Serbian Parliament says yes to KfW loans to EPS and EMS

May 25, 2017

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Serbian Parliament says yes to KfW loans to EPS and EMS

Serbian Parliament has approved laws on Government’s guarantees for loans which German development bank KfW accorded to the state power utility Elektroprivreda Srbije (EPS) and state-owned transmission system operator Elektromreža Srbije (EMS).

EPS will receive EUR 45 million loan from KfW to finance modernization of ash transport system in Thermal Power Plant Nikola Tesla A (TENT A), while the loan for EMS in the amount of EUR 15 million is intended for the implementation of the regional energy efficiency program in transmission systems.

The loan repayment period is 12 years including the grace period of five years for EPS, and three years for EMS with the interest rate of 0.8 percent per annum.

Serbian Minister of Finance Dušan Vujović earlier said that EPS and EMS will repay the loans by themselves and that there will be no repayments from the state budget.

Better environmental protection of the biggest power plant

EPS and KfW Bank signed in February the Loan Agreement worth EUR 45 million with aim to improve the environmental protection in Serbia.

The loan will be used for reconstruction of ash transport system in the biggest EPS’s thermal power plant TENT A. The project should also contribute to better air quality as the ash from the power plant would not be dispersed by the wind. It should also contribute to the protection of underground water, river Sava and soil from pollution.

KfW Director for Southeast Europe and Turkey Christoph Tiskens said in February that the portfolio for Serbia which KfW implements on behalf of the German Government, amounts to EUR 1.7 billion.  Two thirds are dedicated to the energy sector according to Tiskens, who added that EPS with the EUR 350 million worth portfolio is the major loan beneficiary.

More energy savings in transmission system

EMS signed in March with KfW EUR 15 million Loan Agreement for the construction of Kragujevac-Kraljevo section of Trans-Balkan corridor.

An agreement on a EUR 6.5 million donation under the Investment Framework for the Western Balkans (WBIF) was also signed. The remainder of the needed funds will be provided by EMS. Overall cost of the regional energy efficiency program in transmission systems is estimated at EUR 29.6 million.