Port Infrastructure

Port Infrastructure

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Port Infrastructure

Country
Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Infrastructure
Sub Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Infrastructure
Indicative Return
Describes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
< 5% (in ROI)
Investment Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Long Term (10+ years)
Market Size
Describes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
USD 100 million - USD 1 billion
Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.
> USD 10 million
Direct Impact
Describes the primary SDG(s) the IOA addresses.
Industry, Innovation and Infrastructure (SDG 9) Good health and well-being (SDG 3) Decent Work and Economic Growth (SDG 8)
Indirect Impact
Describes the secondary SDG(s) the IOA addresses.
Clean water and sanitation (SDG 6) Life Below Water (SDG 14) Climate Action (SDG 13)

Business Model Description

Finance, design, construct, and operate river port infrastructure through a Public-Private Partnership (PPP), targeting both goods and people. The government owns the port land and assets but grants a concession to a private sector entity to finance, construct, and operate the port facility for a specified period of time. The private sector entity finances the project, including construction costs, and operate the port facility for the concession period. In return, the private sector entity receives a share of the revenue generated by the port, such as through port fees or lease payments.

Expected Impact

Improve transportation of goods and people with lower environmental impact, reduce logistical inefficiencies, and boost economic productivity.

How is this information gathered?

Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.

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Country & Regions

Explore the country and target locations of the investment opportunity.
Country
Region
  • Serbia: Vojvodina Autonomous Province
  • Serbia: Belgrade Region
  • Serbia: Southern and Eastern Serbia
Learn more

Sector Classification

Situate the investment opportunity within sustainability focused sector, subsector and industry classifications.
Sector

Infrastructure

Development need
Progress towards target SDG 9.1 indicates contradictory trends. Progress is made in road and air transport, and movement away from the target in rail, pipeline, and inland waterway transport. Concerning target SDG 11.6, a decrease in the municipal waste recycling rate is registered (2). The poor state of water infrastructure is identified (3).

Policy priority
The aim of the high-level policy Spatial Plan of Serbia (2021-2031) is better accessibility of traffic, infrastructural, social and communal services, and integrated infrastructure; higher quality of life; economic development and functioning of all/critical activities based on sustainability, circular development and mitigating the impact of climate challenges (4).

Gender inequalities and marginalization issues
About 70% of Roma men and women in the Republic of Serbia live in spatially and socially segregated settlements, in deplorable and inadequate living conditions, and without access to basic infrastructure. The majority of homeless people are women over 65 years old, and about 31% are Roma men and women. Young LGBT* people who mostly live in families that do not approve of their sexual orientation also encounter difficulties, and young people increasingly end up homeless after "outing" (5).

Investment opportunities introduction
Policies of Serbia are focused on the implementation of traffic networks, reconstruction and development of infrastructure; increase in electricity generation and lift energy efficiency (4). 4 billion EUR are planned to be invested in reconstructing the railway infrastructure (7). Renovation of rural infrastructure for 70 million EUR is planned (8).

Key bottlenecks introduction
The age and inefficiency of the transmission and distribution power grid and facilities and the quality of trade and transport-related infrastructure show a decreasing trend (3, 6). Only few local governments have waste collection centers ("recycling yards") (1).

Sub Sector

Infrastructure

Development need
Serbia needs significant upgrades in transportation, water and wastewater infrastructure, and energy to modernize its outdated and neglected infrastructure due to a lack of investment and the aftermath of conflicts. The country has invested in renewable energy sources, but much work remains to modernize the energy infrastructure (17).

Policy priority
Low fuel emissions, energy efficiency, better multimodal transport, new technologies, the concept of a single European traffic area, and integrating all modes of transportation to achieve a more efficient, sustainable, competitive, and accessible transport system are the among Serbia's infrastructure priorities (3).

Gender inequalities and marginalization issues
Poor infrastructure in rural areas results in social exclusion of rural women. Аbout 5,000 Roma families, about 25,000 people, do not have drinking water, nor can they carry out basic hygiene measures (6).

Investment opportunities introduction
Important geographical position and considerable available resources on inland waterways; rationalization of transport and use of advantages of all modes of transport are among the top investment opportunities within the infrastructure subsector (4).

