Bloomberg News

Serbia’s EPS, Shenzhen Energy Plan EU2 Billion Projects

October 20, 2011

(Adds involvement of China Environmental Energy in first paragraph.)

Oct. 20 (Bloomberg) -- Elektroprivreda Srbije, Serbia’s power monopoly, agreed with Shenzhen Energy Group Co. and China Environmental Energy Co. to develop a thermal plant, a coal mine and renewable energy projects in the Balkan country.

Adding a 744-megawatt power-generating unit to Serbia’s Nikola Tesla thermal plants complex, opening a nearby coal mine and developing separate facilities that will use biomass as fuel will cost more than 2 billion euros ($2.75 billion), said Dragomir Markovic, the general manager of the Serbian company also known as EPS.

“A financing agreement may be reached in the first quarter of next year,” after which it would take five years to complete the projects, Markovic said after signing the cooperation protocol with Zimin Gao, chairman of the Shenzhen Energy Group.

Serbia’s state-run power producer has sought investors and project partners as it prepares for a market liberalization over the next three years. Serbia changed its energy law in July to adapt it to the European Union, which it aspires to join.

The Chinese companies will be majority owners in a planned joint venture that will handle the projects, Markovic said, without specifying stakes.

An EPS tender seeking a partner for a third unit at the Nikola Tesla B plant failed earlier this year, after which the company said it would find an investor in direct talks.

--Editor: James M. Gomez, Andrew Atkinson

To contact the reporter on this story: Misha Savic in Belgrade at msavic2@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net


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