Serbia’s unpaid electricity and gas bills have moved beyond the category of routine commercial arrears. They now form a visible quasi-fiscal liability inside the country’s energy system, with total reported debts to Elektroprivreda Srbije (EPS) and Srbijagas exceeding RSD 143 billion, or comfortably above €1 billion. For a power and gas sector already central to Serbia’s fiscal stability, industrial competitiveness and investment credibility, the numbers point to a deeper structural problem: state-owned utilities are still being used as shock absorbers for weak public companies, municipal systems, insolvent industrial assets and politically sensitive consumers.
The largest exposure sits with Srbijagas. According to the latest available debtor data for May 2026, unpaid gas bills exceed RSD 123 billion, while overdue electricity bills to EPS are close to RSD 20 billion. The split matters because gas arrears are not merely a collection issue. They sit inside a chain that links municipal heating plants, local distribution companies, bankrupt industrial users, imported gas obligations and the broader balance sheet of the state. Serbia can present a relatively orderly fiscal deficit on paper, but when energy companies carry non-performing receivables from other public-sector entities, the risk does not disappear. It is simply held outside the budget until it has to be recognised.
That is why the International Monetary Fund has pushed Serbia to address the arrears more decisively. The IMF’s warning is not only about corporate discipline at EPS and Srbijagas. It is about the possibility that unpaid bills eventually become a fiscal repair bill for the Republic of Serbia. In practical terms, the state can face the same exposure twice: first through the under-collection of revenues by utilities it owns, and later through recapitalisation, debt assumption, guarantees or liquidity support if those utilities cannot absorb the losses themselves.
The list of the largest gas debtors shows how concentrated and politically difficult the problem is. The biggest reported gas debtor is Novi Sad-Gas, owned by the City of Novi Sad, with arrears of RSD 29.3 billion at the end of May. It is followed by HIP Azotara in bankruptcy, with around RSD 23 billion, and JKP Beogradske elektrane, Belgrade’s district heating utility, with more than RSD 14 billion. This is not a standard portfolio of private-sector late payers. It is a map of Serbia’s public utility system, legacy industrial base and municipal service network.
The case of Beogradske elektrane is especially revealing. Its debt reportedly rose from RSD 5.5 billion in 2025 to RSD 14.2 billion by April 2026, almost tripling within roughly a year. A district heating company with rising gas arrears is not just a debtor; it is part of an urban social infrastructure. Cutting supply, enforcing payment discipline or pushing through tariff adjustments all carry political costs. Delaying those measures, however, transfers the pressure to Srbijagas and ultimately to the state.
The same pattern appears on the electricity side, although the absolute numbers are smaller. Among the largest EPS debtors are Železara Smederevo in bankruptcy, with RSD 6.29 billion of unpaid electricity bills; JP PEU Resavica, with RSD 2.42 billion; AD Politika, with RSD 1.47 billion; and JKP Beogradski vodovod i kanalizacija, with RSD 963 million. The composition of the list is again more important than the arithmetic alone. EPS is not simply chasing households or ordinary commercial customers. It is carrying receivables from bankrupt industrial names, coal-sector entities, public utilities, municipal systems and politically sensitive institutions.
The Politika case adds a further layer to the story. EPS has reportedly become the largest shareholder in AD Politika, with a 27.29 per cent stake and 14.67 million shares. Formally, that may remove or offset part of a debtor relationship from the unpaid electricity ledger. Economically, the question is whether EPS has gained an asset capable of compensating for the unpaid power bill, or whether the utility has simply exchanged a doubtful receivable for an illiquid equity position in a company that no longer owns the daily newspaper most associated with the Politika name.
This is where Serbia’s energy arrears become a governance story. Utilities are not banks, restructuring funds or municipal rescue vehicles. EPS is supposed to finance generation, grid-related obligations, decarbonisation, maintenance and market operations. Srbijagas is supposed to manage supply, infrastructure and gas-system obligations. When these companies become warehouses for unpaid public-sector bills, their commercial functions are diluted. Their financial statements may still show assets in the form of receivables, but the economic value of those receivables depends on collection probability, not accounting recognition.
The debtor structure also raises questions about investment capacity. EPS has recently reported stronger operating results, including a Q1 2026 net profit of around €129 million, but profit and cash collection are not the same thing. A utility can book improved earnings while still facing pressure from legacy arrears, investment delays, procurement needs and rising capital expenditure requirements. Serbia’s electricity sector needs large investment in generation replacement, renewables integration, grid reliability, environmental upgrades and flexible capacity. Every dinar trapped in non-performing receivables is a dinar that cannot be used cleanly for those purposes.
