€870 million for hydroelectric power plants on the Drina - Serbia, Republic of Srpska, SECI Energia ink preliminary agreement

A preliminary agreement on the establishment of a strategic partnership between the electric power companies of the Republic of Srpska (RS) and Serbia and the Italian company Seci Energia was signed in Banja Luka on Friday (September 23, 2011) for the sake of implementation of the project Srednja Drina (Middle Reaches of the Drina) with a joint investment worth EUR 870 million, Srna news agency reports.

Minister of Industry, Energy and Mining of the Republic of Srpska Zeljko Kovacevic said that the Srednja Drina project envisaged the construction of three hydroelectric power plants - Dubrava, Tegare and Rogacica, with the total installed capacity of 320 megawatts (MW).

He added that the signed agreement represented the first in a series of activities to be executed in line with the earlier signed documents between the governments of RS, Serbia and Italy, and that he expected the researches to be soon followed by the commencement of the project implementation.

Speaking about possible difficulties in the cooperation with institutions in Bosnia-Herzegovina, Kovacevic stressed that there were no obstacles to the implementation of that project and added that the focus was on economic interests, which were not going to be affected by the politics.

Petar Skundric, an adviser to Serbian Prime Minister Mirko Cvetkovic, said that Srednja Drina, together with the construction of hydroelectric power plants on the Ibar river, represented the most significant regional project aimed at providing sufficient amount of clean energy from renewable energy sources.

He stated that that project was in line with the European directives stipulating that each member of the EU should generate about 20% of the total energy consumed from renewable energy sources, and added that the project would position RS and Serbia as significant manufacturers of clean energy in that part of Europe.

Director of the Electric Power Company of RS Branislava Milekic specified that the agreement outlined the principles of the joint investment, 51% of which should be provided by Seci Energia and the rest by the power companies of RS and Serbia, and mutual relations in the design of the project and technical documentation.

She added that all three signatories would start forming a joint venture upon the adoption of an economic feasibility study.

Milekic said that Seci Energia should obtain incentives from the Italian government, which would be paying the price of EUR 155 per megawatt-hour (MWh) for all energy produced at aforementioned hydroelectric power plants over the next 15 years.

Director of the Electric Power Company of Serbia (EPS) Dragomir Markovic said he expected the construction works to kick off in 2013, whereas electricity from the middle reaches of the Drina river should be in use as of 2019.

He reminded that EPS and Seci Energy were already in the process of formation of a joint venture for the construction of 10 hydroelectric power plants on the Ibar river.

According to the words of President of Gruppo Industriale Maccaferri Gaetano Maccaferri, the incentives of the Italian government for the energy produced abroad will create an opportunity for companies from Serbia and RS to maximally utilize their water potentials and make an additional economic profit.

He pointed out that that group had recently developed its own renewable energy sector, focusing its activities in that domain on the region of the Balkans.