March 15 (SeeNews) - The European Bank for Reconstruction and Development (EBRD) said on Wednesday it signed a loan agreement with Serbia’s finance ministry worth $300 million (284 million euro) to provide liquidity to the country’s electricity sector and support its green transition.
The funds will be used by state-owned power utility Elektroprivreda Srbije (EPS), which during the winter season faced a liquidity squeeze due to the import of significant amounts of electricity, the EBRD said in a press release.
The project will support the government’s strategy to decarbonise the electricity sector, phase out coal by 2050, develop the regulatory framework for the launch of renewable energy auctions and incentivise their roll-out, and ensure both energy security and sustainability of supply.
“We look forward to working with EPS and the Serbian authorities on the ambitious reform programme attached to this loan. In coordination with the IMF and other international financial institutions and donors, we are committed to contributing to the transformation of the energy sector, turning it from a drain into a driver of the country’s green economy transition," said EBRD Director for the Western Balkans, Matteo Colangeli.
While large-scale hydropower plants provide about 30% of Serbia’s energy generation, renewable sources such as wind and solar make up less than 3% and have the potential to help the country develop a substantial new, clean domestic energy supply, the EBRD noted.
The loan will be provided in two tranches and will be guaranteed by the finance ministry.
1 euro = $1.055