Key bottlenecks introduction
Illegally built residential buildings make up 47.24% of the total number of residential buildings (3). Furthermore, there is a dominance of underdeveloped areas with over 120 Local Governments of below-average development, especially in demographically depleted areas (4).

Industry

Engineering and Construction Services

Pipeline Opportunity

Discover the investment opportunity and its corresponding business model.
Investment Opportunity Area

Port Infrastructure

Business Model

Finance, design, construct, and operate river port infrastructure through a Public-Private Partnership (PPP), targeting both goods and people. The government owns the port land and assets but grants a concession to a private sector entity to finance, construct, and operate the port facility for a specified period of time. The private sector entity finances the project, including construction costs, and operate the port facility for the concession period. In return, the private sector entity receives a share of the revenue generated by the port, such as through port fees or lease payments.

Business Case

Learn about the investment opportunity’s business metrics and market risks.

Market Size and Environment

Market Size (USD)
Describes the value in USD of a potential addressable market of the IOA.

USD 100 million - USD 1 billion

The Serbian government plans to invest USD 550 million in environmental remediation and ordnance-removal projects in the Danube River basin. They will also construct a new port in Belgrade by the end of 2023 and upgrade the Smederevo Port terminal with an investment of USD 106 million, with more than half going toward port infrastructure (34).

Serbia's Port Management Agency handled 15.95 million tons of transhipped cargo on rivers in 2021, down 3.2% from 2020. The aim is to transport 20 million tons by 2025. In 2021, business income was USD 62 million, revenue of USD 54 million from river traffic, USD 53 million from cargo traffic, and USD 30.7 million from foreign exchange (41, 42, 43).

Indicative Return

ROI
Describes an expected return from the IOA investment over its lifetime.

< 5%

Due to the higher initial investments, the return period from the investment in port infrastructure is more than 25 years, which makes up the return of investment below 5% (18).

Investment Timeframe

Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.

Long Term (10+ years)

With an ROI below 5%, the expected payback period is over 10 years, more precisely over 25 years based on stakeholder consultations (18).

Ticket Size

Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.

> USD 10 million

Market Risks & Scale Obstacles

Market - Volatile

Port infrastructure projects face the risk of changes in financial conditions during the project's duration, changes in legal and tax requirements, changes in the domain of demand, and market prices for the construction of concrete infrastructure, i.e. fees for services provided (9).

Capital - CapEx Intensive

Due to the character and high capital intensity of the projects, and their strategic importance for the economic development of the local and national economy, improving the port system requires an evaluation of multiple project financing mechanisms (9).

Impact Case

Read about impact metrics and social and environmental risks of the investment opportunity.

Sustainable Development Need

Serbia ranks 113th out of 137 countries in terms of the quality of its port infrastructure (28). In other countries, freight transportation by water traffic accounts for 15% of the total traffic. In Serbia, it is only 7% to 10% (33).

Ports in Serbia are characterized by a relatively poor state of port infrastructure, while the port superstructure is outdated, which is why transshipment operations are of low quality. In the ports and docks of Serbia, the turnover of intermodal units is negligible (9).

Waterway downstream from Prahovo port narrows to 180 meters, with ships narrowing it to 100 meters. It is unexplored and marked white on maps. It is necessary to strive to establish waterways with the simultaneous development of the river fleet and reconstruction (32, 31).

Gender & Marginalisation

Water transport in Serbia is mainly limited to the transport of gravel, sand, and grain by barges. The low quality of water traffic makes the population use other ways of transportation that are more expensive. Due to that, there is limited connectivity between urban and rural areas (33).

Expected Development Outcome

Upgraded port infrastructure preserves roads and the environment, and enhances the transportation of especially good with anticipated savings (33).

The development of port infrastructure leads to the further development of waterways and the river fleet, together with infrastructure reconstruction and construction (31).

Port infrastructure significantly improves transportation and connectivity, both within a country and internationally. Ports allow for faster and more efficient movement of goods and people (19).

Gender & Marginalisation

Developing port infrastructure creates new job opportunities for marginalized groups such as low-skilled workers. This can lead to improved economic conditions and social mobility (18).

Port infrastructure is more accessible to the low-income population due to higher profitability of river transport compared to other models of transport (33).

