Prime Minister Ana Brnabić said no one has the right to blame the Government of Serbia for not hiring professional management to run state-owned power utility Elektroprivreda Srbije (EPS) earlier. The ruling Serbian Progressive Party (SNS) has initiated positive changes in the company and in the entire energy sector, she added.
The idea of introducing professional management in state-owned company Elektroprivreda Srbije appeared after a leak revealed a secret contract between the Serbian government and Norway-based Rystad Energy on consulting in the energy sector. As a reason for hiring consultants, the government cited the energy crisis, which escalated in December 2021 with a series of simultaneous breakdowns in Serbia’s coal-fired power plants.
After more than two months, there is very little official information about the cooperation.
Brnabić: The golden age of investment for EPS
Responding to criticism for not introducing professional management in EPS earlier, Prime Minister Ana Brnabić. She rhetorically asked her political opponents which power plant they ever started to build.
Brnabić stressed that investments in Serbia’s energy sector began during the reign of SNS, which has been the leading party in all governments since 2012. Compared to the company’s previous management, this is the golden age of investment for EPS, she added.
Brnabić noted that Serbia started the construction of the first large energy facility in 31 years – the Kostolac B3 coal-fired power plant, stressing that it would be completed next year.
She announced that a new energy policy would be implemented, with investments of EUR 12 billion in the green transition. It includes cooperation with Norwegians, the prime minister said and underscored that they are “the best in the world.”
Demostat: Foreign partners do not trust domestic management
In the absence of official information, unofficial information appears, so the Demostat website reported that the Norwegian partners proposed a management services agreement model where government-controlled energy companies in Serbia would be run by foreign professional management.
Financing is necessary for the recovery of energy companies such as EPS and Srbijagas and the construction of new power plants.
Foreign partners are ready to help, but they have no confidence in the previous local management, which was often been appointed under the heavy influence of ruling parties, Demostat reported.
Vučić: We will listen to the Norwegians
Serbian President Aleksandar Vučić said during his visit to Norway a few weeks ago that Serbia would heed the advice of Norwegian experts on introducing changes in the energy sector because, as he put it, Serbia does not know how to do it.
After the system is stabilized, the authorities will focus on environmental protection, even though coal will be needed for electricity production for another 20 or 30 years, he asserted.
Privatization is also in the pipeline?
The cooperation with the Norwegian consulting company Rystad Energy was also interpreted as part of preparations to privatize EPS. The rumors have been strengthened by the official request of EPS to transform into a joint stock company.
According to Vučić, Serbia’s goal should be for EPS to be listed on a stock exchange one day, in London for example, so that it becomes a better company. “I guess our goal is to attract investments by selling 3% to 5% of EPS,” he told RTS.
Asked whether any shares in EPS would be sold, he said no such decision has been made, but that conditions must be created for a stock exchange debut. Vučić added that Serbia would always hold a majority stake.
Minister of Mining and Energy Dubravka Đedović denied any plans to privatize EPS.
Đedović: Norwegians learned from Americans
She explained there were discussions with the Norwegians about their government’s majority ownership in the energy sector. They learned from Americans 30 years ago, and now there are Norwegians in the professional management in domestic companies, she said.
When the government negotiates on sensitive matters, it classifies what will be secret and what will be public, Đedović underscored. She said Serbia has been working together with the Norwegians for six months and that the first results are expected by March or April.