Serbia’s state power utility Elektroprivreda Srbije (EPS) has launched a consultancy tender to prepare the procurement documentation for the planned 660-MW Bistrica pumped-storage hydropower plant, moving one of the country’s largest prospective energy investments closer to an international construction tender.
EPS is seeking a consultant to review and harmonise tender documents with Japan International Cooperation Agency (JICA) procurement requirements and the FIDIC Yellow Book 2017, according to procurement information published this week.
The consultancy contract is estimated at RSD 104.3 million excluding VAT, with bids due by October 6.
The selected consultant would have 10 months to complete the work, including obtaining JICA acceptance of the tender package.
The procurement does not represent the launch of the main Bistrica construction tender, and no main works contract has been awarded.
A JICA financing agreement for the project has also not yet been signed.
The tender nevertheless represents a significant shift for Bistrica from feasibility and project-development work toward the procurement structure required for a large internationally financed hydro project.
Serbia sees the plant as a central part of its future electricity system as the country adds more intermittent wind and solar capacity while attempting to reduce its dependence on coal.
Storage becomes central to Serbia’s power strategy
Pumped-storage plants use electricity during periods of low demand or abundant generation to pump water to a higher reservoir and release it through turbines when electricity demand and prices rise.
That makes them one of the few technologies capable of providing large-scale electricity storage over extended periods.
For Serbia, the value of Bistrica is therefore less about adding another source of annual electricity production than about increasing the flexibility of the entire power system.
The Energy Ministry has said the project could facilitate the integration of as much as 1,500 MW of additional renewable generation.
That becomes increasingly important as Serbia develops more wind, solar and battery-storage projects while its transmission system faces growing connection pressure.
Solar plants tend to produce most heavily during daytime hours, while wind output can fluctuate sharply.
Without storage or other flexible capacity, periods of high renewable generation can create congestion and lower market prices, while evening demand can still require thermal generation or imports.
A large pumped-storage plant can shift part of that electricity between periods.
Bistrica would become a strategic balancing asset
Serbia already operates the Bajina Bašta pumped-storage hydropower facility, which has long provided balancing and peak-generation capability.
Bistrica would substantially expand that role.
At 660 MW, the planned plant would become one of the largest flexible generation assets in the Serbian power system and could support both domestic balancing and cross-border electricity trading.
Its commercial value could increase as electricity markets across Southeast Europe become more volatile.
Periods of negative or very low day-ahead prices have become more common as solar and wind capacity expands across the region.
At other times, particularly during evening peaks, droughts or thermal outages, prices can rise sharply.
Pumped storage can potentially exploit those spreads by buying or absorbing electricity when it is cheap and generating when it is more valuable.
That makes Bistrica increasingly relevant not only to security of supply but to EPS’s future position as a regional market participant.
JICA financing remains a critical milestone
The project’s financing structure remains one of the key outstanding issues.
Serbian and Japanese officials said earlier this year that important technical and financing questions had been aligned, with a JICA-backed loan agreement targeted around Expo 2027 in Belgrade.
That timetable has not yet produced a signed loan.
The consultancy tender therefore should be viewed as preparation for the financing and procurement process rather than evidence that construction is ready to start.
JICA-backed projects typically require procurement documents to comply with the agency’s rules before major contracts can proceed.
That explains EPS’s decision to engage a consultant specifically to align the Bistrica package with JICA procedures and international FIDIC contracting standards.
The requirement for JICA acceptance is particularly important.
It means the tender documentation must satisfy not only EPS and Serbian legal requirements but also the standards of the expected international financier.
That should reduce procurement risk once the main works package reaches the market, but it also means the project remains dependent on completing several preparatory stages.
Ten-month consultancy gives indication of timing
The consultancy timetable provides the clearest indication yet of Bistrica’s near-term project sequence.
If the contract is awarded after the October bidding deadline and the consultant uses most of the 10-month period, preparation and approval of the main tender package could extend well into 2027.
That would be consistent with the government’s stated ambition to reach a financing milestone around Expo 2027.
It also suggests that a full construction mobilisation should not be assumed in the immediate term.
Before major works can begin, Serbia will need to finalise the procurement documentation, secure JICA approval, conclude the financing structure, launch and evaluate the international tender, sign the main contract and complete any remaining permits or preparatory activities.
