The political agreement between the European Parliament and the Council of the EU regarding the IPA III instrument was reached on 2 June 2021. On 15 September 2021, the European Parliament, together with the Council of the EU, adopted the Regulation on the IPA III instrument for the 2021–2027 period. The Regulation officially entered into force on 20 September 2021, following its publication in the Official Journal of the European Union, with a retroactive application date starting from 1 January 2021. In this way, it was officially established that in the 2021–2027 period, EUR 14.162 billion will be made available to all IPA beneficiaries through this instrument, and part of the prerequisites for signing and implementing IPA 2021 and future IPA Action Programmes developed by the Republic of Serbia are fulfilled.
The general objective of IPA III is to support beneficiaries in implementing political, institutional, economic, and social reforms necessary for their alignment with EU values and rules and for achieving EU membership. Additionally, the regulation proposal includes a list of specific objectives grouped into five categories (so-called Windows).
1. Rule of law, fundamental rights and democracy (15.1%)
2. Good governance, alignment with the EU acquis, strategic communication and good neighbourly relations (16.6%)
3. Green Agenda and sustainable connectivity (42.4%)
4. Competitiveness and inclusive growth (22.3%)
5. Territorial and cross-border cooperation (3.5%)
To achieve a balanced distribution of funds among IPA beneficiaries, the EC has proposed the principle of “fair allocation”, which will be measured throughout the entire implementation period of IPA III (2021–2027) rather than on an annual basis. However, access to the funds will, in addition to the aforementioned principle, be based on criteria such as: alignment with the strategic framework and the IPA III programming framework, readiness of projects/programmes for implementation and their expected impact, and progress in the European integration process with particular attention directed to the areas of the rule of law, fundamental rights, and good governance.
All IPA III beneficiaries will be required to prepare the so-called Strategic Response, a document that would contain an overview of the alignment between the national strategic framework and the IPA III programming framework across all five “Windows” (priority areas). This document will, among other things, specify the actions proposed for financing from IPA III funds for the period from 2021 to 2024.
The Strategic Response for the period up to 2024 will include an analysis of the situation, priorities, and measures for all five “windows” (priority areas) aimed at achieving the objectives defined in the IPA III Programming Framework.
Existing IPA structures should serve as a basis for the efficient use of this instrument as well as other potential sources of EU funds. In this way, as well as by implementing IPA programmes through the indirect management model, the strengthening of capacities necessary for transitioning to the use of Cohesion Policy funds will continue. The main partners in the planning and programming process of the IPA III instrument will continue to be, as before, the National IPA Coordinator and the EU Delegation.
You can find more information at the following link: https://ec.europa.eu/neighbourhood-enlargement/enlargement-policy/overview-instrument-pre-accession-assistance/how-does-it-work_en
IPA 2021
OVERVIEW OF THE ANNUAL IPA PROGRAMME FOR 2021
The EU’s contribution to the implementation of the annual IPA programme for 2021 is EUR 122.14 million. Below is a description of the actions that are part of this programme:
ACTION DOCUMENT SUPPORT FOR THE EUROPEAN INTEGRATION PROCESS
1. Support for the State Auditing Institution.
The goal of the action is to contribute to the capacity strengthening of the State Auditing Institution for conducting strategically oriented audits and audits in the field of environmental protection, as well as developing a new recommendations system that confirms the benefits of performing the function of the State Auditing Institution.
Budget: EUR 1.5 million
Management model: indirect (twinning)
2. Support for increasing efficiency in budget implementation and public finance management, which includes the following interventions:
2.1. Support in the field of internal control of public finances and in the implementation of the Managerial Accountability Strategy. The action includes support in improving managerial accountability and control systems in the public sector, further development of the internal audit function in the public sector and strengthening the monitoring role of the Central Unit for Harmonisation regarding the state of internal control in the public sector.
