As it was said at the conference, the agreement also envisages construction of a desulfurization system for blocks 1 and 2 in that power plant, while the deadline for completion of all works is 30 months from the release of the loan.
EPS Director General Dragomir Markovic said that the project also included construction of a railway, a port on the Danube and a road necessary for transportation of both equipment and limestone required for the desulfurization system. He said that 220 million euros would be provided from the loan, while the rest would be provided from the funds of the EPS.
Markovic said that the Ministry of Finance of Serbia should file the loan application to the Chinese Government in one week, adding that he expected the funds to be approved in two or three months, although the agreement envisaged approval of the funds in six months.
Serbian Minister of Energy Petar Skundric said that the agreement with CMEC was part of the interstate strategic cooperation between Serbia and China and expressed an expectation that the loan would be approved in a short time. The preliminary agreement with CMEC, signed on February 3, also envisages an increase of the capacities of Drmno strip mine to 12m tons on annual basis by the construction of new block B3.
Dragomir Markovic specified that the implementation of the second phase should commence in 2014. On the occasion of signing of the preliminary agreement, it was said that the project would be financed from the loan of Chinese Exim Bank, which should provide 85% of the funds (1.06 billion dollars), while the remaining 15% of the funds were to be provided by the Electric Power Company of Serbia and Kostoal steam power plant.
The cooperation between China and Serbia in renovation of TE-KO Kostolac is part of the interstate agreement concluded in August 2009 in Beijing, during the visit of the highest state delegation of Serbia to China.