EBRD and Erste Approve Financing for New Windfarm in Serbia

The European Bank for Reconstruction and Development, together with Erste Group Bank AG and its local bank Erste Bank a.d. Novi Sad  have approved a financing package worth €91.4 million for the construction of a new windfarm in Serbia, which will be built by Enlight Renewable Energy. The financing package will provide a major boost to the country's goal of diversifying its energy mix.
EBRD and Erste Approve Financing for New Windfarm in Serbia

The EBRD and Erste will provide parallel loans, worth €45.7 million each, including the associated debt service reserve facilities. Enlight's local subsidiary will use the proceeds to develop, construct and operate the 94-MW windfarm, which has been originated by Enlight and New Energy Solutions, and named in honor of Mihajlo Pupin, one of Serbia's greatest scientists.

The Pupin project is expected to begin operating commercially in the second half of 2025. It is an extension of the existing Kovacica (Blacksmith) windfarm in Vojvodina, which is also owned by Enlight and was financed by the same lenders in 2017.

Once commissioned, the Pupin windfarm will be able to supply clean, green electricity to more than 40,000 households, equivalent to the number of households in a medium-sized city like Zrenjanin. The windfarm will also help to reduce the carbon intensity of Serbia's power sector and advance its green economy transition.

Coal still dominates electricity production in Serbia and the financing package comes at a time when the country faces an urgent need to diversify away from fossil fuels to help address its long-term structural energy challenges.

This project was financed under Serbia's first renewable energy auction for wind capacity, which took place in 2023 and awarded contract-for-difference for 400 MW. A second and third auction, each for 300 MW of wind capacity, are expected to take place in 2024 and 2025, respectively. Similar auctions will be held in parallel for solar power plants.

The scheme was developed and launched with technical and policy support from the EBRD and was funded by the Swiss State Secretariat for Economic Affairs (SECO). The scheme encourages the market integration of renewables, as developers receive support in line with market prices, as well as income from the sale of electricity.

Matteo Colangeli, EBRD Regional Director for the Western Balkans, said, "Serbia's decision to move ahead with auctions is proving to be a game changer in terms of unlocking the country's renewable energy potential. We are pleased to see Pupin being the first project to reach financial close and moving quickly through implementation, proving that speed of execution and best practice in terms of environmental and social standards can go together.

"We are committed to support Serbia's second wind and solar auction later this year to continue accelerating the country's green transition."

"Building the Pupin windfarm in close proximity to our existing Kovacica (Blacksmith) site represents a noteworthy implementation of our 'Interconnection Expand' strategy," commented Gilad Yavetz, CEO and co-founder of Enlight Renewable Energy. "We were fortunate to engage once again with our partners EBRD and Erste for financing of the Pupin project; these are the same lenders who supported us in the development of the Kovacica site."

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