Serbia to Build Safe, Efficient, and Climate Friendly Railway System with Support from World Bank

Belgrade: Serbia is intensifying its focus on infrastructure development by increasing the safety, efficiency, environmental sustainability, and regional connectivity of its railway through an upgrade of 3,735 km of this network. Phase 1 of the Multi-Phase Programmatic Approach for Serbia Railway Sector Modernization Project was approved today by the World Bank Board of Directors, providing $62.5 million of the program’s overall financing envelope of $400 million. The World Bank is cooperating with the French Development Agency with a 50 percent joint co-financing of Phase 1 – taking advantage of aligned priorities such as green transport and regional integration and bringing the total investment for this phase to $125 million.

“Serbia’s rail network is a major asset for the country with the potential to play a strategic role in the nation’s growth and job opportunities,” said Stephen Ndegwa, World Bank Country Manager for Serbia. “The program will lead to better quality infrastructure, improved safety, enhanced in-country and regional integration, accelerated economic growth, and an improved business environment in the region.”

“A renewed and modernized rail network will become an essential part of transforming multi-modal transport in the country and the program is fully aligned with Serbia’s European Union accession agenda, including its commitment to the EU’s Green Deal and climate neutrality, which envisions a 90 percent reduction in transport emissions.”

Through this operation, the World Bank is supporting the Republic of Serbia in its effort to transform its rail sector into a safe, sustainable, and effective railway system – linking it to key export markets while simultaneously lowering the carbon footprint of this sector. According to preliminary assessments, the portion of the project that will lead to mitigation or adaptation benefits for project beneficiaries – also known as climate co-benefits – is expected to exceed 89 percent, amounting to $111.28 million.

Overall, the program focuses on three key outcomes: an increase in network utilization of 5 percent; a reduction of fatalities on the rail network by 23 percent; and a 10 percent increase in the market share of national cargo rail over the next 10 years.

With plans to invest €3.3 billion in its rail network over the next decade, Serbia aims to fully electrify its rail line tracks, fully implement the European Railway Traffic Management System, remove speed restrictions, improve freight line capacity on the core network, and enhance the management of rail assets. This expected transformation is essential for boosting investment and growth in Serbia, lowering the climate footprint associated with trade and transport activities, and ensuring connectivity for passengers and freight. This is well aligned with EU transport policy and trans-European network requirements. The three stages of the World Bank project will include infrastructure investments and asset management, initiatives to strengthen institutions in the sector, and modernizations efforts.