2.2. Further improvement of the public procurement system in the Republic of Serbia. The action should contribute to the capacity building of the staff employed in public procurement at all levels of government, including local self-governments. The intervention should also contribute to the further improvement of electronic public procurement as well as the public procurement system in the area that concerns the prevention and fight against irregularities and corruption.
2.3. Strengthening the legal framework and institutional capacities in the direction of fulfilling the requirements from the accession process concerning the development of the VIES information system. The action will provide assistance in establishing the prerequisites for the phased introduction and development of the VIES system (a system for exchanging data on VAT payers) through the preparation of recommendations for further alignment of national legislation, the preparation of the Strategy for the development of the VIES system and the development of technical specifications for the VIES system.
2.4. Support for the management of the Customs Administration processes. The action should support the Customs Administration in making decisions and managing business processes concerning customs procedures, financial data management, risk analysis, subsequent customs clearance and preparation of an adequate connection with relevant EU systems.
2.5. Support for the establishment of an integrated tariff management system of the Customs Administration. Support for the Customs Administration in aligning the tariff domain with EU standards in the context of the accession process, as well as support in the implementation of the integrated tariff management system. The application of this integrated system represents one of the very important moments in the context of the EU integration process, considering that this system should be connected with DG TAXUD.
Budget: EUR 13.5 million
Management model: indirectly by an international organisation (UNDP)
3. Support for participation in EU programmes through capacity building. The action implies the continuation of EU support in strengthening the capacities of relevant national structures, institutions, as well as potential applicants for efficient and effective management, coordination and implementation of EU programmes in the new 2021–2027 financial perspective. In this way, the number of projects financed from EU programmes would increase.
Budget: EUR 1.5 million
Management model: directly
4. Policy and Legal Advice Centre (PLAC) – The action envisages the continuation of support in the field of alignment and strengthening the capacity of institutions for the implementation and application of regulations that are aligned with the European Union regulations in accordance with the new methodology for EU accession negotiations.
Budget: EUR 1.8 million
Management model: directly
5. Support for the establishment of integrated human resources management in the public administration based on competencies – the establishment of a monitoring and evaluation system and the introduction of modalities for career development will support further implementation of amendments to the Law on Civil Servants; a methodology and a set of indicators will be established that will represent instruments to support the work of analytical capacities.
Budget: EUR 1.5 million
Management model: directly
6. Unallocated funds – foresees support for the implementation of reforms in the field of European integration including support for the preparation of planning and programming documents and infrastructure projects (Project Preparation Facility – PPF).
Budget: EUR 10 million
Management model: direct/indirect for twinning
7. Implementation of evaluations– funds are allocated for the implementation of previous, mid-term and final evaluations based on the approved Evaluation Plan.
Budget: EUR 1.5 million
Management model: directly
ACTION DOCUMENT INCLUSIVE GROWTH
1. Support for improving the public health system for better responses in emergency situations in accordance with EU and international standards. It includes equipping laboratories for processing samples of all types of biomedical threats, equipping health institutions for diagnostics and treatment, improving procedures for the reaction of all levels of health institutions to any kind of threat, improving accompanying psycho-social support services, awareness-raising campaigns about protection measures and the necessary training of personnel in the public health system.
Budget: EUR 12 million
Management model: indirectly with the World Health Organisation and UNDP
ACTION DOCUMENT COMPETITIVENESS AND AGRICULTURE
1. Support for the integration of Serbia into the single market. It includes interventions in the areas of market surveillance, consumer protection, protection of intellectual rights and competition/state aid, as well as the establishment of a single point of contact in the field of service provision. The implementation modality assumes indirect management by the institutions of member states or international partners.
