Summary sheet
Rehabilitation of several large hydropower plants, construction of a 13 megawatt new hydro unit at the Potpec hydroelectric power plant , development and implementation of greenfield renewables
The operation is a framework loan to finance promoter's key green investments for the period 2024-2030 with a view to increase ultimately the national share of renewables to the target set by 2030. The project tentatively consists of i) the rehabilitation of 239 megawatt (MW) power units in of three hydropower plants (Bistrica hydroelectric power plant (HPP), Potpec HPP and Djerdap HPP) which are totalling 428 MW, ii) the construction of a new 13 MW unit at Potpec HPP, iii) several greenfield renewables of which more than 120 MW solar plants and iv) the rehabilitation of 129 MW Vlasinske hydropower cascade.
The project is a framework loan EPS Green Financing (EIB/20220716) which finances promoter's key green investments in the electricity sector for the period 2024-2030 with a view to increase ultimately the national share of renewables to the target set by 2030.
The financing of the Programme is aligned with the Serbian national targets for security of supply as well as decarbonisation in the context of the Intended Nationally Determined Contributions for Serbia. The project will contribute to EU policy objectives with regards to sustainable energy infrastructure, climate mitigation and it is expected to contribute to a number of Sustainable Development Goals (SDGs). This project is in line with EU priorities for Serbia and eligible under NDICI, as it contributes to climate change mitigation as well as to the development of social and economic infrastructure, specifically energy. The project will primarily contribute towards increasing security of energy supply, a public good.
The project is expected to have a positive economic return, considering the economic value of the electricity generated. Therefore, the project is expected to generate a broader positive social benefit by generating clean and renewable power at a cost (LCOE) reasonably below the cost alternatives in Serbia.
The Promoter has extensive experience in the implementation of hydro power plants projects.
The EIB's financial contribution is substantial and it will include a long maturity, in line with the economic life of the assets and long grace and availability periods, to support the project implementation.
The construction of new hydropower unit would fall under Annex I while the rehabilitation of hydropower units and other small components would usually fall under Annex II of the Environmental Impact Assessment (EIA) Directive 2014/52/EU, amending the EIA Directive 2011/92/EU. The latter Annex II components would require the competent national authority to determine the need for an Environmental Impact Assessment Environmental authorisation has been delivered to Djerdap II HPP rehabilitation. Bistrita HPP was screened out in 2019 by the competent Authorities. The Promoter resubmitted the project to the competent Authority as the scope had slightly increased from the original design. Potpec HPP rehabilitation received its authorisation in 2018. Due to changes in the project (construction of an additional unit IV), the Promoter is carrying out the EIA to be sent to the Competent Authorities in 2024 to obtain the environmental authorisation and the subsequent building permit. Based on preliminary information received, the project components are unlikely to entail any substantial adverse environmental or social impacts. The Bank will review the project's potential environmental and social impacts in line with its Environmental and Social Sustainability Framework upon new allocation request under the framework loan.
The Bank will require the promoter to ensure that implementation of the project will be done in accordance with the Bank's Guide to Procurement and the relevant applicable EU public procurement rules. The promoter Elektroprivreda Srbije (EPS) is a state-owned electric utility company. Public procurement procedures as set in the Bank's Guide to Procurement will apply.
Under EFSD+ Guarantee