Serbia has opened a RSD 625 million public procurement procedure, approximately €5.3 million, for planning and initial technical documentation for the Đerdap 3 pumped-storage hydropower plant. The tender is part of the project’s most substantive preparatory phase, following decades of development activity.
The Ministry of Mining and Energy is seeking a consultant or consortium to prepare the General Design, Preliminary Feasibility Study, a special-purpose spatial plan and a Strategic Environmental Assessment. Bids are due by 20 August 2026.
Scope of the early-stage development procurement
The procurement is described as an early-stage development contract rather than a construction tender. Its stated purpose is to determine whether Đerdap 3 can be configured, permitted and financed as a technically coherent project.
The studies are also intended to address impacts on the Danube, the existing Đerdap hydropower system, navigation, protected areas and Serbia’s cross-border water relationship with Romania. The resulting documentation is meant to support decisions required before Serbia negotiates an engineering, procurement and construction contract.
The plant is proposed as a large water-based electricity-storage system. During low-demand periods or when there is excess renewable generation, electricity would be used to pump water from the Đerdap 1 reservoir into one or possibly two upper reservoirs.
When demand and prices rise, stored water would be released through reversible pump-turbine units to generate power. The concept therefore links pumping consumption and later generation output through reversible equipment.
Capacity concepts and potential upper-reservoir locations
Current concepts indicate an installed capacity range of 1,200 MW to 2,400 MW. The Ministry is examining an intermediate configuration of approximately 1,800 MW.
A hydraulic head of around 400 metres is considered technically possible. Potential upper-reservoir sites under assessment include Pesača and Brodica on the Northern Kučaj mountain range.
The Danube and the existing Đerdap 1 reservoir would serve as the lower reservoir. The project area lies between Golubac and Donji Milanovac, about 65 kilometres upstream of Đerdap 1.
The overall scheme would require intake and outlet structures on the Danube, large underground or surface waterways, pressure tunnels and penstocks. It would also include upper dams and reservoirs, reversible generating units, a powerhouse, transformers, switchgear and a high-capacity connection to the Serbian transmission network operated by Elektromreža Srbije.
Pumped-storage role in balancing and system services
The project is described as involving greater complexity than another hydropower station because pumping would consume more electricity than later returned generation due to hydraulic, electrical and mechanical losses. Its value is tied to shifting electricity between periods rather than net generation alone.
The storage function would be used to absorb surplus wind and solar generation, supply peak demand and provide rapid-response balancing. It would also support reserves, frequency control and system-restoration capability.
An indicative investment value for Đerdap 3 is stated at approximately €2.6 billion, but final cost reliability depends on configuration choices. Serbia’s planning work will need to establish plant configuration, reservoir volume, geological conditions, tunnelling requirements and grid-connection design.
For the currently discussed 1,800 MW configuration, the headline estimate implies capital intensity of around €1.44 million per MW, or €1,440 per kW. The document notes that construction costs remain exposed to upward pressure from tunnelling complexity, geology risks, environmental mitigation and compensation measures.
Cost envelope scenarios and usable storage ranges
The construction envelope could move towards €3 billion–€3.4 billion, depending on requirements for grid reinforcement and imported electromechanical equipment. A full 2,400 MW build-out could require €3.2 billion–€4 billion, depending on storage duration and the number of upper reservoirs.
The documentation tender at €5.3 million is described as representing around 0.2% of the currently indicated construction value. The emphasis in the procurement description is placed on what the studies must decide rather than on the size of the budget itself.
A weak preliminary design could lock Serbia into an oversized configuration, underestimate geological exposure or fail to establish a defensible environmental baseline. The process described in the tender materials requires settling optimum capacity, energy-storage duration and construction sequence before Serbia negotiates an engineering-procurement-construction contract.
A proposed operational envelope for an 1,800 MW plant with eight hours of full-load generation would provide approximately 14.4 GWh of usable storage. A ten-hour configuration would raise storage to 18 GWh, while a maximum
The maximum
Bistrica pumped-storage alignment and revenue structure inputs
The tender materials state that Đerdap 3 would sit alongside Serbia’s separate pumped-storage project at Bistrica rather than replacing it. Bistrica is described as smaller and more advanced in its development pathway.
The two projects are presented as potentially complementary: Bistrica providing flexibility at a more manageable scale while Đerdap 3 provides deep storage, peak capacity and cross-border balancing across longer operating cycles.
The economic case depends on revenue structure because pure energy-price arbitrage is described as unlikely to provide sufficient certainty for several billion euros of non-recourse debt. The plant would need market revenues combined with long-term capacity remuneration and ancillary-service payments.
The materials also reference potential state-backed availability or system-services arrangements as part of financing assumptions. Under an illustrative base case for an
Revenue metrics under illustrative configurations
An illustrative base case for an
A ten-hour configuration would raise that storage level to 18 GWh in the intermediate option range discussed in the tender materials. For the maximum option at up to 2,400 MW over the same duration range, usable storage is stated at between 19.2 GWh and 24 GWh.
