Serbia: Wind park investments to restart after new decree on incentive measures

, News Serbia Energy

New Decree on incentive measures for electricity generation from renewable energy sources brings greater safety and predictability to investors

This Decree on incentive measures for electricity generation from renewable energy sources, which was recently, after a year and a half, adopted by the Government, finally gave green light to the potential investors to start with the generation of green kilowatts in Serbia.

The Decree foresees the contracts between Electric Power Industry of Serbia, investors and banks, which would bring our country the investment of billion euros in the following year.

Most investors have no comment to the new decree

What is interesting is that the most of the companies that have received energy license from the Ministry of Energy for the construction of wind farms, biomass or biogas-fired power plants, did not want to comment the new decree adopted by the government. MK Group stated that for now they do not have comment.

The new document provides greater security and predictability within Power Purchase Agreement, which is the prerequisite for the job, and that was not the case in the past, says Ana Brnabić, General Manager of the American company Continental Wind Serbia, which is potentially the largest investor in the construction of wind farms.

– The purchase prices of electricity from renewable sources were not increased by this new decree. On the contrary, they were even reduced for some new technologies for green kilowatts generation, while they remained the same for the others – she emphasizes and adds that negotiations with the banks that could finance up to 70 percent of total projects will be conducted.

She explains that if the banks would approve the loan, Continental Wind Serbia could start with the construction of Čibuk wind farm in Kovin next year. Out of EUR 290 million worth investment, 150 million would end up in the Serbian budget.

– At the same time, Serbian companies engaged for the construction of this wind farm with 57 wind turbines, would earn about EUR 55 million and employ about 400 employees. The Municipality of Kovin plans to earn about EUR 10 million. The companies that would maintain this wind farm could earn about 15 million euros –explains our interviewee.

Therefore, the case is that all is up to banks now – whether they wish to finance these projects whose biggest proponents were EBRD and the American investment fund.

Lazar Lazendić, project manager for the wind farms Alibunar 1 and Alibunar 2, in Belgian-Dutch company Wind Vision, operating in eight countries, says that newly adopted decrees on conditions and procedure for acquiring the status of privileged electricity generator, and on incentive measures for electricity generation from renewable energy sources, as well as the Decree on electricity purchase with its model contract, represent the final legal framework for factual development and implementation of energy projects from the field of renewable energy sources.

– Our company in Serbia is developing and is intending to invest into energy facilities for electricity generation that use the energy of wind and biomass as primary resource. The main advantage for the potential investors now is that the relationship between electricity generator from renewable energy sources and Serbian power system is finally clearly legally defined – says Lazendić.

He points out that the set of newly adopted decrees clearly defines the path of development and construction of energy facilities as well as, he hopes, sufficient level of long-term predictability and profitability of investment.

– It remains for the creditors of the projects from renewable energy sources – international financial institutions – to give their final opinion and confirm the sufficient level of safety of investment and thus open the development of power sector in this field in Serbia – explains our interviewee.

The fact is that beside these companies, others also intend to generate clean energy in Serbia, therefore, already 500 megawatts of capacities were reserved by 15 companies. NIS and the former Minister of Energy Goran Novaković would construct wind farm Plandište. Wind farm in Kovačica of 105 megawatts capacity would be constructed by Electrawinds K-Wind, while the joint venture of Miodrag Kostić and Italian partner has total of 83 megawatts on three facilities, including the well-known wind farm in Kula and in the vicinity of Vršac.

It is important for the investors that the banks have direct contracts with EPS, in the event that the investor for some reason fails in this job, transmits