Serbia, Five billion euros for guarantees and potential borrowing in the energy sector

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The budget proposal for 2023 plans to issue guarantees in the amount of 2.13 billion euros for energy projects with the German Development Bank (KfW), domestic and foreign commercial banks, the European Investment Bank, as well as the French Development Agency, and the above is that the state can approve another three billion euros of project and program loans in that area.

In a series of articles, Biznis.rs analyzed the most important projects and allocations planned by the state treasury’s proposal for 2023, and we especially covered the topics of agriculture, energy, infrastructure, as well as the policy of subsidies.

In addition to subsidies for the energy sector in the amount of 295 million euros and about 1 billion euros for “funds to overcome the energy crisis”, the budget proposal offers for inspection a whole list of projects that are being implemented or should come to life in the next year, for which 2 ,13 billion euros guarantee – from the Trans-Balkan Electric Power Corridor or the Kostolac 1 wind farm to the construction of the Buk Bijela hydroelectric power plant (250 million euros) and the reversible hydroelectric power plant (RHE) Bistrica .

The RHE Bistrica project with 600 million euros is the most expensive in the guarantee category, and like Buk Bijela, it is also mentioned in the next part of the budget proposal, so we “counted” them only once.

The plan of potential project and program loans, namely, envisages undertakings that are far more expensive than RHE Bistrica. It is possible to request a total of 3.76 billion euros from foreign investment corporations, funds and banks – including, among other things, one billion euros each for the construction of the hybrid reversible hydroelectric plant Đerdap 3 and a wind power plant with a capacity of 800 MW to 1 GW, as well as 800 million euros for the construction of a solar 1GW power plant , about which there are no additional details in the budget proposal itself.

Jelica Putniković, editor and founder of the Energija Balkana portal, tells Biznis.rs that it is evident that Serbia is paying the price of not investing in the energy sector, primarily in the electric power industry, but also in the gas sector and even in the oil sector when it comes to storage of derivatives and construction of pipelines. which, as he points out, was announced decades ago and has not been completed.

It is interesting that neither in the rebalance for 2022 nor in the budget proposal for 2023 was there a place for an oil pipeline that would connect Serbia with the “Družba” oil pipeline in Hungary.

“It’s not something we should start tomorrow, because until the war in Ukraine ends, Europe would certainly not allow us to buy Russian oil that arrives that way, even if we manage to finish it in a year and a half”, he says. Putniković emphasizes that there are many capacities that need to be built before that pipeline.

“The prerequisite for everything is that we approach it seriously, and that local experts set priorities and implement plans”, our interlocutor emphasized.

According to her opinion, what should be invested in first are the new capacities of Elektroprivreda Srbije (EPS).

“The construction of RHE Bistrica should be started as soon as possible, and the issue of whether Đerdap 3 will be built should also be finally resolved .” “Also, EPS should finally be given the go-ahead to build wind farms that are planned on ash pits and old mines, because what we gave for feed-in tariffs to foreign investors should actually be redirected to EPS”, advises Putniković.

When it comes to the gas sector, he believes that two gas storage facilities should be built, in Itebej and Tilva.

“During the current crisis, it was shown that, as much as everyone talks about solidarity, it is actually about economic arrangements. We thank the Hungarians for storing gas for us, but they charge for it,” says Putniković and draws attention to the fact that energy independence should be built so that we have our own capacities on our territory, and not to look for a private or foreign owner “who will always insist on profit, and not on our energy security”.

“Therefore, loans for those capacities should be raised and gasification of the country should be continued, because it is necessary for the development of the economy, especially in the southern parts of the country”, concluded Putniković.

The budget proposal for 2023 plans to continue the construction of the gas interconnector with Bulgaria, which should enable Serbia to be supplied from Azerbaijan, as well as the future LNG terminal in Alexandroupolis, Greece, and a guarantee of 140 million euros is also planned for Srbijagas – “for strengthening the transport capacity of gas pipelines in Serbia”, Biznis writes.

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