For EPC contractors and equipment suppliers, however, the current tender is an early signal that EPS is beginning to structure the project according to the requirements that will govern the eventual construction competition.
FIDIC structure points to integrated contracting
Use of the FIDIC Yellow Book 2017 is also significant.
The Yellow Book is generally used for plant and design-build projects where the contractor takes substantial responsibility for engineering as well as construction and equipment delivery.
For a pumped-storage hydropower project, that could cover a complex combination of underground and civil works, waterways, turbines, generators, electrical systems, control systems and grid integration.
The contract structure will be critical because hydro projects carry substantial geological and interface risk.
Unexpected ground conditions, tunnelling complexity, water management and equipment integration can all create delays and claims.
The allocation of those risks between EPS and the eventual contractor will therefore influence both the contract price and the willingness of international companies to bid.
A well-structured FIDIC tender could improve competition.
Poorly allocated geological or design risks could increase contingency pricing or reduce the number of bidders.
Serbia needs flexibility as renewable pipeline grows
Bistrica is being developed against a rapidly changing Serbian electricity market.
Large volumes of wind, solar and battery projects have sought grid connections, while transmission operator EMS has tightened the process through connection studies and financial guarantees.
The constraint is no longer simply whether renewable developers can secure land and permits.
It is increasingly whether the power system can absorb new generation without creating reliability and congestion problems.
That makes flexibility infrastructure more valuable.
Serbia is pursuing battery-storage projects, stronger transmission links and regional market integration alongside pumped storage.
But batteries and pumped hydro serve somewhat different roles.
Battery systems can react extremely quickly and are well suited to balancing and short-duration price arbitrage.
Pumped storage can typically provide much larger energy volumes over longer periods.
A future Serbian system containing both technologies would have substantially more flexibility than the current coal- and hydro-dominated structure.
Coal transition raises strategic importance
The project also has a longer-term link to Serbia’s coal transition.
EPS remains heavily dependent on lignite-fired generation, particularly from the Kolubara and Kostolac systems.
Those plants provide dispatchable power but also account for most of the utility’s direct carbon emissions.
As Serbia moves closer to EU electricity-market integration and faces stronger carbon-price exposure, relying on lignite to balance renewable generation becomes increasingly costly.
Pumped storage offers a way to provide part of that flexibility without burning additional coal.
It cannot replace thermal generation by itself.
Nor does it generate primary energy.
Its economics depend on having sufficient low-cost electricity available for pumping.
But as renewable penetration increases, periods of surplus electricity should become more frequent, strengthening the economic rationale for large storage assets.
Regional electricity market could strengthen economics
Bistrica’s economics will also depend on markets outside Serbia.
The Serbian grid is closely connected to Hungary, Romania, Bulgaria, North Macedonia, Bosnia and Herzegovina, Montenegro and other regional systems.
Price spreads between Southeast European markets can be substantial.
Hungary frequently trades at a premium during constrained periods, while hydro-rich Balkan markets can experience much lower prices when water availability is strong.
A flexible 660-MW plant could allow EPS to respond more actively to those regional spreads, subject to transmission availability.
Future market coupling with the EU could increase those opportunities by making cross-border trading more efficient.
The plant should therefore be assessed as a regional flexibility asset rather than only a Serbian generation project.
Cost and construction risk remain decisive
The main unanswered question remains economics.
Large pumped-storage plants require substantial upfront capital expenditure and typically take years to build.
Civil works represent a major share of cost, and geological surprises can push projects over budget.
The final financing terms offered through JICA will therefore be crucial.
Long-tenor, relatively low-cost sovereign or state-backed financing can materially improve pumped-storage economics because such plants have very long operating lives.
Conversely, delays and construction cost escalation could weaken the investment case.
The procurement structure now being prepared will help determine how those risks are shared.
That makes the RSD 104.3 million consultancy contract small relative to the eventual project cost but important to whether Bistrica can move successfully into the construction phase.
From strategic concept toward procurement
Serbia has discussed large-scale pumped storage for years, but Bistrica is now acquiring a clearer sequence of financing and procurement steps.
The latest tender does not mean construction is imminent.
It does mean EPS is beginning to prepare the documentation required for an internationally financed design-and-build
