BELGRADE- Serbia's Ministry of Construction and China Road and Bridge Corporation (CRBC) agreed on Friday on a 3.2-billion euro project to improve waste utilities and processing in the Balkan country, a key condition for its accession in the European Union.

CRBC would design and develop sewers and sewage processing plants in 65 municipalities and overhaul six regional landfills in line with EU regulations, the ministry said in a statement.

Belgrade maintains close ties with Beijing and Chinese companies have so far invested billions of euros in Serbia, mainly in infrastructure and energy projects.

"The contract ... would allow a number of municipalities and cities in Serbia to solve its decades-long problems related with the treatment of waste water and processing and treatment of solid waste," the statement said.

Under the deal, projects must be completed within five years after receiving construction permits. No less than 49% of all subcontractors must also be from Serbia.

Serbia, an EU membership candidate and one of Europe's most polluted countries, needs to spend billions of euros to clean up the environment and regulate carbon emissions before it joins the bloc.

(Reporting by Aleksandar Vasovic; Editing by Steve Orlofsky) ((aleksandar.vasovic@thomsonreuters.com; +381113044904;))