Serbia and Azerbaijan sign shareholder agreement to build gas-fired power plant in Nis

Serbia's state-owned energy company EPS (Elektroprivreda Srbije), gas company Srbijagas, and Azerbaijan"s state oil company SOCAR have signed a shareholder agreement providing for the construction of a combined-cycle gas-fired power plant in the city of Nis.

According to Serbia's Ministry of Mining and Energy, cited by Report, the agreements also envisage the establishment of a joint venture.

The document was signed by EPS CEO Dusan Zivkovic and Srbijagas CEO Dusan Bajatovic, as well as Elchin Ibadov, SOCAR President's Advisor for Development and Portfolio and CEO of SOCAR Türkiye.

Under the agreement, the Serbian participants will hold a 50% stake in the joint venture, while the remaining 50% will be held by the Azerbaijani side. The document sets out the rights and obligations of the parties, principles of joint management, the procedure for unanimous decision-making on key matters during the preparatory stage, as well as the terms for financing the project work.

Speaking at the signing ceremony, Serbian Minister of Mining and Energy Dubravka Djedovic Handanovic noted that the project is at an advanced stage of preparation. In her assessment, the establishment of the joint venture will ensure the effective implementation of an initiative of strategic importance for the country"s energy security, the stabilization of the power system, and attracting investment to southern Serbia.

"For the implementation of such large-scale and complex energy projects, strategic partnerships are essential, and the foundations for these partnerships were laid by the presidents of Serbia and Azerbaijan, Aleksandar Vucic and Ilham Aliyev. Thanks to this cooperation, we now have a clear link between three crucial systems – international energy partnership, gas supplies, and electricity generation. This provides a good basis for developing a project of long-term importance for Serbia, primarily in light of growing electricity consumption and the need to transition to cleaner energy sources. Compared with coal and fuel oil, gas is such a source, serving as a transitional energy carrier in the energy transition process," the minister said.

It was noted that the main priority for the coming period will be to complete the full range of necessary technical, economic and design studies, as the gas-fired power plant is planned to be built within the next four years.

EPS CEO Dusan Zivkovic recalled that the preliminary feasibility study has already been completed, the Spatial Plan for the City of Nis has been approved, contracts have been signed for the preparation of design documentation and a transmission grid connection study, a design organization has been engaged, and work has begun on the full feasibility study and technical documentation.

"We have been actively working on the project for several months with a clear goal – to build a highly efficient combined-cycle power plant with a capacity of 500 MW," Zivkovic said.

Bajatovic, in turn, noted that Azerbaijan is Serbia's second-largest natural gas supplier after Russia, making the partnership in electricity generation a logical continuation of bilateral relations.

"I am pleased that we are making progress in implementing this project. A great deal has already been done in practice, so I have no doubt that we will build the new gas-fired power plant. It is needed primarily by EPS to balance the power system, which is of utmost importance for the future," Bajatovic added.

Ibadov emphasized that the signing of the agreement represents an important stage in strengthening intergovernmental energy cooperation.

"This agreement enables SOCAR and EPS to jointly develop a combined-cycle gas-fired power plant in Nis. Together, we will prepare a feasibility study with the involvement of a team of engineering experts. Once the preparatory work is completed, our goal is to make a joint investment decision. We understand that hard work lies ahead, and we will work together with our partners to achieve this goal," Ibadov said.

A day before the signing of the agreement, the first meeting of the Project Steering Committee was held, during which the parties discussed further progress and the practical implementation of the construction of the gas-fired power plant in Nis. Participants included the Minister of Mining and Energy in a technical mandate, the heads of the three companies and their teams, as well as representatives of the Nis city authorities.