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European Neighbourhood Policy and Enlargement Negotiations (DG NEAR)
  • News article
  • 9 June 2023
  • Directorate-General for Neighbourhood and Enlargement Negotiations
  • 4 min read

The EU disburses €450 million to the Western Balkans partners delivering on the Energy Support Package for the region

The EU disburses €450 million to the Western Balkans partners delivering on the Energy Support Package for the region

In December 2022, during the EU – Western Balkans Summit, when the EU re-confirmed its full and unequivocal commitment to the European Union membership perspective of the Western Balkans, the European Commission announced an unprecedented €1 billion Energy Support Package to mitigate the immediate effects of the energy crisis and accelerate the energy transition in the region in the short- and medium terms. 

As part of this Energy Support Package, between February and May 2023, the European Commission disbursed €450 million, anticipating 90% of the overall €500 million budget support foreseen to alleviate the rapid increase of energy costs for vulnerable families and SMEs, delivering on its commitments. This component, as the first part of the Energy Support Package, was designed based on the specific action plans of the Western Balkan partners outlining how the governments intended to address the energy crisis through a mix of reform and policy measures, as well as direct assistance measures to vulnerable families and small and medium-sized enterprises. 

EU Commissioner for Neighbourhood and Enlargement, Olivér Várhelyi, said:

“The energy crisis is a common challenge for the EU and the Western Balkans. The European Union is the region’s first and most reliable partner. I am happy to report that we have delivered on our promise and that our support is making a real difference for our partners, in particular for vulnerable people, families and SME’s with difficulties to foot the energy bill. We look forward to the implementation of the national energy action plans of the Western Balkans to disburse the rest of the allocated funds.” 

The measures, as outlined in the national action plans by the governments of the Western Balkans, include, along with other areas:

  1. Albania is subsidizing energy prices for households and SMEs, financial aid to vulnerable persons, and diversifying energy sources through new wind and solar investments.
  2. Bosnia and Herzegovina is supporting vulnerable families to mitigate the impact of high energy prices, as well as households and SMEs to improve energy efficiency.
  3. Kosovo is providing financial support to vulnerable households, incentivizing energy savings and increasing the energy efficiency of buildings. 
  4. Montenegro is supporting pensioners and the most vulnerable families affected by increased energy prices and efficiency improvements in households, companies, tourism, and industry.
  5. North Macedonia is also subsidizing household electricity bills, supporting SMEs to maintain business continuity and promoting state investments for energy transition, renewable energy sources, and energy efficiency.
  6. Serbia foresees gradually increasing the number of protected vulnerable households.  

The second part of the package, consisting of the remaining €500 million in grants, is provided to advance the Western Balkans' energy transition, efficiency, and independence in the short- and medium-term. Therefore, we provide financial support to renewable energy, gas, and electricity infrastructure, interconnectors, upgrading district heating, and renovating old infrastructure (e.g., of old blocks of flats, hospitals, and public buildings) projects. 

Addressing the immediate, short-term, and medium-term needs in the Western Balkans in the context of the ongoing energy crisis, the substantial €1 billion energy support package will help the Western Balkans partners in the region to begin decreasing their dependence on Russian fossil fuels, accelerate decarbonisation, and improve the energy security of the region. 

BACKGROUND

At the EU-Western Balkans Summit in Tirana in December 2022, the European Commission put forward an Energy Support Package of €1 billion for the Western Balkans. The package addresses immediate, short-term, and medium-term needs in the region in the context of the energy crisis and is expected to mobilize up to €2.5 billion of total investments, in cooperation with international financial institutions.

The first half of the package consists of €500 million in budget support to the Western Balkans partners to cushion the energy price increase to SMEs and vulnerable households.

90% of the country allocations have been disbursed between February and May 2023, i.e., €450 million.

The remaining €50 million will be made available in early 2024 upon the successful implementation of the Action Plans.

The allocation of the €500 million budget support package:

  1. Albania: €80 million (90% disbursed in May 2023)
  2. Bosnia and Herzegovina: €70 million (90% disbursed in May 2023)
  3. Kosovo: €75 million (90% disbursed in March 2023)
  4. Montenegro: €30 million (90% disbursed in March 2023)
  5. North Macedonia: €80 million (90% disbursed in March 2023)
  6. Serbia: €165 million (90% disbursed in February 2023)

The second part of the package consisting of the remaining €500 million in grants, is provided by the European Commission through the Western Balkans Investment Framework (WBIF) to advance the energy transition and energy independence, to support renewable energy projects, improvements to gas and electricity infrastructure and interconnectors,  to upgrade energy transmission systems, district heating and to improve the energy efficiency of private and public infrastructures (e.g. old blocks of flats, hospitals, public buildings) in the Western Balkans. This amount is expected to generate up to €1.4 billion in investments in the region.