The Serbian government has ratified a significant agreement with Azerbaijan to construct a combined cycle gas-fired power plant (CHPP) in Niš, signaling a strategic advancement in energy collaboration between the two nations. The formalization of this partnership was established through legislation approved on February 15, 2026, in Belgrade, setting a framework that spans two years with provisions for automatic renewal.
This agreement aims to bolster bilateral energy ties while securing long-term natural gas supplies from Azerbaijan. It also facilitates SOCAR’s entry into parts of the Serbian electricity market, enhancing competition and resource availability within the region. The joint venture is expected to play a pivotal role in stabilizing Serbia’s energy landscape.
Both governments will share the financial responsibilities for the project’s initial development phase. This phase encompasses critical preparatory work, including the creation of a spatial plan, feasibility studies, environmental impact assessments, and construction designs. Following these foundational steps, a dedicated project company will be established to oversee the plant’s development, operation, and management.
An essential component of this collaboration is the formation of a joint working group tasked with expediting project implementation. This group will also investigate potential investment incentives and regulatory measures designed to support efficient execution. Ensuring a reliable supply of Azerbaijani natural gas is vital for establishing consistent electricity generation at the new facility.
Serbian officials have assured that this initiative will not place additional financial burdens on the state budget. Preliminary planning indicates that the plant will be situated north of Krušca village near Niš; however, precise location details will be finalized through an urban development plan.
The timeline for this project includes plans to sign a construction contract in Azerbaijan by April 2026, with an anticipated completion date set for 2029. This development reflects Serbia’s commitment to diversifying its energy sources and enhancing cooperation with regional partners in pursuit of energy security.
