Demostat: Elektroprivreda Srbije Needs EUR 1 Billion

In order to import the required quantities of electrical energy during the winter season, Elektroprivreda Srbije (EPS) will have to pay between EUR 1 and 1.5 billion, and the owner of that company, the Government of Serbia, is considering how to get such a substantial amount of money, Demostat learns from very well-informed sources.

Due to the insufficient quality of the coal at the mines of the Kolubara Mining Basin, the major malfunctions that happened at EPS in late 2021 and early 2022 and the low power generation at HPPs due to the drought, experts predict that the company will lack as much as 2.2 billion kilowatt-hours of electrical energy for the supply of consumers in the country.

This summer, the electrical energy system of Serbia faced the lowest water levels in the past ten years. In June and July, the inflow was practically halved.

– At the HPPs Djerdap, which, under normal circumstances, cover one fourth of the consumption of electricity in Serbia, in mid-August, the situation additionally worsened due to the fact that the water flow was only 2,000 cubic meters per second, which, for the sake of comparison, is three times less that the June multiannual average – Demostat writes.

This situation has led to the fact that EPS is already now forced to import electricity and at much greater quantities than is usual for the summer period, which is on average around 200 MW per hour. Experts project that, in the heating season, EPS will lack quantities in the amount of 500 MWh of electrical energy per hour.

Considering the prices of electricity in the markets, which reach EUR 750 per MWh, according to Demostat, “EPS will need EUR 1 to 1.5 billion in order to buy the quantities it will lack, because it will not be able to provide them from the local production capacities”.

What those in charge at the Government of Serbia are considering now is how to provide the money that EPS needs to buy the electricity. One of the possibilities, Demostat learns, is for EPS to take out a new loan from commercial banks, but in that case, it needs to be considered that the company already has substantial debt.

Another possibility that is being considered is for the Government of Serbia to be the one that would provide the company with state guarantees for a loan, in order for it to get the necessary funds for the normal functioning. The third option, according to Demostat’s findings, is for the Government of Serbia to make an arrangement with the International Monetary Fun that would entail giving the right to that finance organization to take part in managing EPS.

The source of Demostat says that the decision about which of these three models the Government of Serbia is to choose to secure the necessary funds for the functioning of EPS has not yet been made.

Vlada Republike Srbije

Međunarodni monetarni fond-MMF Beograd

Elektroprivreda Srbije ad Beograd

EPS Rudarski basen Kolubara Lazarevac

Hidroelektrane Đerdap Kladovo

Agencija za energetiku Republike Srbije

Government of Serbia

International Monetary Fund

IMF

Elektroprivreda Srbije

EPS

Kolubara Mining Basin

HPP Djerdap

Energy Agency

malfunction at EPS

production of electricity

import of electricity

purchase of electricity