Budget: EUR 8 million
Management model: indirectly with a member state or international organisation
2. Alignment with the new common agricultural policy (CAP) within which the following interventions are foreseen:
2.1 Increased capacities of the ministry responsible for agriculture and rural development and its Paying Agency for processing direct payments, rural development measures within the new CAP and management of market organisation and structural support regarding fisheries. Support for the creation of the first phase of the functional Integrated Management and Control System (IACS) is foreseen through two contracts, technical support and equipment procurement, with a total value of EUR 3,790,000.00. The planned support includes the procurement of IT equipment (hardware) as well as the development of the remaining software components, establishment of a Land Parcel Identification System (LPIS) throughout the territory of the RS, integration of all registers and databases, strengthening of human resources and raising of awareness and knowledge among farmers. In addition, support for Chapter 13 is foreseen through a twinning project with a total value of EUR 250,000.00, which foresees the development of a National Strategic Plan for aquaculture, the preparation of operational programmes for fisheries, as well as the activity of aligning the Law on Structural Support and Market Regulation in Fisheries with the new EU legislation in the field of fisheries.
2.2 Support for further control and eradication of rabies in the Republic of Serbia through vaccination. The action contributes to the general health of animals in RS through the control and eradication of rabies through oral vaccination of wild animals. The total value of the procurement of oral vaccines and the implementation of aerial vaccination is EUR 3,600,000.00.
Budget: EUR 7.64 million
Management model: indirect management
ACTION DOCUMENT GREEN TRANSITION
1. Novi Sad – Regional Centre for Waste Management – The project includes the construction of a sanitary landfill and a transfer station for the collection and sorting of waste. It has two components: works and services and includes the construction, supervision and programme for improving the financial and operational business of the management company.
Budget: EUR 75 million; the EU contribution amounts to EUR 37.5 million;
Management model: indirect management
2. Strengthening the planning and implementation of Chapter 27– Helping the Ministry of Environmental Protection in the EU accession process in the form of drafting a strategic and legal framework in accordance with the EU acquis and implementing all obligations defined in the negotiating position for Chapter 27.
Budget: EUR 2 million
Management model: directly
3. Support for the operational and financial capacities of the Energy Efficiency Fund – The action aims to provide assistance in the organisational functioning of the National Energy Efficiency Fund (Administration for Financing and Encouraging Energy Efficiency), procurement/development of appropriate software, energy audits and technical documentation for energy rehabilitation projects. Through this intervention, conditions in households would be improved, carbon dioxide emissions would be reduced, air quality would be improved and energy costs would be reduced.
Budget: EUR 5 million
Management model: indirectly in cooperation with KfW as the main partner and EBRD
4. Study of the scope of passenger transport in the Republic of Serbia within the Public Service Obligation – The existing elements of the Public Service Obligation Agreement (PSO) do not contain an objective assessment of citizens’ transport needs. This Study will help decision-makers to better define the scope of PSO and the total demand in passenger traffic, thus providing a better quality service and spending budget funds more efficiently.
Budget: EUR 3 million
Management model: directly
5. Support in the implementation of Service Level Agreements (SLA) and further development of Performance Based Maintenance (PBMC) – One of the critical actions of the road sector reform is the improvement of road management through the Service Level Agreement (SLA) between the Government (MCTI) and “Putevi Srbije”. The SLA would define the required level of service and performance of the road network, as well as the sources of funding to achieve the defined level, thus making more efficient use of resources for the maintenance and development of road infrastructure.
Budget: EUR 3 million
Management model: directly
6. Improving the practice of road construction/reconstruction through further development of construction materials following modern engineering and ecological standards – In the Republic of Serbia, there is a need for further alignment of procedures in road traffic and improvement of the road maintenance system. The project aims to contribute to the efficient use of construction materials for the construction, reconstruction and renewal of the road network, with full compliance with environmental standards.
Budget: EUR 1.2 million
Management model: directly
7. Technical assistance to the unit for the implementation of the Belgrade–Niš–Preševo railway corridor project. The project aims to provide assistance in the implementation of the modernisation and reconstruction project of railway corridor X in accordance with EU standards and norms, both in terms of technical and environmental standards, as well as the principles of public procurement, while strengthening the capacity of the Project Implementation Unit within “Infrastruktura železnice Srbije”.
