Within the Western Balkans region, asecure and reliable energy supply is critical forsustainable economic growth. Expensive, imported energy andinefficient energy use place a huge burden on municipalitiesthat require affordable and reliable infrastructure servicesto attract investment and provide services to theircitizens. With energy prices projected to rise, servicedelivery costs will increase, further straining municipalbudgets and disproportionally affecting poorer households.The ability of municipalities to adequately budget for andfinance reductions in energy use thus will be a criticalneed in the years ahead. Saving energy can also help citiesrenew their building and infrastructure stock while helpingto create employment opportunities, all paid for through thereductions in their energy bills. The municipal budget isthe main financial planning document at the local level. Itcontains a list of municipal revenues and expenditures forthe coming year, the latter of which are divided intooperating and capital expenditures. Typically, municipalbudgets are for a single year. This guidance note willreview current policies and procedures for municipalbudgeting and financing in the region, identifyshortcomings, and present a 'road map' forimprovement based on several proposed'milestones.' These recommendations can helpsupport capital investments for providing a variety ofmunicipal services, not just those for Energy Efficiency, or EE.