For Srbijagas, the issue is even more sensitive because gas has become both an energy-security instrument and an industrial-policy tool. Serbia’s gas position is tied to supply diversification, storage, pipeline infrastructure, district heating, industrial users and future gas-fired generation. The government has already moved toward reshaping gas-sector structure, including the separation of infrastructure ownership into a dedicated company. But legal restructuring does not remove the basic financial problem if end-users, municipal companies and bankrupt entities continue to accumulate unpaid bills.
The IMF’s language around quasi-fiscal risk is therefore precise. These arrears resemble public liabilities because many of the debtors are themselves public or politically protected entities. A private utility would normally pursue collection, suspend supply, restructure claims under strict terms or impair doubtful debts. A state utility often faces softer constraints. It may continue supply for social, political or municipal reasons. It may wait for a government-brokered solution. It may carry arrears for years. The cost is not always visible immediately, but it accumulates as weaker liquidity, weaker investment capacity and higher eventual fiscal risk.
There is also a fairness issue. Regular-paying consumers, private companies and exporters face tariffs, penalties, tax obligations and market discipline. Public utilities and state-linked debtors, by contrast, can accumulate obligations that would be unsustainable for ordinary commercial users. This creates a distorted payment culture. It weakens the signal that electricity and gas are real economic inputs with real costs. In an energy system moving toward market coupling, carbon exposure, renewable integration and EU-aligned regulation, that distortion becomes harder to defend.
The presence of bankrupt and restructuring entities among EPS debtors sharpens the problem. Eighteen of the 50 largest EPS debtors are reportedly in bankruptcy, liquidation or a pre-arranged reorganisation process. Their combined debt stood at RSD 10.4 billion, more than half of the total debt on the largest-debtors list. This suggests that a meaningful part of EPS’s reported receivables may not be recoverable in full. The issue is not only whether bills are late, but whether some of them are economically collectable at all.
For investors and lenders, this matters because Serbia’s energy transition is increasingly capital-intensive. Renewable generation, batteries, grid upgrades, gas flexibility, environmental compliance and industrial decarbonisation all require bankable counterparties. A utility with political obligations and weak collection discipline can still be systemically important, but it becomes harder to assess as a commercial counterparty. Lenders will look not only at EBITDA, tariffs and state support, but also at receivables quality, payment discipline, tariff cost recovery and the likelihood of political intervention.
The arrears also complicate tariff policy. Serbia has already moved through several rounds of electricity and gas price adjustments in recent years, partly under IMF pressure and partly due to the energy crisis. But tariff increases are only one side of cost recovery. Collection discipline is the other. Raising prices while allowing large public-sector arrears to accumulate creates a credibility gap. It asks paying customers to absorb higher costs while leaving unresolved the losses generated by non-paying or under-paying institutional debtors.
The political economy is difficult. Municipal heating plants cannot be treated like ordinary commercial defaulters during winter. Hospitals and public institutions require continuity of supply. Legacy industrial companies often sit inside broader employment and regional-development concerns. Yet the alternative is a rolling subsidy mechanism disguised as receivables. That mechanism may be politically convenient, but it is financially corrosive.
Serbia’s challenge is to turn the debtor lists from a monthly transparency exercise into an actual restructuring tool. That would require classifying debtors by recoverability, ownership, public-service role and legal status. Bankrupt industrial debt should be separated from active municipal utility debt. Public companies with continuing operations should face enforceable repayment schedules. Municipal arrears should be linked to tariff reform, budget transfers or service restructuring. Claims with low recovery probability should be impaired transparently rather than treated as if they were ordinary receivables.
For EPS and Srbijagas, the issue is no longer reputational. It is balance-sheet discipline. Serbia’s two major energy companies are too important to function as passive creditors to the rest of the public sector. EPS is expected to modernise coal assets, integrate renewables, manage market exposure and support security of supply. Srbijagas is expected to secure gas flows, manage supply obligations and support infrastructure development. Neither mandate is strengthened by carrying billions of dinars in unpaid bills from entities that may never repay on commercial terms.
The reported RSD 143 billion in arrears is therefore more than a debtor statistic. It is a stress test of Serbia’s public-sector financial architecture. The question is not whether EPS and Srbijagas can publish lists of non-payers. They already do. The question is whether the Serbian state is prepared to enforce payment discipline on its own system before those arrears become another fiscal intervention dressed up as energy-sector support.
