PROGRAM INFORMATION DOCUMENT (PID)
                              CONCEPT STAGE
                                               June 8, 2017
                                               Report No.: AB7908

Operation Name                       Serbia Second Public Expenditure and Public Utilities DPL
Region                               EUROPE AND CENTRAL ASIA
Country                              Serbia
Sector
Operation ID                         P161184
Lending Instrument                   Development Policy Lending
Borrower(s)                          REPUBLIC OF SERBIA
Implementing Agency
Date PID Prepared                    June 8, 2017
Estimated Date of Appraisal          September 12, 2017
Estimated Date of Board              November 15, 2017
Approval
Corporate Review Decision            Following the corporate review, the decision was taken to
                                     proceed with the preparation of the operation.
Other Decision

     Key development issues and rationale for Bank involvement
     The Public Utilities and Public Expenditure (PEPU) DPL is the second in a series of two DPLs.
     The PEPU series is an integral part of the Serbia FY2016-20 CPF Focus Area 1: Economic
     Governance and the role of the state. It is complementary to the ongoing technical assistance in
     energy and transport; the state�owned enterprise DPF series; job creation, employment support;
     and public administration reform operations, such as the Program�for�Results on Modernization
     and Optimization of Public Administration. Implementation support to these reforms is also
     provided from the three�year precautionary International Monetary Fund Stand�By�Arrangement.
     The ongoing EU accession process is also a fundamental anchor for the Government’s reforms.


     Proposed Objective(s)
     The PEPU series supports the Government’s multi�year fiscal consolidation agenda and
     transformation of public enterprises and state�owned companies, with the following development
     objectives: (A) Improve public expenditure management through strengthened public financial
     management and public administration reform; (B) Improve the financial sustainability and
     efficiency of energy sector public enterprises; and (C) Improve the financial sustainability and
     efficiency of transport sector public enterprises and state�owned companies.


     Preliminary Description
     The Prior Actions include the establishment of the central registry of invoices, Decree on the
     Work and Authority of the Budget Inspection, clearance of public-public arrears, unification of
     the job mapping of the employees in health, education and social protection sectors, measures to
     improve financial sustainability of the state-owned utility companies in the electricity, gas and
     transport sectors; these include measures to rationalize staffing, improve investment programs,
     settle arrears and debts, raise cost recovery levels, and improve budgeting for maintenance.
       Poverty and Social Impacts and Environment Aspects


Poverty and Social Impacts

       Some of the DPF prior actions may have adverse distributional and social impacts in the short
       run, including: workforce rightsizing in the EPS and public railways companies, and higher
       electricity tariffs for households. The impact is likely to be limited given that mitigating measures
       are in place, including compensation packages for laid off workers, existing programs of
       employment support and labor regulations, and that the affected workers tend to be in the middle
       and upper quintiles of the income distribution. The targeted Energy Vulnerable Customers
       Program is in effect and appropriately budgeted for, with measures being taken to improve the
       implementation of the program. The rest of the policy actions are not expected to have significant
       distributional impacts. The team is discussing with EPS their action plan to improve gender
       balance in the company, with a view to start implementation in FY18.

Environment Aspects

       The reforms supported by the DPF series are not likely to have significant effects on the
       environment, forests and natural resources.

       Tentative financing

Source:                                                                                      ($m.)
Borrower                                                                                      0.00
International Bank for Reconstruction and Development                                       200.00
Borrower/Recipient
IBRD
Others (specifiy)
                                                                             Total

        Contact point
World Bank
Contact: Ekaterina Vostroknutova
Title: Lead Economist
Tel: (202) 458-2711
Fax:
Email: evostroknutova@worldbank.org
Borrower
Contact:
Title:
Tel:
Email:

       For more information contact:
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