Catalyzing Environmental Finance for Low-Carbon Urban Development


Due to a long period of neglect and under-investment, urban infrastructure in Bosnia and Herzegovina (BiH), public and residential buildings, energy systems and utilities, waste management and transport, require expansion and modernization. From a global environmental standpoint, this situation contributes to a steady increase in greenhouse gases (GHG) emissions, primarily associated with the energy use in public facilities. 

Public buildings in local governments are the largest energy users and sources of GHG emissions in BiH. Therefore, modernization, upgrade and expansion of these public buildings, their infrastructure and services will improve the quality of urban life and achieve a range of important environmental and sustainable development benefits in the country and globally.

To enable such transformational shift, the project Catalyzing Environmental Finance for Low-Carbon Urban Development (URBANLED) provides technical support in the implementation of technically and economically feasible low-carbon solutions in key urban sectors, as well as promotes their wider uptake by local governments and private sector in BiH through dedicated financial mechanisms.

URBANLED project objective

Strives to leverage investment for a transformational shift towards low-carbon urban development in Bosnia and Herzegovina, thereby promoting safer, cleaner and healthier cities, and reducing urban GHG emissions.


Project components

The project aims to remove barriers associated with inadequate access to finance, local capacity, policy and regulatory framework for Low-carbon Urban Development Concept (LCUD), through the following components:

C1: Support key environmental finance institutions to establish Innovative financing mechanism for implementation of LCUD,

C2 & C3: Work with relevant local governments to help build their capacity to identify, implement and monitor low-carbon projects in key urban GHG-emitting sectors, public facilities and utilities, as well as in waste management and logistics/transport,

C4: Work with relevant authorities at the state and entity level to design and adopt policies and regulations to enable the scale-up of low-carbon investment, and 

C4: Conduct awareness raising and an advocacy campaign to secure public support and promote behavioral changes towards low-carbon urban living.

URBANLED project components

Expected results

✔ Innovative Financing Mechanism for Implementation of Low-Carbon Urban Development Concept (LCUD)

  • Established financial mechanism (ESCO Funding window) in Environmental Funds and capitalized with their own funds.
  • Trained at least 40 employees of relevant institutions in innovative finance options for LCUD, and at least 100 representatives of relevant SMEs informed about the ESCO-support mechanism.
  • Established contractual and implementation arrangements for repayment mechanism. 
  • Established Measurement, Reporting and Verification (MRV) for the implementation of ESCO-support mechanism.
  • Developed regulations for polluter pays principle.

✔ Low-carbon public facilities and utilities

  • Expanded EMIS to all types of public facilities and resources used in public utilities.
  • Trained and equipped 1,500 staff in local governments for EMIS application.
  • Implemented 45 LCUD investment projects in public facilities and utilities.
  • Prepared at least 15 SECAPs and other relevant planning documents in local governments, to scale-up piloted investment.

✔ Low-carbon waste management

  • Developed, institutionalized and legally recognized MRV system for the waste sector. 
  • Trained and equipped 45 managers in local governments and 10 employees of Environmental Fund and the Ministry of Environment, with skills and tools to improve and monitor waste management system.
  • Introduced reformed waste fee system.
  • Designed and piloted Green logistic scheme for waste recycling in eight local governments.

✔ National and sector policies, institutional coordination and awareness raising on LCUD

  • Developed and enacted harmonized rules and regulations related to energy and the environment across BiH.
  • Conducted national awareness–raising campaign conducted, which reached at least 750,000 citizens in urban areas.

Achieved results

  • Selected 17 local governments, utility companies and cantons for the implementation of LCUD investment projects and eight municipalities/cities for the implementation of green logistics schemes for waste recycling (two with entity funds for environmental protection);

  • Facilitated investments in 30 LCUD investment projects in the amount of USD 30 million with a direct emission reduction of 30,000 tCO2eq during the lifetime of the investments and over 100,000 project beneficiaries including 50.25% women;

  • Integrated ESCO into the Rulebook on income tax in FBiH, introduced accounting and bookkeeping standards for ESCO projects in FBiH and RS, established contractual and implementation arrangements for the repayment mechanism;

  • Held trainings for 38 local governments, 40 representatives of public institutions and 60 companies in Vitez, Sarajevo, Mostar, Banja Luka, Bijeljina and Doboj, online ESCO educational and information campaigns for more than 250,000 companies, 40 one-on-one meetings with companies about potentials of ESCO markets, and info sessions for chambers of commerce at state and entity level;

  • Developed MRV protocol for ESCO projects;

  • 3,800 public and communal facilities covered by EMIS at the local government level;

  • 500 people trained in energy management, design and implementation of LCUD projects;

  • Developed and operationalized the Waste Management System (WMS) for FBiH, and trained 45 institutional representatives on skills and tools for improving and monitoring the WMS;

  • Developed relevant LCUD rules and regulations: Strategic document for coordinated strategic decision-making on energy efficiency policies at the state level, Rulebook for conducting energy audits for utility companies (public lighting, water, district heating, waste management, etc.) in FBiH, SECAP for 42 local governments, Amendments to the Law on Waste Management of the Republika Srpska, Conceptual model of waste management in the Banja Luka region, Analysis of environmental fees in FBiH and RS with recommendations for the introduction of the "polluter pays" principle, FBiH Air Protection Law, Rulebook on Greenhouse Gas Inventory in FBiH, Regulation on Environmental Impact Assessment in FBiH, Rulebook on Issuing Environmental Permits in FBiH, Plan for Introducing the "Polluter Pays" Principle, Method and Methodology to Unambiguously Determine the Existence of Air Pollution, Law on Climate Change in RS, Report Form within the country and guidelines for reporting on SECAP progress;

  • LCUD awareness campaign reached 596,262 people, including 58% women, through social and traditional media.



2018 - 2024


Global Environment Facility (GEF) 


USD 2,370.000

Main partners:

Ministry of Foreign Trade and Economic Relations of BiH, Ministry of Spatial Planning, Civil Engineering and Ecology of Republika Srpska, Ministry of Environment and Tourism of FBiH, Environmental Fund of FBiH, Environmental Protection and Energy Efficiency Fund of Republika Srpska.