Republika Srpska: JV EPS-ERS-Secci 321MW Middle Drina HPPs, electricity for export to Italy says ERS CEO Milekic

Published on 22. October 2013., SEE Energy News

Inclusion of a strategic partner in the “Middle Drina” is not a sale of natural resources in the Republic of Srpska, but the best way to achieve this demanding job, said the director of “Electric Power Industry of the Republic of Serbian” / ERS / Branislava Milekic. She stated that it is an investment of 870 MEUR, which includes the construction of three hydroelectric power plants, and that the project should be completed by 2020.

The project would be jointly implemented by the government of the Republic of Srpska and Serbia, with a strategic partner – Italian Government, the company “SECI energy”, and the condition would be that the electricity is exported to Italy.

“It is about an energy that is much more expensive. Would we have had a stable market with high prices and it would show the profitability of the project,” explained Milekic.

She said that this is a great opportunity to engage a strategic partner that provides market for 15 years at a price of 155 euros for one megawatt hour of electricity, and that a refund would certainly be allowed at that time.

In this project, the Italian partner would have 51 per cent, and the Republic of Serbian and the Serbia equally 49 per cent.

Milekic points out that this way of project realization does not mean selling, but it is about common usage of one resource that is unexploited and which “Electric Power Industry of Republic of Serbian” / ERS / and “Electric Power Industry of Serbia” / EPS / would not be able to use without a strategic partner, who would primarily provide the market.

She said that the project “Middle Drina” is a system of three hydroelectric power plants, which are foreseen according to current technical solution in the area between Bajna Basta and Visegrad, with a total installed capacity of 321 MW and an annual production of 1,196 gigawatt hours of electricity.

“Bearing in mind that the Drina River is a border between the Republic of Serbian and the Serbia, it was necessary that they jointly participate in these projects, and the inevitable factors are also two neighboring electric power industries,” says Milekic.

She recalled that the cooperation of the Government of Serbia with the Italian Government in the energy sector started in 2009 and the agreement is verified in the Serbian Parliament last year.

According to Milekic, the Government of Serbia has defined EPS as a strategic partner for the project, while the Italian government as a strategic partner appointed company “SECI energy.”

“ERS and EPS have been signed agreement with a company SECI energy with the consent of the government in 2011, and with the intent to develop a joint project Srednja Drina in order to placed production of electricity from renewable energy sources in the Italian market,” says Milekic.

She notes that the price at which the production companies of ERS sell electricity to distribution companies with purpose of supplying consumers in the Republic of Serbian is 27.7 euros, while the market price is about 50 euros.

This shows, says Milekic, that it is a cost of electricity that is at this point three times higher than those that can be achieved in the electricity market.

“The project Srednja Drina is expensive investment that allows the price of electricity to be competitive in the region, given that we have a price that is very low in the region,” says Milekic.

She points out that inducement that gave Italy would allow this project to be economically feasible and that would be a shame if it does not remain within these incentives, ie within the first 1,000 megawatts of the contract between Serbia and Italy.

As for the “Gornja Drina,” says Milekic, Serbian Government will decide whether to go into further strategic partnership or will build in some other way.

Source; Serbia Energy See desk