SCHEDULE 1
Program Actions; Availability of Loan Proceeds
Section I. Actions under the Program
The actions taken by the Borrower under the Program include the following:
1. The Borrower has increased transparency in budgetary process by: (i) introduction of tagging of “green” budget expenditures in order to make more transparent information on spending on environment and climate- related activities by enacting amendments to the Budget System Law, Article 35, related to budgetary instructions and Article 79 related to the content of the final account, as evidenced by amendments to the Budget System Law, published in the Borrower’s Official Gazette No. 94/2024, dated November 28, 2024; and (ii) adoption of the annual plan for expansion of the coverage of budget beneficiaries with gender responsive budget, as evidenced by the plan for introduction of the gender responsive budget in 2025, adopted by the Ministry of Finance on March 29, 2024.
2. The Borrower has introduced analysis and estimates of the possible fiscal impact of disasters-related events as the mandatory section of the Fiscal Strategy in order to include that information when assessing the medium- term fiscal framework starting with the 2026 Fiscal Strategy, by amending the Budget System Law, article 27, related to the content of the Fiscal Strategy, as evidenced by amendments to the Budget System Law, published in the Borrower’s Official Gazette No 94/2024, dated November 28, 2024.
3. (i) The Borrower has updated the regulatory framework for the implementation of the second auctions for renewable energy capacities, based on the amended Law on the Use of Renewable Energy Sources, published in the Borrower’s Official Gazette No. 35/2023, dated April 29, 2023, in order to increase renewable energy generation capacities, as evidenced by: 1) decree on the quota in the market premium system for wind farms, published in Borrower’s Official Gazette No. 90/2024, dated November 15, 2024; 2) decree on the quota in the market premium system for solar power plants, published in borrower’s official gazette no. 90/2024, dated November 15, 2024; 3) decision on the maximum offered price for electricity for the needs of auctions in the market premium system, published in Borrower’s Official Gazette No. 90/2024, dated November 15, 2024; and 4) amendments to the decree on market premium and feed in tariff published in Borrower’s Official Gazette No. 90/2024, dated November 15, 2024.
(ii) The Borrower has mandated the Ministry of Mining and Energy to formulate the hydrogen development and usage program in order to decrease GHG emissions in line with the EU Acquis, as evidenced by the amendments to the Energy Law, published in the Borrower’s Official Gazette No. 94/2024, dated November 28, 2024.
4. The Borrower has: (i) enabled implementation of the energy audit methodology as evidenced by the rulebook prescribing the content of the energy audit report according to the categories of the energy audit, published in Borrower’s Official Gazette No. 63/2023, dated July 28, 2023;
(ii) defined the legal framework for eco- design of various energy-related products in order to promote energy efficiency related activities, as evidenced by adopted Set of Rulebooks on the Product Eco- design published in Borrower’s Official Gazette.
5. (i) The Borrower has approved the transformation of the legal form of the power company “Elektroprivreda Srbije” from a public enterprise into a joint-stock company, as evidenced by Government Decision 05 No.023- 3090/2023, dated April 6, 2023, published in Borrower’s Official Gazette No. 27/2023, dated April 7, 2023.
(ii) The Borrower through its Ministry of Environmental Protection has issued first GHG emissions permits to the thermal power, cogeneration and heating plants of the ”Elektroprivreda Srbije” JSC, based on previously approved GHG emission monitoring plans, for the purpose of measurement and reporting of carbon emissions of “Elektroprivreda Srbije” JSC, pursuant to the provisions of the Law on Climate Change, as evidenced by the public list of issued permits, published by the Ministry of Environmental Protection.
6. The Borrower has created a legal and institutional environment to strengthen the economywide monitoring and reporting of GHG emissions, as evidenced by: 1) the rulebook on the content of the GHG inventory, published in Borrower’s Official Gazette No. 55/2023 on July 7, 2023; 2) the decree on types of data, bodies and organizations that submit data, published in Borrower’s Official Gazette No. 43/2023, dated May 5, 2023;
3)the rulebook on monitoring and reporting of GHG emissions that enabled the operationalization of a national MRV IT platform as well as the GHG permitting system (published in Borrower’s Official Gazette No.
118/2023, dated December 28, 2023); and 4) the adoption and publication of the first national inventory of GHG emissions, as evidenced by the Government Decision 05 No. 353-11715/2024-2, dated December 5, 2024.
