Matteo Colangeli (EBRD): “The Serbian economy will need to adapt and remain competitive in a challenging business environment”

Interview by Biagio Carrano

Green transition and energy efficiency, digitization, industrial transformation in a country affected by depopulation, brain drain and skills shortage: these are not only themes for thoughtful round tables but challenges all the companies and entrepreneurs working in Serbia are facing every day.

We spoke with Matteo Colangeli, Regional Director for Western Balkans at the European Bank for Reconstruction and Development (EBRD) based in Belgrade, to understand how EBRD is operating to improve the business environment, the competitiveness of small and medium enterprises, the promotion of new economic players to develop a dynamic and inclusive economy.  

For more than two years you have been the director for the regional head for Western Balkans at EBRD in Serbia. After Covid and Russian aggression on Ukraine, how has EBRD’s engagement in the area changed? Have new priorities emerged, whether related to the economic development needs of individual countries or the new international scenario?

Our presence in the Western Balkans, and Serbia in particular, has been growing significantly since the economic slowdown caused by the Covid pandemic. This is partly the result of EBRD’s counter-cyclical role – we step up our financings when economic conditions make it harder for commercial lenders to invest – but also driven by the strategic priority that this region represents for the Bank. This year, our business volume in the Western Balkans should hit a record high at more than 1.4bn euros, of which over half is in Serbia. We invest more in this region by a unit of GDP or by population than anywhere else. In terms of emerging priorities, I think the Covid experience clearly demonstrated the importance of reliable digital infrastructure and digital literacy. The energy crises sparked by the war in Ukraine brought to the fore the need to accelerate the energy transition, particularly the development of renewables and reducing energy waste. All these areas are and will continue to be at the core of our work in the Western Balkans over the years ahead.

With EBRD financing, Serbia will expand science and technology parks (STPs) and construct new ones in cities across the country, including Niš, Čačak, Kruševac and Belgrade (in the BIO4 Campus).


The EBRD is fully committed to supporting a double transition in Serbia: the transition to a fully accomplished market economy has been complemented in recent years by the transition to a knowledge-based economy and environmental sustainability. What tools and objectives do you use to achieve this?

We see environmental sustainability, and particularly the energy transition, as key factors in the economic competitiveness of a region like the Western Balkans which is closely tied to the European Union and a major recipient of European foreign direct investment. This makes it imperative in our view for this region to converge towards the standards set out by European environmental and energy policies, including committing to a credible decarbonisation roadmap. A key ingredient of that should be aggressively stepping up the growth of domestic renewable energy production, also as part of a strategy to strengthen energy security and reduce exposure to external shocks and price volatility. In this respect, we are proud of the support we provided to the Ministry of Mining and Energy to launch the first auction for renewables capacities in Serbia, 450MW of wind and solar power as part of a 3-year plan for auctions worth 1300MW. This is in my view an excellent example of how well-designed, transparent, competitive market processes can drive down the price of clean energy for final users. The other aspect of the green transition which in my view is tied to economic competitiveness is narrowing the gap which still remains substantial when it comes to environmental infrastructure. This is important both to enable companies to operate to European standards but also from the perspective of retaining and attracting human capital to the region (for example by tackling the air pollution that affects many of the region’s cities in winter months).

In March 2023 the EBRD approved a financing package of €300 million to help support Serbia’s electricity sector. The funds will be channelled to national electricity utility Elektropriveda Srbije (EPS) to improve its liquidity position. The project will support the government’s strategy to decarbonise the electricity sector, phase out coal by 2050, develop the regulatory framework for the launch of renewable energy auctions and incentivise their roll-out, and ensure both energy security and sustainability of supply. The signing of the loan and guarantee agreements was attended by Minister of Energy Dubravka Djedovic, Minister of Finance Sinisa Mali and EPS General Manager Miroslav Tomašević. On behalf of the EBRD, the agreements were signed by Matteo Colangeli, Director, Regional Head of the Western Balkans, and Grzegorz Zieliński, Director, Head of Energy Europe.

