In Belgrade, on May 3, 2012: Following the signed Interim Cooperation Agreement with EPS on the development of the Kolubara B project in June 2011, Edison Spa (Italy) and Elektroprivreda Srbije (EPS) have signed the Mandate Letter with the European Bank for Reconstruction and Development (EBRD). The EBRD is considering arranging financing of up to €400 million to the Project Company.
The EBRD is at the preliminary stage of considering the financing for the construction of the new 750 MW Kolubara B lignite fired power plant in central Serbia that would replace a number of obsolete power generation units in the country. As a signatory to the Energy Community Treaty, Serbia is committed to comply with EU environmental standards for the energy sector by the end of 2017.
EPS, the Serbian state owned power utility, is actively working to rehabilitate and improve existing power plants to ensure that they comply with the EU's environmental standards by this deadline, but a number of plants will have to be closed. The Serbian government and EPS therefore initiated a tender process to select a private investor to construct, finance and operate 750 MW of replacement capacity at the Kolubara B site next to the Kolubara lignite mining basin, 40 km from Belgrade.
The Project will be the first significant private sector investment in Serbia's power generation sector. The Project will set a template both for further private investments in the power sector and more widely for private involvement in public infrastructure in Serbia. The Project will result in reduced carbon intensity of Serbia's generation and therefore avoided greenhouse gas emissions. It will set a benchmark for the renewal of Serbia's and the West Balkans' generating infrastructure.