As a majority of the workforce in the tourism, services, and creative industries, women can benefit from increased port infrastructure and waterway transport in terms of the potential for local communities to increase income and benefit from tourism in general.

Primary SDGs addressed

Industry, Innovation and Infrastructure (SDG 9)
9 - Industry, Innovation and Infrastructure

9.1.2 Passenger and freight volumes, by mode of transport

Current Value

1,883 tonne-kilometres of freight volume (inland waterway transport) (2021) (35).

Target Value

N/A

Good health and well-being (SDG 3)
3 - Good Health and Well-Being

3.6.1 Death rate due to road traffic injuries

Current Value

7.5 deaths per 100,000 population (2019) (36).

Target Value

N/A

Decent Work and Economic Growth (SDG 8)
8 - Decent Work and Economic Growth

8.1.1 Annual growth rate of real GDP per capita

Current Value

8.6% (2021) (44).

Target Value

N/A

Secondary SDGs addressed

Clean water and sanitation (SDG 6)
6 - Clean water and sanitation
Life Below Water (SDG 14)
14 - Life Below Water
Climate Action (SDG 13)
13 - Climate Action

Directly impacted stakeholders

People

Local communities and residents, employees, tourists, and travellers benefit from increased waterway transport and the possibility of trade more profitably due to improved river port infrastructure.

Gender inequality and/or marginalization

People and residents from marginalized groups benefit from greater connectivity, transportation opportunities and employment opportunities.

Planet

The environment benefits from constructing port infrastructure, leading to higher waterway transport using less fuel.

Corporates

Businesses and organizations benefit from the infrastructure for their operations, resulting in increased income.

Public sector

The local and regional governments benefit from the infrastructure development, which affects the country's economic growth and attracts foreign direct investment.

Indirectly impacted stakeholders

People

People: Other communities and residents may be affected by changes in transportation and accessibility brought by the infrastructure, employees in planning, regulating, and managing logistics.

Corporates

Private sector companies involved in constructing, operating, and maintaining the infrastructure and financial institutions benefit from increased business opportunities leading to income growth.

Public sector

Government and public authorities responsible for planning, regulating, and managing the infrastructure benefit from better connection and trade of goods through waterways, which leads to the country's higher economic growth.

Outcome Risks

Ports infrastructure may significantly impact marine ecosystems, mainly by discharging pollutants and disturbing habitats (22).

Port infrastructure may lead to navigation dependence on hydrometeorological conditions (challenging in the period of low water levels) and the appearance of "bottlenecks" in the transport of goods (22).

Impact Risks

Serbia's ports are vulnerable to shifts in demand, changing trade patterns, and economic downturns. The competition from other ports in the region can limit the impact of port infrastructure (18).

Impact Classification

B—Benefit Stakeholders

What

Investment in the port infrastructure can boost the economy, create jobs, improve transportation, and reduce fuel consumption.

Risk

Port infrastructure may get affected by changes in demand, changing trade patterns, and economic downturns, as much as competition from other ports.

Impact Thesis

Improve transportation of goods and people with lower environmental impact, reduce logistical inefficiencies, and boost economic productivity.

Enabling Environment

Explore policy, regulatory and financial factors relevant for the investment opportunity.

Policy Environment

Strategy for the Development of Railway, Road, Water, Air, and Intermodal Transport in the Republic of Serbia, 2007 sets out the government's vision for developing of the country's transport infrastructure, including ports (21).

Strategy for Developing Water Transport in the Republic of Serbia, 2014 aims to plan, regulate, and manage water transport development and infrastructure of ports (22).

Tourism Development Strategy of the Republic of Serbia, 2016 aims to promote the country as a tourist destination, one of which focuses on improving port infrastructure (23).

The National Strategy for Environmental Protection in Serbia, 2010 sets out the government's goals and plans for protecting the country's natural environment, including regulations on the environmental impact of infrastructure development (24).

The Spatial Development Program of the Republic of Serbia, 2021 aims to promote balanced development across the country, including in the regions where ports are located and reconstruction of ports (4).

