The report analyzes barriers to andopportunities for private sector participation in districtheating (DH) in the Western Balkan countries of Bosnia andHerzegovina, Croatia, Kosovo, and Serbia, as well as inMongolia and Ukraine. Specifically, the report analyzes thelegal and regulatory frameworks for public-privatepartnerships (PPP) and for DH in each of thecountries,including an overview of the primary and secondarylegislation, PPP preparation and approval processes,institutional setup of the DH sector, heat tariff-settingprocedures, etc. In addition, the report describesinternational best practice for various business models forprivate sector participation in DH and providescountry-specific recommendations to improve theattractiveness of PPP in the DH sector. Finally, the reportprovides an estimation of the investment needs in the DHsector by country and indicates selected investmentprojects, which are conservatively assessed at 1.5 billion dollars.