Serbian engineering group Kodar Energomontaža is preparing one of the largest domestic corporate green-bond transactions yet attempted on the Belgrade Stock Exchange, seeking to raise RSD5.86bn, or approximately €50mn, to support the development of its Jasikovo wind farm and Brebex solar project. The transaction represents more than another source of financing for two renewable-energy assets. It is also an important test of whether Serbia’s still-small corporate bond market can develop into a meaningful alternative to traditional bank lending for large infrastructure and energy investments.
Primary trading is scheduled for August 24, 2026. Kodar will offer 586,000 bonds with a nominal value of RSD10,000 each, carrying a fixed annual coupon of 7 per cent and a five-year maturity. Interest will be paid annually, while the entire principal will be repaid at maturity rather than amortised over the life of the bond. The securities are intended to be admitted subsequently to the Open Market segment of the Belgrade Stock Exchange.
The issue is formally available to both Serbian and foreign legal entities and adult individual investors, although the minimum subscription of 100 bonds, equivalent to RSD1mn, makes it primarily an institutional, corporate treasury, private-banking and high-net-worth product rather than a conventional retail security. The offer will be considered successful once at least 20 per cent of the issue has been subscribed. That means Kodar could technically complete the transaction after raising approximately RSD1.17bn, or close to €10mn, rather than the full targeted amount.
The relatively low success threshold gives the issuer flexibility, but it also makes the subscription level an important market signal. A fully placed transaction would demonstrate that domestic investors are prepared to allocate significant dinar liquidity to privately issued, long-duration corporate credit. A placement close to the minimum threshold would tell a different story, leaving Kodar to replace a larger portion of the planned financing with additional shareholder capital, bank funding or another financing instrument.
At the full issue size, Kodar would face an annual cash coupon obligation of approximately RSD410.2mn, while cumulative coupon payments over five years would reach about RSD2.05bn before the RSD5.86bn principal repayment falls due at maturity. The bond is unsecured, making its yield and repayment profile materially different from a sovereign bond or a secured project-finance facility. The prospectus also provides for a bullet maturity rather than gradual principal repayment, concentrating refinancing and liquidity requirements in the final year.
The 7 per cent coupon comes against a Serbian monetary environment in which the National Bank of Serbia kept its key policy rate at 5.75 per cent in August, while annual consumer-price inflation stood at 1.9 per cent in July 2026. Serbia’s most recent comparable domestic government auction provides a more useful fixed-income benchmark: a five-year dinar government bond auction in June cleared at a yield of 5.00 per cent. Although the sovereign bond has a somewhat different remaining maturity, the figures indicate a nominal premium of roughly 200 basis points for Kodar’s corporate paper relative to the latest medium-term government borrowing cost.
That premium should not be interpreted simply as additional income. It compensates investors for substantially greater corporate credit risk, limited secondary-market liquidity and exposure to the execution of a sizeable renewable-energy investment programme. Kodar received a B/Stable issuer rating from Scope Ratings in February 2026, while the planned senior unsecured bond received a preliminary (P)B rating. Scope identified the company’s relatively small scale, customer concentration and expected increase in leverage as constraints and specifically highlighted the refinancing risk associated with the future bullet repayment.
The bond nevertheless enters a market where corporate yields remain relatively scarce. Its most obvious precedent is Elixir Group, which in April 2025 completed a RSD4.1bn, approximately €35mn, five-year green bond carrying a 6 per cent annual coupon. Elixir’s transaction was notable because it marked the first primary trading of a financial instrument on Serbia’s organised market in more than a decade and the entire issue was sold. Kodar is therefore coming to market with an instrument approximately 43 per cent larger in nominal euro terms and a coupon one percentage point higher than that earlier transaction.
The Elixir experience also illustrates the liquidity constraint investors need to price. Belgrade Stock Exchange records for its bond have recently shown numerous trading sessions with zero turnover, despite the successful primary placement. Serbia’s corporate bond market remains predominantly a buy-and-hold market rather than a deep secondary market where investors can expect to exit substantial positions quickly without affecting price. Kodar’s 7 per cent coupon therefore needs to be considered partly as compensation for tying up capital in an instrument that may prove difficult to trade actively before maturity.
