Serbia, The energy state enterprises will be managed by Norwegians

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The President of Serbia, Aleksandar Vučić, confirmed the information of the research and publishing center Demostat that the energy state enterprises in Serbia will be managed by foreign professional management, it was stated on the website of Demostat.

Vučić, as stated, said at last night’s annual press conference that the Norwegians, with whom Serbia cooperates in the implementation of reforms in the energy sector, will become members of supervisory boards and executive bodies in energy companies, in order to change the way the state manages to his companies and left the “party-parasitic system”.

It is pointed out that Demostat wrote at the end of December that the Norwegian partners proposed a “Management services agreement” model, which implies that the energy state enterprises in Serbia are managed by foreign professional management.

For the revitalization of energy companies and the construction of new capacities, financial resources are necessary and foreign partners are ready to help, but they have no confidence in the previous local management, which was often elected along party lines, according to the text of Demostat.

“This is exactly what was confirmed last night by Vučić, who, speaking about energy stability and fiscal consolidation of energy companies, said that Serbia is working with the Norwegians, that they will also invest money, and that they will become members of supervisory boards, as well as executive bodies, because the state wants to change the way it managed businesses and to get rid of the party-parasitic system,” writes Demostat. 

It is emphasized that Vučić said that “they can no longer tell him that a party man was appointed so that someone would steal something and that now Norwegians will be appointed”.

“We will appoint the Norwegians. We will show that the country is more important to us than the parties, we want to show that the country, our Serbia, is more important to us than anything else. We will do that in the next three, four months, we have already started the implementation Vucic said.

In December 2022, Demostat asked the Minister of Energy and Mining Dubravka Đedović whether foreigners will be at the head of state-owned energy companies and when they will be appointed to those positions, i.e. whether and when there will be a change of leadership in public companies and whether consulting company Rystad Energy, which was chosen as a partner in the reform process, choose professional management. 

The ministry, Demostat stated, then replied that the state does not intend not to be the owner of energy companies and that the main problem at the moment is not ownership, but management.

“The goal is for Serbia to have security of supply and for key energy companies to be efficient and profitable, and this should be the task of professional management, and to raise money through the improvement of operations that would later be invested in strengthening the energy sector,” it stated. then the ministry in response to Demostat.

The experience of Norway as an energy giant is valuable for Serbia, according to the interpretation of the Ministry of Mining and Energy, in the process of reforming the energy sector, given that the Scandinavian country introduced professional management in energy companies 30 years ago and created a favorable climate for private investment in a sustainable way . 

“From Norway’s experience, this implies that citizens feel that natural resources belong to them too, and that the state and companies should manage them in a responsible, rational and efficient way,” the relevant ministry stated at the time.

In the meantime, the Supervisory Board of the Electric Industry of Serbia (EPS) adopted a decision and made a proposal to the Government that EPS change its form from a public company to a closed joint-stock company with 100 percent of the shares owned by the state. As Đedović said, the government will make a decision on the status of EPS at the beginning of this year. 

According to Demostat, the news about the transformation of EPS from a public company into a joint-stock company raised speculations that the door is opening to privatization and the search for a strategic partner for the largest energy company in Serbia, since a public company cannot be privatized, and a joint-stock company can. 

It is speculated that this is a maneuver by the authorities in order to find a way for EPS to get a loan at a time when the conditions for borrowing by Serbian state enterprises are increasingly strict. In fact, there is a fear that the ownership transformation of EPS is taking place so that, for the purposes of obtaining loans, the shares of the company can be pledged, it was stated in the text of that center.

In June of last year, Demostat wrote that, apparently, the model for converting EPS into a joint-stock company will be the one applied in the case of Elektromreža Srbije. This means that it will be a closed joint-stock company wholly owned by the state, as are energy systems in a large number of countries. In practice, this means that there is no trading in its shares, nor will the company be licensed on the stock exchange. 

If the Government of Serbia were to make a decision on privatization, EPS could, according to Demostat, be reformed into an open joint-stock company and part of the shares listed on the stock exchange, so that the company would have money for investment.

On December 15, Vučić, answering the question of what is behind the idea of ​​EPS becoming a joint stock company, said that the state will not sell EPS and that the goal is for the company to go public, but for the state to remain the majority owner.

Đedović and Vučić stayed in Norway at the end of November 2022, where they talked with state officials, as well as Norwegian companies and advisers, interested in helping Serbia and investing in Serbia to reform its energy sector.  

During the visit, Vučić said that the Norwegian partners had completed the development study and offered solutions. As he stated, they said that a change of management was not necessary for only one of the five main companies in the energy sector. He also said that it is necessary to do it as soon as possible, so that the companies will bring profit in the future, Novi Magazin writes.

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