Serbia: Parliament approved KfW loans to EPS and EMS

, News Serbia Energy

Serbian Parliament approved the issuance of state guarantees for loans, which German Development Bank KfW will provide to state-o0wned power utility EPS and electricity transmission system operator EMS.

In March, EPS and KfW Bank have signed a loan agreement in the amount of 45 million euros, for the improvement of environmental protection in Serbia. The loan is intended for financing the modernization of ash transportation system at thermal power plant Nikola Tesla A. The realization of this project will provide EPS with a reliable system for depositing ash, slag and plaster from all units at TPP Nikola Tesla A and will improve environmental protection conditions. The repayment period of the loan is 12 years, with a five-year grace period.

The project for the modernization of TPP Nikola Tesla A also includes a steam turbine retrofit and commissioning of upgraded equipment that will increase the plant’s power output, reduce operational and maintenance costs and lower the plant’s emissions through lower coal consumption. The steam turbine retrofit should start in May 2017, while commissioning of upgraded equipment is expected in October same year.

Shortly afterwards, EMS has signed an agreement with KfW Bank on a loan for the construction of a part of Trans-Balkan corridor, namely KragujevacKraljevo section. The loan worth 15 million euros will provide funds for the second section of the first phase of Trans-Balkan corridor construction in Serbia. The loan repayment period is 12 years, with a grace period of three years, while the guarantees are provided by the Government of Serbia. At the same time, an agreement on a grant of 6.5 million euros under the Investment Framework for Western Balkans (WBIF) was also signed. The remainder of the funds needed for the construction of this section will be provided by EMS.

The aim of Trans-Balkan energy corridor project is to connect Northeastern and Southwestern parts of Europe, namely Romania to Italy via Serbia. The corridor will connect Eastern European countries which produce electricity with consumers in Western European countries. Its length is over 150 kilometers and it is estimated that the first phase of the project would cost about 150 million euros.