Budget: EUR 2.5 million
Management model: directly
8. Horizontal support for infrastructure projects
Support for the preparation of infrastructure projects (Project Preparation Facility). This activity will continue to support the strengthening of the state administration’s capacity for effective programming of EU funds and management of project preparations at the local and central government levels. The activity will support the preparation of project documentation for projects included in the Single Project Pipeline (SPP) with a focus on the finalisation of technical documentation for the most mature projects selected in the key areas of the SPP.
Budget: EUR 9 million
Management model: directly
IPA 2022
OVERVIEW OF THE ANNUAL 2022 IPA PROGRAMME
The total amount of EU assistance for the implementation of the 2022 IPA Programme is EUR 162,200,000. Below is a description of the actions that are part of the aligned IPA Programme:
WINDOW 1 – RULE OF LAW, FUNDAMENTAL RIGHTS, DEMOCRACY
1. Sector Reform Agreement for judiciary development – EUR 30 million
Beneficiary: Ministry of Justice
The intervention includes sector budget support and complementary support measures. The subject of support is the implementation of the Judicial Development Strategy for the 2020–2025 period, and envisaged activities include strengthening of judicial independence and capacities of relevant judicial institutions (Ministry of Justice, High Judicial Council, State Prosecutorial Council, Supreme Court of Cassation, Republic Public Prosecutor’s Office, and Judicial Academy), transparency and accessibility of judiciary, improvement of its efficiency and the introduction of E-justice.
2. Protection of the rights of internally displaced persons and returnees under readmission agreement – EUR 2 million
Beneficiary: Office for Kosovo and Metohija
A service contract under direct management is envisaged. The intervention includes support to said categories of the population in exercising human and property rights through providing legal aid.
3. Support to preparatory activities in the process of returning internally displaced persons – EUR 1.5 million
Beneficiary: Office for Kosovo and Metohija
Under the arrangement of a direct grant to the Office for Kosovo and Metohija, economic support is envisaged for internally displaced persons in the form of occupational training and providing the necessary equipment for performing economic activities.
4. Strengthening freedom of expression and media freedom – EUR 1.5 million
Beneficiary: Ministry of Culture and Information
Support to the improvement of the overall environment for freedom of expression, full implementation of media laws, independence of institutions and the improvement of media financing and transparency of media ownership is envisaged through service contracts under direct management.
WINDOW 2 – GOOD GOVERNANCE, EU ACQUIS ALIGNMENT, GOOD-NEIGHBOURLY RELATIONS
1. Sector Reform Agreement for public administration reform – EUR 30 million
Beneficiary: Ministry of Public Administration and Local Self-Government
According to the sector budget support (SBS) arrangement, support to the Government of Serbia for public administration reform (PAR) as defined in the new Strategy for the 2021–2030 period, is envisaged as well as complementary support for implementation in the form of service contracts based on the direct management model.
2. Unallocated funds – EUR 5.6 million
Beneficiary: Ministry of European Integration and other institutions
Funds that are used as necessary and allocated in line with the decision of the Working group for unallocated funds and based on the project proposals of competent institutions. The funds will be directed to different types of contracts and interventions, including the PLAC project.
3. Development of a decision-making support system focused on advanced data analytics on the workforce and establishing statistical registry of the population – EUR 7 million
Beneficiary: Statistical Office of the Republic of Serbia (RZS)
The intervention implies connecting public policies with statistical data, particularly in terms of economic situation assessment, statistical support to local decision makers, labour market, training of beneficiaries and data exchange. The implementation arrangement is a direct grant to the Statistical Office of the Republic of Serbia through indirect management.
5. Support for strengthening the capacity of the tax administration – EUR 1.5 million
Beneficiary: Ministry of Finance, Tax Administration
Through the twinning agreement under indirect management, the project involves raising the organisational and administrative capacities of the Tax Administration to perform tasks in accordance with the requirements of the European integration process.