Financing structure, schedule risk and US partner process timeline
The financing approach described in the materials is closer to major regulated infrastructure than a conventional merchant renewable project. A plausible envelope combines 20–30% equity or sovereign-equivalent public funding with 70–80% long-term debt.
The debt portion could involve export-credit agencies, US development-finance institutions, international financial institutions and commercial banks. At a €3 billion base construction cost this implies approximately €600 million–€900 million of equity or public capital alongside €2.1 billion–€2.4 billion of debt.
A tenor of at least 20–25 years after completion is described as preferable given construction duration and expected operating life of 60 years or more. Lenders are said not to rely entirely on day-ahead electricity-price spreads; they would require a defined revenue floor supported by capacity or availability mechanisms or regulated cost recovery.
The materials also highlight schedule risk: a delay of 12–18 months after financial close could add approximately €120 million–€300 million through construction inflation, extended owner costs, contractor claims and interest during construction. Such delays could reduce equity internal rate of return by around 0.7–1.5 percentage points depending on leverage ratio and whether lost availability revenues are compensated.
A phased approach could reduce funding pressure by commissioning an initial block such as 1,200 MW or 1,800 MW before completing the full plant. The political timetable cited in the materials envisages completion of a first phase by around 2036 with a wider horizon potentially extending to 2038.
The initial contracting and front-end engineering phase alone is indicated at approximately 36 months due to planning needs including geological investigation, environmental studies, cross-border coordination, land acquisition and permitting prior to main construction.
Romania interface constraints for water management operations
The tender materials describe Romania as an indispensable counterpart even though Đerdap 3’s power station and proposed upper reservoirs would be located on Serbian territory. Đerdap 3 would draw water from a reservoir forming part of the jointly managed Iron Gates hydropower and navigation system.
Pumping and generation cycles could influence Danube water levels, navigation conditions and operation of Đerdap 1 and Đerdap 2 jointly operated by Serbia and Romania. Serbia and Romania signed a memorandum in Bucharest on 16 July 2026 to facilitate information exchange and technical assessment.
The memorandum states that any development must remain compatible with electricity production at Iron Gates I and II while protecting riverside areas and maintaining navigation on the Danube. Reservoir-level limits, pumping schedules and high-output generation periods therefore need coordination with Romanian authorities and bilateral bodies managing existing Đerdap operations.
Grid integration studies for up to 2,400 MW injection point
The materials identify grid integration as another major challenge because injecting up to 2,400 MW at one point would represent a very large change for Serbia’s transmission system. Connection studies are expected to assess nearby 400 kV infrastructure capacity along with internal Serbian bottlenecks.
The connection assessment also covers cross-border corridors towards Romania, Bulgaria and Hungary. The plant’s ability to reduce renewable curtailment depends on transmission capacity available both for moving surplus electricity to Đerdap during high-wind or high-solar periods.
A base renewable-integration case assumes Đerdap 3 helps accommodate an additional 3–5 GW of wind and solar capacity during the 2030s within regional planning assumptions. Under this scenario framework a longer-storage configuration at up to 2,400 MW could support a wider regional renewable envelope including electricity imported for pumping from Romania, Bulgaria and Hungary.
Curtailment savings assumptions used in value inputs
Curtailment savings are described as only part of total value because avoided emergency imports also contribute through reduced fossil-fuel peaking support reserves supply frequency control needs during sharp changes in renewable output. Avoided curtailment is stated at between 500–1,000 GWh per year with an average captured electricity value of €40–€70/MWh.
This produces direct annual benefit estimates ranging from approximately €20 million to €70 million based on those assumptions in the tender materials. Environmental permitting is identified as another factor that may determine feasible project size given constraints within the wider Đerdap Gorge landscape.
Strategic Environmental Assessment requirements for alternatives comparison
The proposed development affects areas described as having high ecological, cultural and archaeological value including parts of Đerdap National Park. Upper-reservoir construction would require dams, excavation, access roads, transmission infrastructure and disposal areas for substantial quantities of rock and soil.
The Strategic Environmental Assessment must compare alternatives rather than only justify a preferred configuration. Early assessment requirements include location and number of upper reservoirs; surface versus underground infrastructure; construction traffic; biodiversity effects; water quality; sediment movement; landscape impact;and cumulative effects with existing hydropower assets.
Project stage transition from concept toward lender-grade documentation
The new tender moves Đerdap 3 beyond political announcements but does not make it construction-ready according to the materials provided for this procurement stage . The next stage described will convert a decades-old concept into a modern storage asset with confirmed reservoir design.
The General Design and Preliminary Feasibility Study will determine whether an intermediate configuration can hold its estimated €2.6 billion–€3.2 billion capital envelope while delivering bankable storage economics without transferring excessive geological risks environmental risks or market risks onto Serbia .
