Serbia's power utility EPS plans to add $1 bln 350 MW coal unit

BELGRADE Tue Nov 5, 2013 10:22pm IST

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BELGRADE Nov 5 (Reuters) - Serbia's power utility EPS is set to begin a new phase of its second-largest coal-fired plant upgrade with the addition of a 350 megawatt (MW) unit costing nearly $1 billion, its managing board said in a statement on Tuesday.

EPS is undertaking a $1.25 billion upgrade of its Kostolac plant, using China Machinery and Engineering Corp. (CMEC) , mainly financed by Export-Import Bank of China.

It includes expanding the nearby Drmno lignite mines to boost the mines' capacity to 12 million tonnes a year from 9 million to feed the power plant, the EPS statement said.

Due to the outdated technology two 350 MW units at Kostolac operate below capacity. State-owned EPS has a monopoly on power production and distribution in Serbia.

EPS plans to connect the new unit to the grid in 2019.

Chinese investors are increasingly targeting energy projects in the Balkans, boosting their presence and showing a willingness to take bigger risks than European rivals in a potentially lucrative market with good links to the European Union and scope for price rises.

Serbia gets two thirds of its electricity from ageing coal-fired plants and the rest from hydro power. It urgently needs to upgrade its energy infrastructure to meet rising demand. (Reporting by Maja Zuvela; Editing by Louise Ireland)

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