Serbia’s state-owned utility Elektroprivreda Srbije (EPS) plans to begin construction work during autumn 2026 on the modernization of the Vlasinske hydropower cascade. The programme is intended to extend the life of assets that have supplied peak electricity to the Serbian system for more than seven decades.
Scope and expected operational outcomes
The first construction phase will target the intake structure. Subsequent work will cover generating units, auxiliary equipment, hydromechanical systems and other components of the cascade. EPS expects the modernization to raise availability and operating reliability while extending service life by at least 30 years.
EPS said the investment is particularly relevant for dispatchable hydropower that can respond to evening demand, renewable intermittency and balancing requirements. It contrasted this with inflexible baseload generation in terms of responsiveness to system needs.
Financing package for €109.7 million programme
The total programme is valued at €109.7 million. Financing includes a €67 million loan from the European Bank for Reconstruction and Development, a €15.43 million EU grant provided through the Western Balkans Investment Framework, and €27.26 million from EPS.
The EBRD loan represents approximately 61% of the funding package, the EU grant around 14%, and EPS’s contribution close to 25%. EPS said the grant reduces effective capital burden and supports project economics where reliability and system services are not always fully reflected in wholesale electricity prices.
Construction risk and interest during delays
Construction risk will focus on the condition of existing structures and equipment. EPS said rehabilitation projects involving assets in operation for more than 70 years often face undocumented interfaces, inaccessible components, and differences between historical drawings and actual site conditions.
EPS added that intake works create an interface between civil construction, water management and the outage schedule. It estimated that a 12-month delay could add roughly €2.7–4 million in interest to a fully drawn €67 million facility at an indicative cost of 4–6%, excluding price escalation and postponed operating benefits. Actual interest would depend on drawdown timing.
Related rehabilitation experience and project dependencies
EPS has previously rehabilitated units at Bajina Basta, Djerdap 1 and Zvornik, adding a combined 172 MW of hydropower capacity. The utility said Vlasinske differs because its strategic value is tied more to peak capability, flexibility and continued availability than only incremental megawatts.
The bankability of the Vlasinske modernization depends on detailed outage coordination, reservoir management, contractor responsibility for hidden conditions, and performance testing after rehabilitation. EPS said modern equipment can extend the cascade’s life, but full system value would require commissioning civil, electrical, hydromechanical and dispatch-control upgrades as an integrated package.