Small and medium-sized enterprises play a central role in the socio-economic evolution of a country. What are EBRD’s programmes in this regard in Serbia?

EBRD is supporting SMEs in Serbia through various programmes combining access to finance and advice, as two equally important aspects of their competitiveness and growth. EBRD’s Advice for Small Businesses Programme has been operating in Serbia for over 16 years supporting thousands of SMEs through tailor-made advisory projects in different areas of business (from strategy development to investment planning, energy efficiency to digital transformation), engaging either local consultants or international experts. In partnership with donors, and primarily the European Union, we run a number of targeted programs combining access to loans through local commercial banks and consulting support. These include, for example, the Women in Business and Youth in Business programs, targeting financial inclusion for underserved segments among Serbian entrepreneurs. When it comes to innovation, we are nurturing the start-up eco-system in the region through a program called Star Venture which makes accessible know-how and contacts to dozens of innovative companies and accelerators. In parallel, we are also proud of the E80 million financing that we extended earlier this year for the expansion of science and technology parks across the country and for the Bio4 biotechnology campus in Belgrade.

Around 150,000 households and 500 schools and public institutions in Serbia’s rural areas will gain access to fast broadband thanks to a government digitalisation initiative supported by the EBRD, the EU and bilateral donors under the umbrella of the Western Balkans Investment Framework (WBIF).

For their part, medium or large enterprises, or those that have already been operating in the country for years, are facing new challenges such as energy efficiency, digitization and environmental impact. How can the EBRD help them?

Resource efficiency, digitalisation and environmental standards are core elements of the competitiveness of any business, both in terms of tapping market opportunities and managing costs. The majority of our financings to local companies and foreign investors in Serbia are for investments in those areas. But it is not just about the money, we also make available to our clients know how to help them make the right investment decisions and to deal with market changes like the ones, for example, that will be brought about by the EU’s Carbon Border Adjustment Mechanism. On a broader level, EBRD invests heavily in the infrastructure upgrades which are needed to strengthen Serbia’s attractiveness as an investment destination. Recent examples include E550M for the Belgrade Nis high-speed rail, nearly E120M to rollout fast internet to rural areas, landmark PPPs like Belgrade airport and the Vinca waste to energy plant, and over E100M for countrywide waste management and irrigation infrastructure.

We have a capital city that, along with Novi Sad, increasingly attracts young people and the rest of Serbia which is losing population and becoming impoverished. What would you propose to address this growing polarization of the country’s growth potential?

This sort of situation is not peculiar to Serbia and is closely linked to the broader emigration and brain drain challenge. When it comes to tackling the internal movement of people to Belgrade and Novi Sad, I think it is essentially a matter of economic opportunity and living standards. Infrastructure development is certainly key, both in terms of making available transport links to conveniently commute to the main cities and of equalising as much as possible the level of healthcare and education available to citizens. Digitalization could also play a big role in reversing the trend in favour of smaller cities and I think in this respect the national broadband rollout program which we are financing can be particularly meaningful. Effective policies when it comes to regional economic development are also important of course. Serbia has been doing very well in recent years in terms of attracting foreign direct investment across the country. The impact on employment has certainly been significant but a similar positive impact in terms of creating local value chains and opportunities for local SMEs would be, in my view, equally critical to stemming internal migration.

The European Bank for Reconstruction and Development (EBRD) has launched its Youth in Business programme in the Western Balkans by extending loans to Banca Intesa Beograd and microfinance institution Mi-Bospo

How could a company that decided to invest in Serbia primarily because of its labour costs rethink its strategies?

If labour costs are rising faster than productivity, as skilled labour becomes scarcer due to demographic factors and emigration, companies have essentially two choices: introducing new technologies and automatizing processes to increase productivity, or importing labour from countries with lower labour costs. We see both trends happening in Serbia and more broadly in Europe. Looking ahead, it will be important for this country not only to continue attracting the substantial volume of foreign direct investment of the last few years but also to increasingly host companies with higher value-added products which are less sensitive to labour cost increases. We see a big role for EBRD to help Serbia on this path, both in terms of financing projects and of creating the conditions for higher value-added investment to succeed, including through working with investors to upskill the labour force.