The strategic significance of the transaction becomes clearer when the use of proceeds is examined. Kodar has committed the bond funds exclusively to eligible renewable-energy investments under its green financing framework. The money is intended for Jasikovo, a wind project of up to 70MW, and Brebex, a solar project of up to 300MW accompanied by battery storage. Both project companies are wholly owned by Kodar. The proceeds will be transferred to the project companies through subordinated shareholder loans and/or additional equity contributions, with the final structure depending on the requirements of the banks providing project finance. The funds are intended for new investment rather than refinancing existing expenditure.
The scale of the projects makes clear that the bond is only one layer of a much larger financing structure. Kodar estimates total investment in Jasikovo at about €133mn and Brebex at approximately €262mn, giving combined expected capital expenditure of roughly €395mn. A fully subscribed €50mn bond would therefore represent only about 12.7 per cent of the two projects’ aggregate investment requirement. Kodar has said the remaining funding is expected to come from sponsor resources and long-term bank project finance, and that it is already in advanced discussions with commercial banks.
The subordinated nature of the financing is significant. From the perspective of the project-finance banks, the bond proceeds effectively strengthen the sponsor-capital layer beneath senior debt. From the perspective of Kodar bondholders, however, this creates an economically important distinction: they lend to the parent company, which in turn places capital into project companies that are expected to carry their own senior bank obligations. Cash ultimately generated by the renewable assets will therefore have to support project-level debt service before it can contribute freely to parent-company liquidity. That does not automatically make the structure unattractive, but it means the green label should not obscure the underlying hierarchy of cash flows and creditors.
An illustrative capital structure shows why the bond matters despite accounting for less than one-seventh of total CAPEX. Were banks ultimately to provide around 70–75 per cent of the projects’ investment cost — purely an illustrative range rather than Kodar guidance — senior project debt would amount to approximately €276mn–€296mn. The remaining sponsor and subordinated funding requirement would be about €99mn–€119mn, meaning a fully placed €50mn bond could provide roughly 42–51 per cent of that non-bank capital layer. The issue can therefore function as a significant bridge between Kodar’s existing balance sheet and the much larger pool of bank financing required to build the projects.
Development spending is already substantial. Kodar had invested RSD734.5mn in the two projects by the end of 2025, divided between roughly RSD351.9mn for Jasikovo and RSD382.6mn for Brebex. By March 31, 2026, cumulative development investment had risen to approximately RSD1.66bn, with Jasikovo accounting for about RSD1.18bn and Brebex around RSD480mn. The sharp increase indicates that the projects have moved beyond an early-stage development concept and are absorbing meaningful capital ahead of construction and financial close.
Jasikovo is the more advanced of the two assets. The project, located across the municipalities of Majdanpek and Žagubica, was among the successful projects in Serbia’s renewable-energy auction programme. In March 2026, turbine manufacturer Nordex confirmed an order for 11 N175/6.X turbines, each configurable at up to 7MW, together with a long-term service agreement. Nordex expects installation of the first turbine to start in April 2027, with initial electricity generation targeted for July 2027. Expected net annual production is more than 270GWh.
The auction framework is relevant because Serbia has increasingly moved renewable development towards contracts-for-difference structures designed to provide longer-term revenue visibility. The country’s second renewables auction concluded in 2025 after attracting 41 proposals, with support awarded across wind and solar projects under a 15-year CfD framework. Such arrangements can improve bankability by reducing merchant-power-price exposure during the contracted period, although construction performance, operating availability, balancing costs and financing structure remain important determinants of project returns.
Brebex is the larger capital commitment. The project near Dimitrovgrad is designed for up to 300MW of solar capacity, together with battery storage and associated grid infrastructure, and Kodar’s prospectus estimates annual electricity production at approximately 475GWh. At an estimated €262mn investment cost, Brebex alone is several times larger than the parent company’s current annual earnings base, illustrating the degree to which Kodar is attempting to transform itself from an engineering and construction contractor into a company with meaningful ownership exposure to power-generation assets.
That transformation is central to the credit case. Kodar’s traditional operations cover electricity infrastructure, telecommunications, EPC services and related engineering activities in Serbia, the wider region and European markets, including the Netherlands. The company traces its history to 1958, giving it a long operating record in infrastructure contracting. Renewable ownership, however, introduces a different financial profile: much larger upfront capital requirements, longer asset lives, construction and grid-connection risks, but potentially more predictable long-term cash flows once assets are operating.
