Dragan Varga has spent two decades directing vehicular traffic at the main landfill for the city of Belgrade, the Serbian capital. And he does not mince words when talking about his workplace.
“This is just slightly better than hell,” he says.
The landfill, which sits on the shores of the Danube River, has long been regarded as one of the most toxic in Europe. Rotting garbage routinely leaches into local groundwater and, occasionally, erupts into massive fires that can be smelled in Belgrade, 15 kilometers away. The situation has become so dire that Serbia’s finance minister, a former mayor of Belgrade, called the landfill an ecological “black spot” on all of Eastern Europe.
But that will soon change.
Late last year, crews broke ground on a new waste processing and disposal complex for Belgrade that will be compliant with Serbian standards as well as applicable European Union specifications and standards for landfills and waste processing plants. It will include a plant that converts garbage into electricity and heat, a facility for recycling construction waste, and a new sanitary landfill. Once the work is done, the old landfill, which has piles of trash 70 meters high in places, will be turned into green space.
The project, scheduled to be completed in 2022, is being delivered under a long-term public-private partnership between the City of Belgrade and a private company named Beo Čista Energija, formed by global utility company Suez S.A., the Japanese conglomerate Itochu Corporation, and Marguerite Fund II, a pan-European equity fund. Last year, IFC and MIGA provided the firm with €260 million in financing and guarantees, helping to get construction rolling. The package included financing from the Development Bank of Austria and the Canada-IFC Blended Climate Finance Program. The European Bank for Reconstruction and Development also provided funding. Advisory services for the transaction were implemented in partnership with the governments of Austria, Canada, and Switzerland, and the Rockefeller Foundation.
But the genesis of the deal stretches back more than half a decade. That’s when IFC signed an agreement to help Belgrade explore private sector solutions to its mushrooming waste management problem. IFC staff helped Serbian officials shore up what was then a new law governing public-private partnerships. IFC also worked with the city to design and tender the contract for the new facilities, the first public-private partnership in the country.
That effort falls under what we at IFC call working Upstream. Instead of simply waiting for projects to finance, we collaborate with governments and other development institutions to open up entire industries to private investment. The strategy is part of a push by IFC to find innovative ways of tackling the most pressing issues facing the developing world. In an era when government budgets are stretched thin, this creativity helps direct capital and expertise into projects that make life better for everyday people.
It also allows IFC to develop initiatives with widespread impact — and the waste management facilities outside Belgrade could soon be one of those. Globally, municipalities produce 2 billion tons of garbage a year. Backers believe the new facility, the first project of its kind in an emerging market, could serve as a model for other cities struggling to deal with mounting waste.
