SEE/Serbia special report: Chinese energy investments in Serbia and in the Balkans

25. July 2014. / News Serbia Energy

The Chinese show more and more interest in investing in the energy sector of the Balkan countries. The Chinese economy represents the most influential economy in the world. The report covers the market actors from China, their targeted projects and brings closer the strategy of the China energy companies market penetration in the Balkans which lacks financing for the needed new power generation. Are the Chinese preferred or easiest partners for the construction of needed new environmental friendly power generation projects. Beside the conventional projects of coal fired power plants, in which Chinese companies managed to penetrate with financing and contractors work, the Chinese financing is also starting the projects in HPP and other RES areas.

In Serbia at the moment one of the biggest energy projects is being implemented, and that is the construction of the new power unit in TPP „Kostolac“. The Contract with the Chinese Company CMEC on construction of the new TPP and on expansion of the coal mine “Drmno”was signed, at the end of last year. The value of the contract is 715.6 million EUR. After more than 25 years, the new Power Unit will be constructed in Serbia. According to the plan, it should be put in operation in 2019. Beside the construction, the rehabilitationand desulfurizationof the Power Units “B1” and “B2” are planned. The Contract has been concluded within the Agreement between China and Serbia on economic and technical cooperation in the field of infrastructure.

The Chinese Power Company Sinomach-Cneec-cneetcopened its Europe-based head office in the town of Ub,early this year. On that occasion, the representatives of the Chinese Company stated that they were interested in investing in the large power projects in Serbia – TPP „Kolubara B“, opening of the OPM „Radljevo“, HPP „Djerdap 3“, as well as in the small hydro power plants.

At the end of the last year, Cooperation Agreement between the Ministry of natural resources, mining and spatial planning of Serbia and NR of China was signed, thereby creating the platform for the further cooperation in the field of mining-geology surveys and investing in the further mines exploitation. The Chinese Company BETEC is going to execute the works.

Chinese Companies show great interest in investing into the energy sector of the Republic of Serbia. During the last couple of years, the Chinese are interested in both construction of the new TPPs and construction of the Hydro Power Plants that would beimmeasurably significant for the power system of Serbia.

The construction of TPP “Pljevlja“ in Montenergro has been negotiated for several years. One of the possible strategic partners are the Chinese or better to say the Chinese Company Hubei Power China. They are prepared to invest 275 million euros in this Project. The investment is related to the construction of the new Power Unit and expansion of the coal mine capacity.

In Beijing, in September 2012, the Contract on the construction of HPP “Ulog“, to be located at the upper course of the river Neretva according to the model EPC (engineering, procurement and construction), between the representatives of the EFT group and the Chinese energy consortium (SINOHYDRO Corporation Ltd, DONGFANG Electric and Chinese development bank) was signed. EFT group has obtained the right to concession of the electricity exploitation on the locality of the upper course of the river Neretva, where the HPP“Ulog“ is to be built. The total investment value of the project is 60 million EUR.

In Bosnia and Herzegovina, in the middle of last year the construction of TPP „Stanari“ of the capacity 300 MW has started. Along with the modernization of the coal mine „Stanari“, connection to the transmission network, building of the supporting facilities and infrastructure, about 600 million EUR is going to be invested into this project. Eighty percent of the money necessary for building the TPP is provided from the loan of the Chinese development Bank, and the rest 20 percent were gained by the Company „EFT“ group and the consortium of commercial Banks. The implementation of this Project has started in 2005. This TPP will be the first energy plant in Bosnia and Herzegovina that is going to operate in accordance with the directives of the EU (2001/80/EC) on environmental protection.

The Chinese have applied as potential strategic partners for one more project in Bosnia and Herzegovina, and that is the construction of the Power Unit No 8 in the TPP “Kakanj“. Total value of the investment amounts 600 million EUR. It was announced recently in the media, in Bosnia and Herzegovina that China was the only bidder for the construction of the Power Unit 7 in TPP “Tuzla”.

In 2012, the Chinese were interested in investing in the Zenica gas Power Plant. In the end, there has not been cooperation with the Chinese on this Project.

The Chinese Companies were interested in realization of the Project TPP “Plomin C“ in Croatia. The Croats have in the previous period counted on the RWE from Germany as a partner, but the Germans did not give any offer.The Croatian authorities have not decided yet who is going to be elected as the strategic partner for the Project realization.

At the start of this year, the Chinese Company CMEC showed interest in construction of the Nuclear Power Plant in Osijek. The investment value of the Project is 500 million euros.

Western Balkans Region has the greatest potential for the development in Europe. Through the investments of the strategic partners, the power sector in the Region could improve much and that would be of great importance for the energy stability of these States.

Current situation is such that the Chinese investments are dominant in planned energy projects.

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