Direct Heating Systems

Currently in 57 cities and municipalities there are district heating systems and heating plants (i.e. companies whose main activity is the production and distribution of heat). In these cities and municipalities, 20% of households are connected to the district heating system compared to the total number of households in Serbia.

Over 90% of thermal energy production in district heating systems in Serbia is based on the direct use of fossil fuels. It is a process in which the energy of combust fossil fuels is transferred to a large mass of water that transfers heat to system users without the simultaneous generation of electricity or industrial steam. The direct use of fossil fuels accounts for only 15% of district heating production in 27 EU countries.

Fuel switch to biomass in DHC with the financial support of KfW Bank

GIZ DKTI Program provides technical support to Serbian District Heating Companies that are launching projects of fuel switch to biomass for heat production with the financial support of the German Development Bank KfW.

KfW Bank provides favorable loans for six heating plants in Serbia that want to invest in projects of replacement fossil fuels to biomass for heating. The total value of the investments is 27 million euro, of which 20 million euro is a loan with an interest rate of 1.1%, with a repayment period of 20 years and a grace period of 5 years. The German development bank KfW also gives a donation of two million euros and the Government of Switzerland (SECO Fund) a donation of 5 million euros.

Two municipalities in Serbia - Priboj and Mali Zvornik - have already signed contracts for the allocation of funds for installation of the new biomass boilers and renovation of the district heating system. These are trilateral agreements between the German Development Bank KfW, the Ministry of Mines and Energy and the municipality as beneficiaries.

The project in Priboj includes the construction of an 8 MW biomass boiler and a 14 MW total oil boiler. In Mali Zvornik, the project involves the installation of a 1.8 MW biomass boiler and one 5 MW boiler for gas and fuel oil.

Mini grid

GIZ DKTI program provides technical assistance in project implementation for construction of mini gridfor heating public facilities connected to biomass boilers. Such projects are implemented in cooperation with the Office for Public Investment Management of the Republic of Serbia (PIMO).

PIMO is the main implementing partner for the project.  Through PIMO, government budget finances the reconstruction of public facilities and heating systems within their framework, which includes the implementation of biomass boilers. Most often, these aremini grid , where from one source heat is supplied to several public buildings located in the immediate environment.

 With the support of Public Investment Management Office, the projects in Priboj ans Mionica have been implemented, while the completion of project in Despotovac is expected soon.

Individual furances

Around 80% of households in Serbia are not connected to district heating systems, and majority of households are heated in the winter by individual furances. Firewood and coal are most commonly used as fuel for individual furances in households. In addition to room heating, wood is also used in rural areas for cooking.

Almost 70% of the wood on the market is used as wood fuel and more than 40% of households use solid fuels (mainly wood fuel or a combination of wood fuel and coal). In some municipalities, this share reaches as high as 90%. In order to prevent this resource from decaying, increased efficiency of the use of firewood in household is necessery.

As part of the first phase of the GIZ DKTI Program “Development of a Sustainable Bioenergy Market in Serbia” (2014-2017), one of the project components actively addressed the problem of efficient use of firewood in households.

Realised Projects

Pirot – Public Private Partnership

In 2017 Municipality of Priboj realised the project of replacement of old boilers on light fuel oil with new biomass based for heating four schools. Replacement of boilers was financed by private partner, with whom municipality established first PPP-ESCO project for heat delivery in Serbia.

The Municipality of Pirot needed three years to realise idea of heating with biomass, with constant support of GIZ Project Development of Sustainable Bioenergy Market through the whole process of project implementation.

Bearing in mind that light fuel oil is relatively expensive fuels, the introduction of biomass into heating systems has led to significant saving in municipal budget.

After two successfully finished heating seasons, reactions are positive. Within the first heating season energy savings were 30% or 8 million dinars, within the second heating season results were even better and energy savings were 35%  or 9.5 million dinars. It is estimated that energy savings will reach 40% in third heating season and then will maintain that value during project lifetime. Moreover, project improved users’ thermal comfort and significantly reduced GHG emissions, with estimated value of 6,750 tons over the project time life.





                                                         Before and after project realisation – old boilers on light fuel oil (left) and new woodchips boiler (right) in one school in Pirot

New boiler house in Pirot



The opening ceremony of new boiler house on biomass in Priboj, was held in October 2019. Within boiler house two boilers on woodchips with total capacity of 1.8 MW were installed, for heat supply to 5 public buildings: two primary, two secondary schools and children’s dispensary.

The project was funded by the Government of Republic of Serbia, through the Public Investment Management Office of Republic of Serbia. Total value of investment was 126 million dinars. Technical support to the project was provided by GIZ.

This is the second successfully realised project of fuel switch to biomass in heating systems in Priboj. The path toward energy transition in Priboj started in 2016, with installation of the first woody biomass-based boiler with the capacity of  0.9 MW to heat 4 public buildings: school, cultural centre, preschool and municipal building was installed.

Together with project of introduction of biomass in district heating system, Priboj will become the first city in Serbia with decarbonized all heat delivery systems. With this aim, trilateral agreement between City of Priboj, German Development Bank- KfW and Ministry of Mining and Energy was recently signed and then bidding for construction of city district heating system, with total capacity of 8 MW, started.







New boiler house on biomass in Priboj, capacity 1.8 MW