Elektroprivreda Srbije, Srbijagas, and Azerbaijan’s state-owned energy company SOCAR have signed the shareholders’ agreement regarding the development of a combined-cycle gas-fired power plant project in Niš in southern Serbia.
The agreement, which entails the establishment of a joint venture, was signed today by the CEOs of power and natural gas utilities Elektroprivreda Srbije (EPS) and Srbijagas, Dušan Živković and Dušan Bajatović, respectively, and Elchin Ibadov, the Advisor to the President of SOCAR for Development and Portfolio and CEO of SOCAR Turkey.
In the joint venture, 50% ownership will belong to the domestic companies, and 50% to the Azerbaijani partner. The agreement defines their rights and obligations, joint management, unanimous decision-making on key issues during the project’s preparatory phase, as well as the financing of development activities, according to the Ministry of Mining and Energy of Serbia.
The signing ceremony was attended by Acting Minister of Mining and Energy Dubravka Đedović Handanović and Ambassador of the Republic of Azerbaijan to Serbia Tahir Tagizade.
Đedović Handanović: Gas serves as a transition fuel in the energy transition
“Given that the gas power plant project in Niš is already in an advanced stage of preparation, establishing a joint company, the next step following today’s signing, will enable even more efficient and robust cooperation in preparing for the construction. This energy facility is vital for our electricity generation, system balancing, and attracting investment to southern Serbia,” Đedović Handanović said.
Implementing such large and complex energy projects requires strategic partnerships, and presidents Aleksandar Vučić and Ilham Aliyev have established a strategic partnership between Serbia and Azerbaijan, she added.
Thanks to this cooperation, there is now a clear connection between three vital systems – international energy partnership, gas supply, and power generation, she added.
“It is a solid foundation for developing a project of long-term importance for Serbia, primarily due to growing electricity consumption and the need for cleaner energy sources, which gas is, compared to coal and heavy fuel oil, and it serves as a transition fuel in the energy transition process,” the minister pointed out.
Živković: The feasibility study is underway
The Ministry of Mining and Energy said that the priority in the coming period is to complete all necessary technical, economic, and study analyses, as the plan envisages the construction of the gas power plant to be finished within the next four years.
The pre-feasibility study has been completed and the spatial plan of the city of Niš adopted, while contracts have been awarded for planning documentation and the grid connection study, project designers were hired, and work has been initiated on the feasibility study and technical documentation, EPS CEO Dušan Živković noted.
“In an era of the energy transition and greater and escalating global challenges, new energy and new megawatts are imperative. EPS is determined to ensure energy security and diversify its sources, and use gas as a transition fuel. We have been actively working on the project for months with a clear objective of building a highly efficient 500 MW combined-cycle gas plant,” Živković stressed.
Ibadov: Once preparatory work is complete, our goal is to reach a joint investment decision
Advisor to the President of SOCAR for Development and Portfolio and CEO of SOCAR Turkey Elchin Ibadov stressed that the signing builds upon the intergovernmental agreement and reflects the friendship the two countries have developed through their energy partnership.
“This agreement enables SOCAR and EPS to jointly develop a cogeneration facility in Niš. Together with an expert engineering team, we will draft a technical feasibility study. Once the preparatory work is completed, our goal is to reach a joint investment decision. We know that hard work lies ahead, and we will work closely with our partners to reach that goal,” Ibadov said.
Bajatović: I have no doubt that we will build the new gas power plant
Srbijagas CEO Dušan Bajatović highlighted the fact that Azerbaijan is Serbia’s largest supplier of natural gas after Russia, making it logical to build a strategic partnership for the construction of a gas power plant.
“A lot of work has already been done on the ground, so I have no doubt that we will build the new gas plant. EPS needs it primarily for power system balancing, which is crucial for the future,” Bajatović explained.
Prior to the signing of the agreement, the first meeting of the project’s steering committee was held to review activities regarding the further development and implementation of the gas power plant.