7. (i) The Borrower has developed a strategic and legislative framework for sludge management in order to align with the EU sludge legislation, as evidenced by: 1) the national sludge management program and action plan, published in the Borrower’s Official Gazette No. 84/2023, dated October 5, 2023, and 2) the decree on sewage sludge management, published in Borrower’s Official Gazette No. 103/2023, November 21, 2023.
(ii) The Borrower has adopted legislation needed for environmentally sound management and increased reuse and recycling rates of the construction waste by adopting the decree on management of construction and demolition waste, published in Borrower’s Official Gazette No. 93/2023, dated October 27, 2023, as corrected pursuant to the corrigendum published in Borrower’s Official Gazette No. 94/2023, dated October 30, 2023.
8. The Borrower has enabled issuance of emission permits through the new online portal by adopting: 1) the rulebook on the application for an integrated pollution prevention and control permit, as published in Borrower’s Official Gazette No. 4/2024, dated January 19, 2024; and 2) the rulebook on the format and content of the application for integrated permit, published in Borrower’s Official Gazette No. 4/2024, dated January 19, 2024.
Section II. Availability of Loan Proceeds
A. General. The Borrower may withdraw the proceeds of the Loan in accordance with the provisions of this Section and such additional instructions as the Bank may specify by notice to the Borrower.
B. Allocation of Loan Amounts. The Loan is allocated in: (a) a single withdrawal tranche, from which the Borrower may make withdrawals of the Loan proceeds; and (b) the amounts requested by the Borrower to pay the Front-end Fee. The allocation of the amounts of the Loan to this end is set out in the table below:
| Allocations | Amount of the Loan
Allocated
(expressed in EUR) |
| (1) Single Withdrawal Tranche | 153,315,750 |
| (2) Front-end Fee | 384,250 |
| TOTAL AMOUNT | 153,700,000 |
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C. Withdrawal Tranche Release Conditions.
No withdrawal shall be made of the Single Withdrawal Tranche unless the Bank is satisfied: (a) with the Program being carried out by the Borrower;
and (b) with the adequacy of the Borrower’s macroeconomic policy framework.
D. Deposit of Loan Amounts.
The Borrower, within thirty (30) days after the withdrawal of the Loan from the Loan Account, shall report to the Bank: (a) the exact sum received into the account referred to in Section 2.03 (a) of the General Conditions; (b) the details of the account to which the Serbian Dinar equivalent of the Loan proceeds will be credited; (c) the record that an equivalent amount has been accounted for in the Borrower’s budget management systems;
and (d) the statement of receipts and disbursement of the account referred to in Section 2.03 (a) of the General Conditions.
E. Closing Date. The Closing Date is March 31, 2026.
SCHEDULE 2
Commitment-Linked Amortization Repayment Schedule
The Borrower shall repay the principal amount of the Loan in accordance with the following table, which sets forth the Principal Payment Dates of the Loan and the percentage of the total principal amount of the Loan payable on each Principal Payment Date (“Installment Share”).
Level Principal Repayments
| Principal Payment Date | Installment Share |
On each April 15 and October 15
Beginning April 15, 2028
through April 15, 2036 | 5.56% |
| On October 15, 2036 | 5.48% |
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APPENDIX
Section I. Definitions
1. “Budget System Law” means he Borrower’s law on the budget system, duly published in the Borrower’s Official Gazette No. 54/09, dated July 17, 2009, as amended pursuant to the amendments published in the Borrower’s Official Gazette: (i) No. 73/10, dated October 12, 2010; (ii) No. 101/10, dated December 29, 2010; (iii) No. 101/11, dated December 30, 2011; (iv) No. 93/12, dated September 28, 2012; (v) No. 62/13, date July 16, 2013; (vi) No. 63/13, dated July 19, 2013 (corrigendum); (vii) No. 108/13, dated December 6, 2013; (viii) No. 142/14, dated December 25, 2014; (ix) No. 68/15, dated August 4, 2015 (other law); (x) No. 103/15, dated December 14, 2015; (xi) No. 99/16, dated December 12, 2016; (xii) No. 113/17, dated December 17, 2017; (xiii) No. 95/18, dated December 8, 2018; (xiv) No. 31/19, dated April 29, 2019; (xv) No. 72/19, dated October 7, 2019; (xvi) No. 149/20, dated December 11, 2020; (xvii) No. 118/21, dated December 9, 2021; (xviii) No. 118/21, dated December 9, 2021 (other law); (xix) No. 138/22, dated December 12, 2022; (xx) No. 92/23, dated October 27, 2023; and (xxi) No. 94/24, dated November 28, 2024.