6. Further support for Chapter 12: Food safety, veterinary and phytosanitary policy – EUR 1.8 million
Beneficiary: Ministry of Agriculture, Forestry and Water Management
Support to legislative alignment related to the closing of Chapter 12 is envisaged through a twinning agreement under indirect management. Support is planned for the application of the Law on food safety and for building the capacities of inspection services, as well as activities in the area of veterinary medicine and animal waste management and the pesticide use. Development of the Strategy for upgrading physical infrastructure at border control posts is also foreseen.
WINDOW 3– GREEN AGENDA AND SUSTAINABLE CONNECTIVITY
1. Regional wastewater treatment system in the municipalities of Zlatibor and Moravica districts (Požega, Užice, Arilje, Kosjerić and Ivanjica) – EUR 74.4 million – EUR 39.7 million within IPA 2022
Beneficiary: Ministry of Agriculture, Forestry and Water Management, Republic Water Directorate
Through indirect management, the project envisages investments into the wastewater management system and the construction of wastewater treatment facilities and collectors, which will connect over 100,000 citizens to the sewage system and make this region more attractive for tourists, as the main driver of economic development (particularly in Zlatibor region). In addition to the construction, one of the activities includes increasing the efficiency of public utility companies and the application of the tariff system for the complete coverage of the costs regarding the sustainable operation of the system. The regional project includes five local self-governments: Užice, Požega, Arilje and Kosjerić (in the Zlatibor administrative district) and Ivanjica (in the Moravica administrative district).
2. Separation at the source II stage: Project for biological waste in 5 regions – EUR 14.1 million
Beneficiary: Ministry of Environmental Protection
Through the contract for services and equipment procurement contract in the direct management system, the alignment of environmental protection standards and the promotion and management of waste in accordance with EU requirements are foreseen, especially through home composting, waste separation and composting facilities in 5 waste management regions: Duboko (Užice), Pirot, Pančevo, Srem-Mačva and Subotica.
3. PPF – EUR 10 million
Beneficiary: Ministry of European Integration
The activity will support the preparation of project documentation for capital infrastructure projects. Support will be focused on the areas of infrastructure, environment, transport and energy.
4. Improvement of the strategic framework for nature protection and further implementation of activities related to NATURA 2000 in the Republic of Serbia – EUR 3.5 million
Beneficiary: Ministry of Environmental Protection
Support through a service contract is envisaged for the establishment and management of the NATURA 2000 network, which meets the requirements from Negotiation Chapter 27. In addition to the establishment of the information system, the intervention also provides for the completion of site designation, development and implementation of management plans for environmentally significant areas, as well as plans for the development and management of targeted animal species.
5. Promotion of activities in the area of climate change – EUR 1.5 million
Beneficiary: Office of Prime Minister, Ministry of Environmental Protection, Ministry of European Integration
A service contract is envisaged to support the implementation of the Law on Climate Change for the purpose of establishing a system for monitoring, reporting and checking greenhouse gas emissions, in line with the requirements of relevant EU climate laws and the Paris Agreement, as well as for the purpose of planning and introducing measures for systematic and continuous data collection on greenhouse gas emissions.
6. Promotion of circular economy – EUR 1 million
Beneficiary: Ministry of European Integration and Ministry of Environmental Protection, Chamber of Commerce of Serbia
A service contract for promoting the principles of the circular economy and raising awareness in cooperation with the Ministry of Environmental Protection, the Ministry of European Integration, the Serbian Chamber of Commerce and local self-government units is envisaged.
7. Drafting of the second river basin management plan and strengthening the capacity of institutions involved in water management – EUR 3 million
Beneficiary: Ministry of Agriculture, Forestry and Water Management, Republic Water Directorate
The intervention includes strengthening institutional capacities in river basin planning, coordination between these types of plans, strategies and other relevant policies, as well as participation in the river basin management.
