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Serbia’s Power Purchases Will Make Renewable Projects Bankable

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July 15 (Bloomberg) -- Serbia will offer investors new power purchase agreements beginning next week, unlocking potential for investments in renewable energy generation units.

The Balkan nation expects investments of about 2 billion euros ($2.6 billion) in wind farms, biomass, waste, solar, gas and geothermal energy as it plans to add 1,092 megawatts of energy from renewable sources by 2020, Energy Minister Zorana Mihajlovic told reporters in Belgrade today.

The power purchase agreements, defined with international financial institutions to make sure they qualify for bank loans, will mark “a big step in opening the market to independent producers,” Mihajlovic said.

Serbia aims to increase the share of renewables in its energy mix to 27 percent by the end of the decade from 21.2 percent, under an agreement with the Vienna-based Energy Community.

The government adopted in February new incentives to purchase electricity from renewable sources at higher rates, pledging to subsidize 500 megawatts of electricity from wind farms, 440 megawatts from most hydro plants and 100 megawatts from biomass-fuelled facilities.

The new regulations will allow the Serbian Wind Energy Association, grouping companies interested in wind farms, to start several projects they prepared, worth “more than 500 million euros,” said Ana Brnabic, project director at the Continental Wind Serbia, which is member of the association.

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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