Serbia and Romania have signed a memorandum of understanding covering the proposed Djerdap 3 pumped-storage hydropower plant, reviving preparations for one of Southeast Europe’s largest prospective electricity-storage projects.
The two governments will establish joint working groups to exchange technical information and coordinate project development. Serbia expects work on the spatial plan and technical documentation to begin during 2026, while six expressions of interest submitted through an earlier public call remain under review.
The proposed facility would have an installed capacity of approximately 2,400 MW. Current planning envisages an upper reservoir on the Serbian side of the Danube, connected by large pipelines to the existing Djerdap reservoir. Electricity would be used to pump water uphill during periods of low demand or abundant renewable production, with the stored water released to generate power during high-price and system-stress periods.
At that scale, Djerdap 3 would materially change Serbia’s flexibility position. The country is developing a larger pipeline of wind and solar projects but still relies on lignite generation, hydropower and imports to manage variations in demand and renewable output. Pumped storage could absorb surplus production, provide balancing capacity and reduce exposure to expensive evening imports.
The project is also being advanced within Serbia’s Strategic Energy Cooperation Agreement with the United States, giving it a wider financing and geopolitical dimension. Its eventual structure could involve international contractors, equipment suppliers, development institutions and commercial lenders, although procurement, ownership and financing arrangements remain undefined.
Romanian participation is essential because the development would affect the shared Danube system and the operation of the existing Djerdap 1 and Djerdap 2 hydropower plants. Bucharest has indicated that the new facility must preserve navigation, protect riverbank areas in Romania and Bulgaria and avoid disrupting the operational regime of the two existing plants.
These conditions place environmental and hydraulic modelling at the centre of the project. The upper reservoir, pumping cycles and changes in downstream water management will require coordinated environmental assessments and operating rules acceptable to both countries.
Djerdap 3 also faces a demanding financial profile. A 2,400 MW pumped-storage scheme would require several billion euros of investment, a long construction period and revenue streams extending beyond conventional electricity sales. Bankability would depend on a combination of peak–off-peak arbitrage, balancing services, capacity value and potentially regulated system-support payments.
The project’s size gives it strategic value, but also makes phased technical development indispensable. Spatial planning, geological investigation, hydraulic modelling, grid studies and an agreed cross-border operating framework will need to advance before a credible CAPEX envelope and investment decision can emerge.
