Serbia: Chinese investment in TPP TEKO Kostolac

Published on 19. December 2014., News Serbia Energy

The most important chapter in the development of Thermal Power Plants and Mines “Kostolac” began thanks to a partnership with the Chinese company China Machinery Engineering Corporation – CMEC. International credit arrangement, worth more than a billion dollars, has enabled the transformation and modernization of the company.

Within the first phase of an international loan agreement with Chinese partners, besides the revitalization of Unit 1, Kostolac gets a modern system for flue gas desulphurization, port and railway. Completion of desulfurization is expected in late 2015^th. Unit B1 is in its final stage and it is expected the electricity production to begin on December 20^th. Revitalization of this unit will reduce the emissions that will contribute to reducing the environmental pollution. The turbine has arrived from “Alstom”, while the Chinese partners are engaged in the boiler plant. The contractors on the mills modernization are the companies “Feromont”, “Hitachi” and “Minel kotlogradnja”. In addition to the Chinese company CMEC and their subcontractors “Dalian” and “Jiangsui”, the Chinese partners have also hired several companies from Serbia.

Second phase of the loan should enable the construction of a new thermal power plant of 350 MW and capacity expansion of the open pit “Drmno” from 9 to 12 million tons per year. The value of these projects amounts to approximately 715.6 million dollars. In November last year was signed a contract for the second phase, and at the end of last year, it was filed an application to the Exim Bank for a loan under preferential terms. The loan is granted for 20 years according to preliminary conditions, with a seven-year grace period and an annual interest rate of 2.5 percent for the Chinese national Exim Bank.

According to plans, the new unit B3 will be built 58 months and should be put into operation in 2019^th. The project is of great importance for the Electric Power Industry of Serbia, but also for SC TE-KO “Kostolac”, because after three decades it will be the first energy building with more power and first thermal power unit built in the country after a long time. The new unit should be built according to all the latest EU standards, where will be installed modern equipment of known manufacturers in the world, and in particular will be taken care that a new unit be safe from the standpoint of environmental protection.

Chinese Ambassador in Belgrade Li Manching has recently announced that an agreement on joint reconstruction of Unit 2 in the thermal power plant “Kostolac” would be signed in December of this year, during the visit of Chinese Prime Minister Li Keqieng to Belgrade.