The Serbian state has agreed to cover the financial obligations of the state-owned power utility, EPS, in relation to a loan of up to 30 million euros from the German development bank KfW. The loan is earmarked for the construction of the Kostolac wind farm, with the loan agreement signed last September.
As per KfW’s standard conditions, Serbia is required to issue a payment guarantee to the bank. This guarantee ensures that if EPS fails to meet its repayment obligations, Serbia, as the guarantor, will compensate KfW for any outstanding amounts due under the loan.
The proposed loan of up to 30 million euros aligns with Serbia’s budgets for 2024 and 2025. The loan will be available until 30 April 2026, with repayment set to begin on 15 November 2029 and continue through 15 November 2039. The fixed interest rate is set at 3.15% annually.
In early 2024, it was also announced that the Kostolac wind farm project is being financed through an 80 million euro loan from KfW, accompanied by a 1.8 million euro grant. Additionally, the European Union is contributing a 30 million euro grant through the Western Balkans Investment Framework (WBIF), and EPS is providing 32.2 million euros for the project.