WINDOW 4 – COMPETITIVENESS AND INCLUSIVE GROWTH
1. Cohesive response to ageing and the needs of vulnerable groups through integration of services and establishing partnerships – EUR 2 million
Beneficiary: Ministry of Labour, Employment, Veteran and Social Affairs
Service contract for activities aimed at developing a strategic framework for long-term care and amending existing legislation is envisaged. In parallel, the capacities of national and local decision-makers and service providers will be strengthened.
2. EU support for better working conditions through the strengthening of social dialogue, improvement of public policies and preparation for participation in the EURES network – EUR 4.5 million
Beneficiary: Ministry of Labour, Employment, Veteran and Social Affairs
Support for improving legislation, strengthening capacities, improving occupational health and safety, and support for the National Employment Service and development of occupational standards are envisaged through an agreement on contribution with the International Labour Organisation (ILO). Support is also provided for institutions that enable social dialogue, with a focus on social and economic councils.
3. Complementary measures for IPA 2023 SBS programme for education reform – EUR 2 million – IPA 2022
Beneficiary: Ministry of Education, Science and Technological Development and Ministry of Labour
According to the arrangement of the service contract under direct management, measures of complementary support for the sector budget support proposed for the IPA 2023 programme are foreseen. This contract would cover all related topics for MESTD complementary measures and contribute to capacity building, monitoring, evaluation, policy planning, etc.
IPA 2023
OVERVIEW OF THE ANNUAL IPA PROGRAMME FOR 2023
In order to provide additional direct financial support to the Western Balkan region, at the Summit in Berlin on 3 November 2022, the European Commission announced the implementation of the Energy Support Package with the aim of overcoming current, short-term and medium-term needs in the context of the ongoing energy crisis. The Decision of the European Commission No. C (2022) 9159 of 5 December 2022 approved the financing of the annual action plan, which contributes to the Energy Support Package for the Western Balkans in favour of the Republic of Serbia for the year 2023.
As an assistance measure to the Republic of Serbia, a budget support grant from the IPA III financial perspective (2021–2027) was secured from the annual allocation for 2023 in the amount of EUR 165 million.
A necessary step towards ensuring sectoral budgetary support of the European Union to the Republic of Serbia was for the Ministry of Mining and Energy to prepare a Road Map for energy support in the Republic of Serbia (hereinafter: Road Map), which was jointly prepared by the Ministry of Mining and Energy, Ministry of Finance and Ministry of Economy, and which was adopted by the Government of the Republic of Serbia on 22 December 2022. In order to formalize the decision on financing, the text of the Financial Agreement between Serbia and the European Commission regarding the Annual Action Plan for budgetary support to the energy sector for 2023, which was adopted by the Government of Serbia at its session on 9 February 2023, was agreed upon.
The expected outcomes of the assistance measure to the Republic of Serbia are as follows. Mitigating the immediate and short-term negative impact of the energy crisis, with a special emphasis on subsidies for households for overcoming the increase in energy bills and supporting small and medium-sized enterprises in order to ensure business continuity. Then, the continuation of support for the transition to green energy with steps towards increasing the security of supply and the realisation of significant infrastructure projects. In February 2024, 90% of the funds (EUR 148.5 million) were paid, while the remaining 10% (EUR 16.5 million) will be paid by the end of 2024.
The Ministry of Mining and Energy, in cooperation with the relevant ministries of the Government of Serbia, has continuously been implementing the measures defined in the Road Map for energy support. Regarding subsidies for households for the purpose of overcoming the increase in energy bills, according to the last available cross-section of the balance as of 31 January 2024, the number of households eligible for support for vulnerable households is around 164,000. The intention is to reach 190,000. Regarding the support for small and medium-sized enterprises in order to ensure business continuity, 66,839 business entities – (SMEs) that are eligible to use support measures – have been identified so far. The intention is to reach 70,000, in accordance with the Road Map for energy support.