2. “Elektroprivreda Srbije” or “Elektroprivreda Srbije, JSC” means the Borrower’s national power utility company registered at the Borrower’s business registers agency under identification number 20053658, and any successor thereto.
3. “Energy Law” means the Borrower’s law on energy, duly published in the Borrower’s Official Gazette No. 145/14, dated December 29, 2014, as amended pursuant to the amendments published in the Borrower’s Official Gazette: (i) 95/18, dated December 8, 2018 (other law); (ii) 40/21, dated April 22, 2021; (iii) 35/23, dated April 29, 2023; (iv) No. 62/23, dated July 27, 2023; and (v) No. 94/24, dated November 28, 2024
4. “EU” means European Union.
5. “EU Acquis” means the collection of common rights and obligations that constitute the body of EU law, that is incorporated into the legal systems of EU member states.
6. “Fiscal Strategy” the document of the government of the Borrower that pursuant to the Budget System Law, states the fiscal policy goals and is submitted annually to the Borrower’s legislature.
7. “General Conditions” means the “International Bank for Reconstruction and Development General Conditions for IBRD Financing, Development Policy Financing”, dated December 14, 2018 (Last revised on July 15, 2023), with the modifications set forth in Section II of this Appendix.
8. “GHG” means greenhouse gases.
9. “Joint Stock Company” and the acronym “JSC” mean a legal form of a company referred to in Part 3, Chapter 4 of the Borrower’s Companies law (the Borrower’s Official Gazette nos. 36 of 27 May 2011, 99 of 27 December 2011, 83 of 5 August 2014 - other law, 5 of 20 January 2015, 44 of 8 June 2018, 95 of 8 December 2018, 91 of 24 December 2019 and 109 of 19 November 2021).
10. “Law on Climate Change” the Borrower’s law on climate change duly published in the Borrower’s Official Gazette No. 26/21 of 23 March 2021.
11. “Law on the Use of Renewable Energy Sources” means the Borrower’s law on the use of renewable energy sources duly published in the Borrower’s Official Gazette No. 40/2021, dated April 22, 2021, as amended pursuant to the amendments published in the Borrower’s Official Gazette: (i) No. 35/23, dated April 29, 2023; and (ii) No. 94/24, dated November 28, 2024.
12. “Ministry of Mining and Energy” means the Borrower’s ministry responsible for energy and the successor thereto.
13. “Ministry of Environmental Protection” means the Borrower’s ministry responsible for environment and the successor thereto.
14. “Ministry of Finance” means the Borrower’s ministry responsible for finance and the successor thereto.
15. “MRV IT platform” means the information technology tool and related systems to enable the monitoring, reporting and verification of GHG emissions.
16. “Program” means: the program of objectives, policies, and actions set forth or referred to in the letter - dated January 17, 2025 - from the Borrower to the Bank declaring the Borrower’s commitment to the execution of the Program, and requesting assistance from the Bank in support of the Program during its execution and comprising actions taken, including those set forth in Section I of Schedule 1 to this Agreement, and actions to be taken consistent with the program’s objectives.
17. “Serbian Dinar” means the Borrower’s lawful currency.
18. “Set of Rulebooks on the Product Eco-design” means the following rulebooks on eco-design adopted by the Borrower: (a) rulebook on eco- design requirements for simple set top boxes (Borrower’s Official Gazette No. 45/23 of 4 August 2023); (b) rulebook on eco-design requirements for standby and off mode, and networked standby, electric power consumption of electrical and electronic household and office equipment (Borrower’s Official Gazette No. 45/23 of 4 August 2023); (c) rulebook on eco-design requirements for solid fuel boilers (Borrower’s Official Gazette No. 120/23 of 29 December 2023); (d) rulebook on eco-design requirements for solid fuel local space heaters (Borrower’s Official Gazette No. 117/23 of 27 December 2023); (e) rulebook on eco-design requirements for power transformers (Borrower’s Official Gazette No. 6/24 of 26 January 2024); (f) rulebook on eco-design requirements for domestic ovens, hobs and range hoods (Borrower’s Official Gazette No. 11/24 of 14 February 2024); (g) rulebook on eco- design requirements for air conditioners and comfort fans (Borrower’s Official Gazette No. 11/24 of 14 February 2024); (h) rulebook on eco-design requirements for local space heaters (Borrower’s Official Gazette No. 47/24 of 24 May 2024); and (i) rulebook on eco-design requirements for vacuum cleaners (Borrower’s Official Gazette No. 77/24 of 20 September 2024).