After the cost of labour, the cost of energy is also set to rise in Serbia. What’s more, the country is facing a rapid change in its energy supply and management model. What impact will this change have on businesses?

The Serbian economy will need to adapt and remain competitive in an environment of higher energy costs. From the perspective of companies, we see many moving to reduce costs and risks by investing in their own solar generation and reducing energy waste. We have a number of programs to support these investments through blended loan and grant finance, as well as advice on optimizing investment decisions. At a systemic level, the impact on companies will be driven by how quickly the transition in the Serbian energy sector will occur. The slower the adjustment to the new environment, the more Serbia (and other Western Balkans countries with mostly coal-based electricity generation) would lose out in lower exports of electricity, steel, and the other products captured under the EU’s Carbon Border Adjustment Mechanism. A faster adjustment with more renewable generation facilities installed as well as the network and balancing capacities improved, however, would mean a more competitive economy and more energy security as well. The cost of renewable energy continues to fall and we are confident that the ongoing EBRD-supported auction for 450MW of wind and solar capacities will deliver attractively priced power for the Serbian economy.

In his book “Food,” Jacques Attali, the first president of the EBRD, says that the best agriculture is that of small and specialized producers. On the other hand, Serbia is still experiencing big delays in its agro-industrial system, especially in terms of the safety and quality of the products themselves. How can EBRD contribute to this area?

Serbia has significant comparative advantages in the agri-food sector but, in order to realise them, it needs coordinated actions from all industry stakeholders. It is especially important to support smaller producers and processors to tap into differentiated markets for traditional and organic food products. With the right support and investment, these producers can sell quality agri-food that is responsibly produced and sourced directly to consumers, shortening supply chains, boosting resilience and raising incomes. EBRD can provide a platform for all stakeholders to join efforts and realise the potential of Serbia’s high-quality food. We have partnered with the Food and Agriculture Organisation of the United Nations (FAO) since 2014 to strengthen food quality standards in Serbia through geographical indications, quality labelling and safety measures across various value chains. Through our substantial network of clients, which includes large local and international investors, we link producers’ associations with processors and retailers, to everyone’s benefit. And, not less importantly, we plan to continue stepping up investments in critical irrigation infrastructure across the country.

Is there an area where Serbia as a whole should invest more, i.e. where it sees potential that has not yet been fully utilized?

The circular economy is still in its initial stage of development in Serbia. A significant proportion of recyclable materials is either landfilled or, since the completion of the Vinca waste-to-energy plant, incinerated. This is mainly due to the lack of proper economic incentives for waste separation and segregated collection at source, leading to the loss of valuable resources. Serbia certainly has significant potential, for example in the utilization of agricultural waste. The key challenge that needs to be addressed by policymakers is to change the attitudes and behaviour of economic actors. In parallel with our heavy investments in waste management infrastructure, EBRD is committed to supporting Serbia in exploiting this untapped potential and creating new and sustainable industrial value chains.

Interview by Biagio Carrano

As of May 2021, Matteo Colangeli has been appointed to the role of Regional Director for Western Balkans at the European Bank for Reconstruction and Development (EBRD), based in Serbia. In his 16 years at EBRD, Matteo held a number of country management and banking positions in HQ, Ukraine, Bulgaria and Albania. Prior to that, he worked in investment banking and consulting with roles in London and Milan. Matteo holds a Master’s degree from the London School of Economics and Political Science.


The European Bank for Reconstruction and Development (EBRD) was founded in 1991 to create a new post-Cold War era in central and eastern Europe. We are now doing more than ever before – across three continents – to further progress towards ‘market-oriented economies and the promotion of private and entrepreneurial initiative’.

The EBRD has invested close to €14.2 billion in the Western Balkans to date, supporting the private sector, financial institutions, as well as energy and infrastructure projects. The Bank is working towards building green, inclusive, and digitalized economies in the region

This post is also available in: Italiano

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