The World Bank has approved a $300 million 30-year loan to help Serbia recover from floods in May that killed 57 people and devastated its energy sector, the lender said in a statement on Saturday.

The heaviest rainfall in living memory caused rivers to burst their banks and sweep away roads, bridges and homes, causing damage estimated at 1.5 billion euros ($1.88 billion).

The cost means the Serbian economy is expected to contract in 2014, further complicating government efforts to rein in a budget deficit seen at more than 8 percent of national output.

The loan, which was approved on Friday and has a grace period of 18 years, will help meet domestic energy demand, protect farmers and assets in areas affected by flooding, and improve the Balkan country's capacity to respond to disasters.

"The project will support imports of electro power worth 120 million euros ($150.18 million) to improve power supplies and avert a ... energy crisis, especially during winter," the World Bank said it its statement.