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EPS and Chinese company CMES sign agreement on implementation of „Kostolac - B Power Plant Projects“

Date: February 4^th 2010 Author: Dragan Obradović, Belgrade Category: Articles
Topic: Electricity , Economy

Kostolac - 1.251 billion dollar deal with China

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The government of Serbia signed yesterday (February 3) the agreement on the implementation of a package of projects dubbed „Kostolac - B Power Plant Projects“.

PHOTO: Alenka Žumbar

The package in question comprises of the upgrade of the existing 350 MW blocs B1 and B2, desulphurisation of both blocs and a project for increasing the capacity of the open-pit coal mine Drmno to 12 million tons of coal a year, next to the turnkey construction of a new bloc B3.

The overall investment totals 1.251 billion US dollars, whereby 85 per cent of project costs i.e. 1.060 billion dollars will be provided through a loan of the Chinese Exim bank (the fixed interest rate is not to exceed three per cent a year). The repayment period is 15 years with a five-year grace period. The remaining 15 per cent of the required funds will be provided by the contracting authority and the user.

The three parties in the preliminary agreement are Elektroprivreda Srbije (EPS) as the contracting authority, the company Thermal Power Plants and Mines Kostolac as the user, and Beijing-based China National Machinery & Equipment Import & Export Corporation (CMEC) as the contractor. The preliminary agreement represents the base for defining and closure of the Contract on the implementation of the „Kostolac - B Power Plant Projects” package.

Energy Minister Petar Skundric said after signing of the preliminary agreement with the contractor that the contract should be signed within two months which will be the base document for signing further commercial contracts. Upgrade of the two blocs of the Kostolac thermal power plant (B1 and B2) should be completed in 30 months’ time, while the increase of the capacity of the open-pit coal mine Drmno to 12 million tons a year should end by 2015.

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