Scoping study to structure a green and social oriented program for the Development Fund of the Republic of Serbia

AFD is planning to appraise a sovereign loan to DFS (through the Ministry of Finance and the Ministry of Economy of the Republic of Serbia) by mid-2024. The project is to help speed up the implementation of Serbia's Green Agenda by supporting the deployment of a sustainable finance window to support investments by Serbian economic players in line with the challenges of ecological and inclusive transition. In line with this framework and the request made by the DFS, the specific objectives of this project are as follows: 1. To support the DFS's loan portfolio in order to deploy a green finance window in line with the objectives of the Green Agenda, via a credit line, targeting: - The SME-SMI segment; - Women's entrepreneurship; and - Potentially, the municipal financing segment. 2. To support the DFS's transformational agenda, via a major technical assistance component supplementing the credit line, covering in particular: - In the short term, building the capacity of DFS teams in green finance; and - In the medium term, at institutional level, the transformation of the DFS into a development bank, which would also deal with the important segment of municipal financing. In order to support the appraisal of the project, it is proposed to launch a feasibility study with the following three objectives: 1. Initial review of the governance and financial situation of DFS; 2. Assessment of the market potential for green and social investments (inter alia: energy efficiency, renewable energies, gender) in order to calibrate the amount, sectoral scope and eligibility criteria of the credit line accordingly; 3. Project design based on the recommendations of the initial diagnosis, including drafting of terms of reference for relevant technical assistance activities.