In just a year and a half, the value of construction works on the Reversible Hydro Power Plant “Bistrica” has doubled. Initially, it was announced that 560 million euros would be invested in this project, but recently, Minister of Mining and Energy Dubravka Đedović Handanović stated that this investment will amount to as much as 1.2 billion euros.
In Serbia, it is not uncommon for the prices of infrastructure projects to significantly increase within a few years. This seems to be the case with the construction of the Reversible Hydro Power Plant “Bistrica”, a project that government representatives and Elektroprivreda Srbije (Serbian Power Utility) proudly promote.
Its implementation was initially planned in 2012 when a Memorandum of Understanding was signed with the Canadian company “Lavalin” and the Chinese company “China Nuclear Power Engineering.” However, it was set aside until 2021, following a major accident in EPS (Electric Power Industry of Serbia), when it was once again brought to the forefront.
The cost of building this hydroelectric power plant was first discussed in mid-2022 when the Ministry of Construction, Transport, and Infrastructure announced the planned investment amount of 560 million euros. However, by June 2023, the Ministry of Mining and Energy released a new value for the construction works, which, of course, was higher – 835 million euros.
It became evident that the construction of “Bistrica” would not be as “inexpensive” on January 23 of this year. At that time, Minister of Energy Dubravka Đedović Handanović stated that the project would cost as much as 1.2 billion euros. President of Serbia Aleksandar Vučić had also mentioned a similar figure earlier.
It appears that in just a year and a half, the cost of the project has increased by 625 million euros or 114 per cent. We asked the Ministry how this is possible.
In their response to “Nova,” the Ministry stated that the initial estimate from the Ministry of Construction, Transport, and Infrastructure was based on existing studies, assumptions, and values that were over 10 years old, “but without taking into account the necessary accompanying infrastructure.” Additionally, they mentioned that the costs of financing construction, consulting, supervision services, and insurance were not taken into consideration.
“Due to changes within the project, alterations in the plant’s position, the selection of more modern technologies, accompanying surrounding and access infrastructure, as well as inflationary trends, the feasibility study, which will soon be available for public review, has revealed the realistic costs and benefits. In comparison to the old estimates, the price has indeed increased, but it is within the framework of existing values and price trends in hydro energy for such types of facilities. The feasibility study is the only relevant source to answer questions about costs, and it has just been completed, so precise information on investment values did not exist a few years ago,” added the Ministry.
At this moment, it is not known when the construction will begin or who will be the contractor. Minister of Energy Dubravka Đedović Handanović has mentioned that this year is crucial for technical documentation. After a meeting with the Japanese Ambassador Akira Imamura, she stated that the Japanese are interested in financing this project.
“The Japan International Cooperation Agency (JICA) is interested in financing this project, as well as numerous Japanese companies that have the knowledge and state-of-the-art technology for such facilities,” said Đedović Handanović.
As announced, when completed, the Reversible Hydro Power Plant “Bistrica” will inundate 324 hectares of land along the Uvac River. It is expected to have a height of up to 90 meters, a maximum width of 10 meters, and a length of up to 230 meters.
The Reversible Hydro Power Plant (RHE) is equipped with pumps that, using electricity generated from renewable sources, pump water into the upper reservoir. This allows the hydroelectric power plant to function as a massive “battery” for green energy.
RHE Bistrica will have four units with a capacity of 157.1 megawatts each, totalling 628 megawatts. This positions it among the most significant energy facilities in the country and a key player in enabling broader applications of green technologies in Serbia. The dam is expected to be constructed in the coming years.
The power plant will have a total capacity of 656 megawatts.