The project aimed at facilitating the development of a market for biomass and supporting the sustainable use of biomass in the generation of heat and electricity in Serbia. In terms of capital investments, the Serbian government and KfW envisaged the construction of several biomass-fired CHP-plants in cooperation with the DHC to tab the vast energy potential of biomass in Serbia and increase the efficiency of heat and electricity generation in Serbia by introducing a fuel-efficient energy technology.The pre-feasibility studies were made to analyse, evaluate and compare the potential use of various types of biomass at 15 potential project locations in terms of technical, logistical, and economic criteria. The studies have served the Serbian government and KfW as the basis for selecting projects to be followed up by comprehensive feasibility studies and, eventually, to be financed.