The European Bank for Reconstruction and Development (EBRD) has extended a €200m restructuring loan to Serbia’s state-owned utility Elektroprivreda Srbije (EPS) aimed at improving the power infrastructure within the country.
The loan is expected to help EPS in restructuring its balance sheet, which had taken a hit after the 2014 Balkan floods.
The power utility had faced around $96m losses and was forced to reduce its power output by one third, since the flood had damaged its coal-production plants, reports Reuters.
EPS intends to use the financing to meet its long-term development objectives, including commercialisation, raising standards of corporate governance and improvement of energy efficiency.
It is also expected to help Serbia in achieving energy market liberalisation, which is considered to be significant for the country’s entry to the European Union.
The funding is also expected to strengthen regional integration in the Western Balkans, through cross-border energy distribution and trade.
EBRD director for power and energy Nandita Parshad said: "We are pleased to be working on the modernisation of the company, increasing environmental and social standards and corporate governance.
"We see a lot of potential to further develop EPS as a commercial company, and it is important EPS continues to implement the reforms started over the past year or two."
As well as the Serbian government and EBRD, the initiatives will also be supported by the World Bank and the International Monetary Fund.
EBRD Serbia director Daniel Berg said: "This loan is hopefully the final step to help EPS recover from the damage and by refinancing liabilities taken at the time, management will be in a position to press forward with a vision for a more efficient company."
Image: The funding will support cross-border energy distribution and trade in Serbia. Photo: courtesy of European Bank for Reconstruction and Development.