Serbia: Power utility EPS re-analyzing deal with China CMEC on new TPP Kostolac unit?

18. May 2015. / News Serbia Energy

Although the Serbian Parliament confirmed the Chinese credit for new unit at TPP “Kostolac” in January this year, power utility EPS continued to review whether it is cost-effective project of Chinese company “CMEC” and TPP “Kostolac” worth 608 MEUR.

EPS Director Aleksandar Obradovic continues to analyze whether it is worthwhile to build a new energy unit in TPP “Kostolac”, which is a job that the Government has contracted long ago with the Chinese.

Although the Serbian Parliament confirmed the Chinese credit for “Kostolac” in January this year, the head of EPS continued to review whether it is cost-effective project of Chinese company “CMEC” and TPP “Kostolac” worth 608 MEUR.

This should be the first major energy facility in Serbia after two decades, so the question is why does Obradovic doubt in it for the second time, and what could be the motives for the new analysis.

According to daily “Blic”, the company “Energoprojekt Entel” has done two studies titled” Financial feasibility analysis of unit 3 in TPP Kostolac” in March and April 2015th.

In the first study that source close to the Ministry of Energy submitted to “Blic” are indicated five items that justify the project – from the fact that the power system needs additional energy, and that the new unit ensure a safer electricity supply, but lower imports and higher exports energy .

In another study drafted only a month later EPS tested again investment and how to navigate the dollar exchange rate compared to the euro. Obradovic started from the fact that the project would be the most funded by loan in dollars and that EPS would make profit by export electricity in euros.

If something is wrong, the evidence is that in EPS, but also in the relevant ministry denied that EPS looked a creation of a new feasibility study of new unit building, though “Blic” has studies from March and April 2015th.

– If EPS wanted the new study, it would announce the public procurement. It was agreed with MMF that EPS reviews all investment projects and actualizes them. EPS meets all deadlines in the implementation of the second phase of “Kostolac B”, but Obradovic and EPS management do everything that the project is progressing according to plan – claim in EPS. They add that the construction of a new unit in Kostolac is very important and that it ensures the energy system stability. We have received almost identical response from the minister Aleksandar Antic.

– There is a new study. The plan drafting for EPS financial consolidation is underway, which is being coordinated with MMF, the World Bank and EBRD. One of the requirements is to do the upgrading of all investments implemented by EPS, including “Kostolac B3”. The realization of the contract with “CMEK” is going according to plan – said Antic.

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