The District Heating (DH) systems in Serbia’s cities and towns are, in most cases, the single largest user of imported natural gas. Due to its largely outdated and inefficient equipment, ineffective operation and deferred/poor maintenance, DH systems offer ample opportunity for reduction of gas consumption, thus reduced dependency on gas primarily imported from Russia. E3I and Tetra Tech where recently awarded a contract by USAID to improve the efficiency of Serbian DH systems, focusing on decreasing the amount of fuel required to meet the needs of consumers. The project focuses on identifying and facilitating those energy-related improvements that have the greatest potential impact on the efficiency of DH system operations, and which can be financed and implemented by the DH company using its own resources, bank loans, IFIs, or through an Energy Service Contracting (ESCO) or Public Private Partnership (PPP) mechanism. E3I’s engineers are for responsible identification/conceptualization of pilot projects, focusing on generation and distribution system improvement, end-use consumption by district heating customers, connection/reconnection of customers that can benefit from efficient district heat services, and management and operation of municipal district heating systems. Following this initial phase, E3I will develop tender specifications, manage the public procurement process, and oversee the implementation of pilot projects.