours at the Batrovci-Bajakovo border crossing between Serbia and Croatia. The record-breaking delays were registered by hauliers shortly after 7 am on 7th March, when an eight-kilometre-long column had formed at the exit from Serbia comprising around 450 waiting trucks – and these weren’t only

I

Serbian trucks, but also vehicles arriving from other Western Balkan countries and from Western Europe, from Croatia and Slovenia, Bulgaria, Greece, Türkiye etc. There were also long waiting times at other entrances to the EU at that time – namely at borders with Hungary. In truth, those delays were slightly shorter and mostly confined to the Horgoš border crossing, where they reached up to 22 hours on 6th March. At the same time, en-

trances to Serbia were largely unobstructed - with just an hour’s wait at Bajakovo on the Croatian side and about two hours at Röszke on the Hungarian side.

Last year’s World Bank analyses confirmed previous calculations that haulage vehicles unnecessarily lose 26 million hours a year waiting at borders between the Western Balkans and the European Union. A simple mathematical equation reveals direct losses

BORDERS (GREEN LANES)

of 130 million euros for haulage companies. With the growth of traffic, an increase in the number of articulated lorries crossing borders and an increase in waiting times, the latest estimates of fixed costs alone rise to almost 170 million euros. The costs incurred by extended waiting times and delayed goods are paid not only by the haulier, but also by all the companies whose goods they transport: local firms, but also companies from the EU that have invested in Serbia and other countries of the region and that export their products from the Western Balkans to the rest of Europe and the world, and among them are Croatian, Slovenian and Hungarian com-

RESTRICTIONS

The migrant crisis raised the border delay problem to fever pitch, but long waits existed before this crisis and will continue after it abates, unless physical, administrative and other restrictions are removed asap.

panies, but also other companies that sell their products on the Western Balkan markets or buy from Western Balkan producers… and their customers.

Why are lorries waiting longer at entrances to the EU than at exits; and why do they wait longer at borders with the EU (last year averaging between 5 and 9.5 hours) than at borders within the region, where the average delay was registered as lasting between just a few minutes and an hour and a half?

Despite the EU having for years called on the leaders and administrations of the Western Balkans to remove their mutual barriers to doing business, including delays at borders, and to build a common regional market as a zone enabling the free flow of people, goods and capital – which

good neighbourly agreements and the implementation of those agreements, with or without minimal investments.

“Let’s for starters harmonise the working hours of border services and ensure that all border crossings, or at least the busiest ones, operate 24 hours a day, seven days a week. For example, phytosanitary inspectors at the Batrovci border crossing work 24 hours a day, seven days a week, but the working hours of inspectors on the Croatian side are weekdays from 7am to 7pm, Saturdays from 7am to 3pm (phytosanitary) and from 7am to 7pm (veterinary), while they don’t work at all on Sundays and holidays,” they explain at the CCIS.

The CCIS also highlights many more opportunities to make quick improvements: by increasing staff num-

According to chambers, one of the most effective ways to speed up flows is to introduce joint controls, i.e. to establish integrated borders with the EU at the most popular crossings

forms part of the new Growth Plan for the Western Balkans – it turned out that both problems and costs are much higher at external borders – in trade with the EU – than they are within the region.

At the Chamber of Commerce & Industry of Serbia (CCIS), which has –together with other chambers of the Western Balkans 6, but also with the Chamber of Commerce of Croatia, and with the support of the Transport Union – been addressing Brussels and individual governments for years, appealing for the problem to be solved, they propose an entire set of specific solutions. They insist that most of them are just matters of good will, of

bers and better organising the work of existing personnel; by opening more counters during peak hours, purchasing equipment – such as additional scales for weighing loads, implementing minor infrastructure works like the installing of lighting at border crossings or the constructing of 50-70 metres of roadways in the inter-border area in order to better connect the two terminals.

One example of good practice is already operating within the Western Balkans, within the framework of the Open Balkan initiative, at the Preševo-Tabanovce border crossing between Serbia and North Macedonia. Testifying to the claim that this is also

PREREQUISITE

The prerequisite of all prerequisites for accelerating traffic is increasing the infrastructure capacities of border crossings – expansion, reconstruction, modernisation, and constructing additional new lanes.

PRACTICE

An example of good practice already operates within the Western Balkans, within the framework of the Open Balkan initiative, at the Preševo-Tabanovce border crossing between Serbia and North Macedonia.

BORDERS

Last year’s World Bank analyses confirmed previous calculations that haulage vehicles unnecessarily lose 26 million hours a year waiting at borders between the Western Balkans and the European Union.

possible at borders with the EU is the integrated Leuseni-Albita crossing between EU member state Romania and non-EU country Moldova, which started operating last April.

Mutual electronic exchanges of documentation – customs, phytosanitary and veterinary clearances – that enable advanced announcements of arrivals, with paperwork reaching

If the costs incurred by border delays were fully measurable, they would surely be measured in the billions of euros. Every hour lost at Western Balkan –EU borders costs at least five euros per vehicle

the border before trucks and controls only carried out on “risky” trucks, represents the essence of the Green Corridors that were established in the Western Balkans during the first months of the pandemic, but also the Green Lanes from the EU, which the region’s chambers of commerce have long been advocating for, and they have been joined lately, and more loudly, by Western Balkan politicians.

The prerequisite of all prerequi-

sites for accelerating traffic is increasing the infrastructure capacities of border crossings – expansion, reconstruction, modernisation, better equipping of existing crossings and the construction of additional new lanes. The fact is that infrastructure on access roads and border crossings hasn’t kept pace with the increase in volumes of traffic, such that today the same number of lanes serve a significantly larger number of lorries than used to be the case. And yet, there are encouraging interstate agreements (Serbia’s agreements with North Macedonia and Hungary, for example) that have led to official government decisions and works implemented on the ground.

Business leaders also expect the Croatian and Serbian governments to make such agreements on the op-

erational and infrastructure improvements of the Batrovci-Bajakovo crossing, but also the Šid-Tovarnik crossing. According to the Serbian and Croatian chambers, when it comes to easing the burden on the Batrovci-Bajakovo crossing, it is equally important to remove the even greater restrictions that exist on the transport of goods by rail, and to do so as quickly as possible. For starters, this would entail activating the Šid-Tovarnik border crossing, or rather establishing border inspection control on the Tovarnik side.

According to the calculations of World Bank analysts, if the average time required to clear a border crossing was shortened by three hours, the GDP of each of the six Western Balkan economies could grow by as much as three per cent over the medium term, while additional growth would also be recorded by neighbouring EU countries as a result of the increased volume of the goods exchange with the Western Balkans.

This is a small investment with big benefits. And it would make things better... for everyone. ∙