Financial Environment

Financial incentives: The maximum amount of funds allowed by regulation for investments >USD 52 million cannot exceed 25% of the justified costs. For investments >USD 105 million, the limit is 17% of the expenses justified (14).

Fiscal incentives: The Ministry offers financing of the project depending on the level of development of the Local Self-Government Unit: up to 100% of the value of the project without value added tax for the IV and III level of development; Up to 60% for II and I stage of development (13).

Other incentives: Foreign investors in Serbia receive the same treatment as locals and free profit/capital transfer. Bilateral Investment Treaties provide further protection (20). Serbia is a member of CEFTA, providing market access and regulatory harmonization opportunities (30).

Regulatory Environment

The Spatial Development Program of the Republic of Serbia, 2021 aims to promote balanced development across the country, including in the regions where ports are located and reconstruction of ports (4).

The Law on Environmental Protection, no. 76 and 95, 2018 sets out the requirements for environmental impact assessments and the mitigation of adverse environmental impacts for infrastructure development (26).

The Law on Public Procurement, no. 91, 2019: regulates the process for awarding contracts for public works projects, including port infrastructure development (27).

The Law on navigation and Ports on inland waters, no.18, 2015 regulates the conditions and methods for safe navigation on internal waters of the Republic of Serbia, waterways and navigation, vessels and their ability to navigate, crew, search and rescue, ports and docks (29).

The Law on navigation and Ports on inland waters, no.18, 2015 regulates the conditions and methods for safe navigation on internal waters of the Republic of Serbia, waterways and navigation, vessels and their ability to navigate, crew, search and rescue, ports and docks (29).

The Law on Water, no.95/2018, regulates the legal status of water, integral water management, management of water facilities and land, sources, and methods of financing water activity, supervision over the implementation of this law, and other issues vital for water management (15).

The Law on Fees for the Use of Public Goods 49/2019 regulates fees for the use of public goods, namely: payer, base, amount, method of determination and payment, allocation of income from the fee, as well as other issues of importance for determining and paying fees for the use of public goods (16).

Marketplace Participants

Discover examples of public and private stakeholders active in this investment opportunity that were identified through secondary research and consultations.

Private Sector

Enterprises such as Agent Plus Doo, Dragon Maritime See D.O.O, Sea Danube Trans Doo, Rubikon Shipping Company Doo, Hibrid Doo, Euro Gas D.O.O, Jrb Ad, Rhenus Partnership Serbia Doo, Dunavski Transport Doo.

Government

Ministry of Construction, Transport, and Infrastructure, Ministry of Public Investments, Ministry of Environmental Protection, Port Governance Agency, Agency for Environmental Protection.

Multilaterals

International Trade Administration, International Finance Corporation (IFC), United Nations Economic Commission for Europe (UNECE), European Federation of Inland Ports (EFIP).

Non-Profit

International Association of Ports and Harbors (IAPH), International Harbour Masters' Association (IHMA), European Sea Ports Organisation (ESPO), International Maritime Organization (IMO).

Public-Private Partnership

The Ports Agency supports PPP for port management and public procurement for marina construction. They announce an annual tender for port activities and plan to introduce concessions for construction and management projects worth over USD 5.2 million (45, 10, 11).

Target Locations

See what country regions are most suitable for the investment opportunity. All references to Kosovo shall be understood to be in the context of the Security Council Resolution 1244 (1999)
country static map
semi-urban

Serbia: Vojvodina Autonomous Province

The EU target was to triple investment in Rhine-Danube Corridor to 26 billion EUR (USD 27 billion) by 2020: 5/9 ports in Vojvodina on the Danube river, 1 on Tisza, and 1 on Sava prioritizing investment in port infrastructure in the region (22, 9).
urban

Serbia: Belgrade Region

The port in Belgrade, together with the ports in Pančevo and Novi Sad, represents the most developed port in Serbia from the point of view of the built infrastructure and the amount of transhipped goods. A port relocation is being considered due to limited conditions for further development (9).
semi-urban

Serbia: Southern and Eastern Serbia

Ports in Smederevo and Prahovo may expand capacity (4). Port Smederevo tranships 2-4M tons of goods annually, while Prahovo handles thousands of tons (9). This region of Serbia has the deepest, broadest, and narrowest points of the Danube River.

References

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