Serbia’s water industry is underdeveloped and capital-intensive, driven primarily by European Union (EU) accession obligations and chronic infrastructure gaps. Over 70% of municipalities lack wastewater treatment plants, and only around 12 to 15% of wastewater is treated nationally. While water supply coverage is relatively high, systems suffer from extreme losses, poor quality, and outdated infrastructure. Substantial donor and international financial institutions (IFI) funding is available, making Serbia a project-rich but procurement-driven market.
Water industry in Serbia
Network assets and needs
Serbia’s water infrastructure includes a large network of dams, reservoirs, treatment facilities and distribution assets that require ongoing modernization and maintenance to meet current and future demand.
Water usage and supply
Water use continues to increase across industrial and municipal systems. Recent trends show rising demand for drinking water supply and higher volumes of urban wastewater, placing additional pressure on existing infrastructure and treatment capacity.
Utility performance
While public water services are widely available, utility performance is constrained by high system losses and limited cost recovery. Retail water tariffs generally do not fully cover operations and maintenance costs, creating long-term sustainability challenges and increasing the need for tariff reform and efficiency improvements.
Treatment and infrastructure gaps
Wastewater treatment capacity remains a significant gap. Many existing facilities operate below design standards, and overall treatment coverage lags behind European benchmarks, highlighting substantial investment needs in wastewater infrastructure.
Water resources
Serbia benefits from extensive surface water resources, largely located within the Danube River Basin. However, water quality concerns and the need to align with European Union environmental and regulatory requirements continue to shape sector priorities.
Key opportunities for Canadian water industries companies in Serbia
- Municipal wastewater treatment plants (WWTPs): design, construction, supervision, and advanced treatment technologies
- Water loss reduction and smart metering: leakage detection, network rehabilitation, digital monitoring
- Industrial wastewater treatment: turnkey and modular solutions for energy, food and beverage, chemical and textile sectors, including odor control
Notable challenges for Canadian water industry companies in Serbia
- Complex public procurement dominated by donor-funded, International Federation of Consulting Engineers (FIDIC)-based tenders
- Weak institutional capacity at municipal utility level
- Strong competition from EU-based engineering and engineering, procurement, and construction (EPC) firms already embedded in IFI programs
Industry highlights
EUR 482 million estimated revenue for Serbia’s water utilities market in 2025
More than 6,000 cubic milimetres of water storage across 28 multipurpose dams and reservoirs
More than 38,600 kilometre water distribution network serving utilities nationwide
4,026 million square metres of industrial water used in Serbia in 2024
85% of the population covered by public water supply systems
14.7% of wastewater receiving at least secondary treatment
Serbia's business landscape
Serbia’s water sector is largely public and utility-driven, with investments aligned to EU environmental directives. Major cities such as Belgrade and Novi Sad are developing large wastewater projects, while smaller municipalities remain at early planning stages.
Financing is not a constraint. Projects are supported by:
- national and local governments
- EU pre-accession funds
- bilateral donors such as:
- Germany’s development bank (KfW)
- the Japan International Cooperation Agency (JICA)
- the Swedish International Development Cooperation Agency (SIDA)
- multilateral lenders including:
- the European Bank for Reconstruction and Development (EBRD)
- the European Investment Bank (EIB)
- the World Bank
Industrial wastewater treatment presents a more accessible entry point for foreign firms due to stronger project execution capacity and simpler financing structures compared to municipal projects.
Summary
Serbia represents a high-need, donor-financed water infrastructure market. There is long-term demand for wastewater treatment, water quality improvement, and network modernization. Given its EU accession trajectory and large investment pipeline, Serbia is well-suited for Canadian companies offering advanced water technologies, engineering services, and industrial wastewater solutions.
Contact us
For more information on the water industry in Serbia, please contact bgradtd@international.gc.ca.