The Supervisory Board of the “Electric Power of Serbia” has approved a long-term loan of 608.26 million dollars for the implementation of the second phase of the project “Kostolac B”.
The works on the construction of the new block B3 in the Thermal Power Plant “Kostolac B” with the capacity of 350 megawatts will be financed from this loan, as well as the expansion of capacity of the Open Pit Mine “Drmno” from nine million to 12 million tons of coal annually, it has been announced in the EPS.
The Serbian Government, the Ministry of Mining and Energy and the “Electric Power Industry of Serbia” have been complying with all deadlines in the implementation of the Second Phase of the Project “Kostolac B”, it is added in the statement.
This Loan Agreement was signed by the Serbian Government and the Chinese “Eksim” bank on 17th December 2014, it was ratified by the National Assembly of the Republic of Serbia on 19th January 2015, and now, the loan will also be placed at the disposal of the EPS.
One of the conditions for the Loan Agreement to come into force is also the conclusion of the Loan Transfer Agreement according to the Draft Agreement adopted by the Serbian Government on 17th February 2015.
The loan conditions are very favourable, the loan repayment time is 20 years, with a seven-year grace period and the stipulated interest rate of 2.5 percent annually. The Chinese loan will cover the funding of 85 percent of value of the project for constructing the block B3 in the TPP “Kostolac B” and the expansion of capacity of the mine “Drmno”, and the project is worth 715.6 million dollars.
The deadline for constructing the block B3 is 58 months, and the new block should be connected to the electric power grid as of 2020. The whole project is a part of the Agreement on Economic and Technical Cooperation in the Field of Infrastructure between the Government of the People’s Republic of China and the Serbian Government.
After the several-decade long halt in the construction of electric power facilities in Serbia, the construction of the third block in the TPP “Kostolac B” is very significant both for the EPS and for the Serbian energy sector. In addition to the fact that the construction of the new block will provide stability for the Serbian energy system, the fact that the project envisages compliance with all energy standards of the European Union and Serbia, particularly within the field of environmental protection, is very important.
