Serbia: Ministry adopts RES project Power Purchase Agreements and Preliminary Power Purchase Agreement

29. July 2013. / News Serbia Energy

The Serbian Ministry of Energy finally adopted the official model Power Purchase Agreements (PPA) and Preliminary Power Purchase Agreement (Preliminary PPA), based on which privileged power producers will be able to utilize incentives for green electricity (i.e. the feed-in tariff) on 16 July 2013.

The PPA and the Preliminary PPA have been adopted months after the first drafts were prepared and published by the Ministry in March this year. Months of vivid discussions amongst stakeholders to get the best possible models (specifically in terms of bankability) took place. Even though these model agreements represent a step forward compared to the previous solution, the first impressions are that they do not address the main concerns of financiers and investors in the sector. The main reason for this is the fact that laws and regulations themselves (which regulate the content of the PPA and the Preliminary PPA) are such that they do not provide for optimal solutions to investors and that consequently the model agreements cannot fully meet investors’ needs at this moment . The Ministry of Energy earlier announced changes in the regulatory framework in the renewables sector by the end of 2013, and hopefully, this will lead to more bankable model agreements.

It is yet to be seen how this will impact the development of new green projects and whether Serbia will be able to reach its targets for green energy in gross consumption by 2020 (from the current 21% to 27%) with the current system of incentives and the new model agreements.

The PPA and the Preliminary PPA were published in the Official Gazette of the RS no.62/13 from 16 July 2013.

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