19. “Signature Date” means the later of the two dates on which the Borrower and the Bank signed this Agreement and such definition applies to all references to “the date of the Loan Agreement” in the General Conditions.
20. “Single Withdrawal Tranche” means the amount of the Loan allocated to the category entitled “Single Withdrawal Tranche” in the table set forth in Part B of Section II of Schedule 1 to this Agreement.
Section II. Modifications to the General Conditions
The General Conditions are hereby modified as follows:
1. Section 3.01 (Front-end Fee; Commitment Charge; Exposure
Surcharge) is modified to read as follows:
“Section 3.01. Front-end Fee; Commitment Charge
(a)The Borrower shall pay the Bank a Front-end Fee on the Loan amount at the rate specified in the Loan Agreement. Except as otherwise provided in Section 2.05 (b), the Borrower shall pay the Front-end Fee not later than sixty (60) days after the Effective Date.
(b)The Borrower shall pay the Bank a Commitment Charge on the Unwithdrawn Loan Balance at the rate specified in the Loan Agreement.
The Commitment Charge shall accrue from a date sixty (60) days after the date of the Loan Agreement to the respective dates on which amounts are withdrawn by the Borrower from the Loan Account or cancelled.
Except as otherwise provided in Section 2.05 (c), the Borrower shall pay the Commitment Charge semi-annually in arrears on each Payment Date.”
2. Section 3.04 (Prepayment) is modified to read as follows:
“Section 3.04. Prepayment
(a)After giving not less than forty-five (45) days' notice to the Bank, the Borrower may repay the Bank the following amounts in advance of maturity, as of a date acceptable to the Bank (provided that the Borrower has paid all Loan Payments due as at such date): (i) the entire Withdrawn Loan Balance as at such date; or (ii) the entire principal amount of any one or more maturities of the Loan. Any partial prepayment of the Withdrawn Loan Balance shall be applied in the manner specified by the Borrower, or in the absence of any specification by the Borrower, in the following manner: (A) if the Loan Agreement provides for the separate amortization of specified Disbursed Amounts of the principal of the Loan the prepayment shall be applied in the inverse order of such Disbursed Amounts, with the Disbursed Amount which has been withdrawn last being repaid first and with the latest maturity of said Disbursed Amount being repaid first; and (B) in all other cases, the prepayment shall be applied in the inverse order of the Loan maturities, with the latest maturity being repaid first.
(b)If, in respect of any amount of the Loan to be prepaid, a Conversion has been effected and the Conversion Period has not terminated at the time of prepayment, the provisions of Section 4.06 shall apply.”
3. In paragraphs originally numbered 73, 79 of the Appendix, the terms “Loan Payment”, “Payment Date” and “Variable Spread”, respectively are modified to read as follows:
“73. “Loan Payment” means any amount payable by the Loan Parties to the Bank pursuant to the Legal Agreements, including (but not limited to) any amount of the Withdrawn Loan Balance, interest, the Front-end Fee, the Commitment Charge, interest at the Default Interest Rate (if any), any surcharge, any transaction fee for a Conversion or early termination of a Conversion, any premium payable upon the establishment of an Interest Rate Cap or Interest Rate Collar, and any Unwinding Amount payable by the Borrower.”
“79. “Payment Date” means each date specified in the Loan Agreement occurring on or after the date of the Loan Agreement on which interest, Commitment Charge and other Loan charges and fees (other than the Front-end Fee) are payable, as applicable.”
4. The definitions in paragraphs 4 (Allocated Excess Exposure Amount); 51 (Exposure Surcharge); 93 (Standard Exposure Limit) and 99 (Total Exposure) in the Appendix are all deleted in their entirety and the remaining definitions and paragraphs (as the case may be) renumbered accordingly.