Serbia Will Seek Chinese Funding to Expand Kostolac Power Plant

Serbia plans to apply for a Chinese government loan to add a new unit to its Kostolac power plants and expand a coal mine that feeds it, the premier said.

The project worth $700 million may be financed from a $10 billion fund that China earmarked for investments in 16 countries of central and eastern Europe, under “preferential terms of financing,” Prime Minister Ivica Dacic said in a statement e-mailed after his meeting with China Machinery Engineering Corp. officials in Belgrade yesterday.

The 640-megawatt plant in the Kostolac power generation complex is owned by Elektroprivreda Srbije, Serbia’s state-run utility, which wants to add a 350-megawatt unit to the two plants at Kostolac B and increase coal production from the nearby Drmno field to 12 million tons a year from nine million tons.

China Machinery Engineering is already involved in an upgrade of two plants at Kostolac B, supported by a $344 million 20-year loan from the Export-Import Bank of China, or Exim Bank.

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