According to the bond prospectus, Kodar generated standalone EBITDA of approximately RSD1.19bn in 2025, compared with about RSD1.56bn in 2024, while standalone net financial debt stood at roughly RSD997mn. Its current ratio was approximately 1.08, and interest coverage was reported at 5.96 times. The 2025 figures in the prospectus were presented as unaudited. Against that earnings base, the full bond’s annual RSD410.2mn cash coupon would equal roughly 35 per cent of 2025 standalone EBITDA before considering taxes, working-capital needs, existing debt service or investment requirements.
The comparison should not be read as a forecast that Kodar will struggle to service the coupon: EBITDA is not cash available for bondholders, while future earnings can change materially as projects and EPC contracts progress. It does show, however, that the issue is large relative to the company’s existing earnings base. The bond’s face amount is almost five times 2025 standalone EBITDA, reinforcing Scope’s expectation that leverage will increase as Kodar moves deeper into renewable development.
Credit protection is therefore more important than the green designation. The bonds are unsecured, principal is repaid entirely at maturity, and the documentation does not create the kind of direct project security package normally associated with senior project finance. The disclosed default provisions include circumstances such as prolonged delays in coupon payments and extended blocking of the issuer’s accounts. The documentation also does not establish a conventional bondholder assembly or collective bondholder representation structure. Investors are effectively taking corporate exposure to Kodar rather than directly secured exposure to the physical wind and solar assets.
The environmental credentials of the transaction are separately stronger. S&P Global Ratings’ sustainable-finance team assessed Kodar’s green financing framework as “Dark Green”, with proceeds directed towards new wind, solar and associated storage investments and the framework aligned with the International Capital Market Association’s Green Bond Principles. That assessment concerns the environmental quality and use of proceeds rather than the issuer’s ability to repay debt. It should therefore be kept distinct from Scope’s B/Stable credit rating.
For Serbia’s capital market, that distinction is healthy. A functioning green-bond market requires more than environmentally eligible assets; it requires investors to price duration, leverage, liquidity, covenant protection, construction exposure and refinancing risk independently of the green label. Serbia has been attempting to deepen its domestic capital markets with support from international financial institutions, including programmes aimed at increasing the number of corporate issuers and encouraging thematic bonds. Elixir demonstrated that local investors would fund a sizeable green corporate transaction. Kodar will test whether that demand extends to a larger, higher-yielding and lower-rated credit.
The result on August 24 will consequently matter beyond Kodar itself. Full placement of RSD5.86bn would establish another reference point on Serbia’s emerging corporate yield curve and demonstrate that a domestic issuer can raise the equivalent of €50mn in dinars for long-duration renewable investment. It would also give other Serbian energy, industrial and infrastructure companies a clearer benchmark for comparing bond financing with bank loans, shareholder capital and international debt.
For Kodar, the transaction is ultimately a balance-sheet bridge to a much larger strategic move. Jasikovo and Brebex require approximately €395mn of investment, while the bond provides €50mn of subordinated sponsor-level funding that can help unlock considerably larger project-finance facilities. The economic opportunity is the creation of long-lived renewable assets capable of diversifying cash flows away from pure contracting. The accompanying risks are equally identifiable: construction execution, grid connection, rising leverage, structural subordination, thin secondary-market liquidity and a sizeable bullet maturity.
The 7 per cent coupon therefore sits in an understandable part of the Serbian fixed-income spectrum. It is materially above recent sovereign borrowing costs and above the coupon offered by Elixir’s earlier green bond, but it comes with speculative-grade corporate credit exposure and limited evidence that investors will be able to trade meaningful volumes after issuance. For investors willing to hold the security through its five-year life, the return is essentially compensation for financing Kodar during the most capital-intensive phase of its transition from infrastructure contractor to renewable-energy owner — with the success of Jasikovo and Brebex likely to determine whether that transition ultimately strengthens the company’s balance sheet or leaves the 2031 refinancing requirement as the defining credit event.
Owners Engineer and Supervision role is delegated to local company Clarion Owners Engineer, who is also managing OE role on the wind park Crni Vrh.
