Electricity from the Serbian town of Kostolac will soon come with the help of wind and not only coal, thanks to the support of the European Union. The wind farm, situated one hour east of Belgrade, will be the first in the history of operations of Elektroprivreda Srbije.

Serbia and the EU are jointly working on the construction of a new wind farm, installed at the locations of depleted coal mines. This initiative not only marks a significant step towards reducing the country’s coal dependence, but also represents a specific commitment to fostering a cleaner environment and creating new jobs.

The construction completion is planned for 2025. The investment project has been financed with €31 million EU grant through the WBIF, and a grant/loan from KfW (€80 million – loan, €1,8 million – grant). The Kostolac Wind Farm will feature 20 wind turbines with a total installed power capacity of 66 MW. 

The plant is expected to produce 187 GWh of electricity, equivalent to the energy demand of 45,000 households, and displace 174,000 tonnes of CO2 annually. Construction will take place in multiple locations, including Drmno, Petka, Ćirikovac and Klenovnik. The lifespan of the wind farm is projected to be 20 years.

This investment project was identified as Flagship 4 - Renewable energy in the European Union Economic and Investment Plan. It was approved for financing by the WBIF in 2022.

The agreement, which provides funding of the project for the construction of “Kostolac”, was signed on 30 January 2024 in Belgrade. Dubravka Đedović Handanović, Minister of Mining and Energy of the Republic of Serbia, together with representatives of the KfW Office in Belgrade and “Elektroprivreda Srbije” (EPS), the electric utility power company, signed the agreement. The event was also attended by the Ambassador of the European Union to Serbia, Emanuele Giaufret, the Ambassador of Germany to Serbia, Anke Konrad, and the Minister for European Integration, Tanja Miščević.

Emanuele Giaufret, the Ambassador of the European Union in Serbia, reminded of the broader importance of the project: “This project is not just a proof of Serbia’s commitment to green energy but also a cornerstone of our European Green Deal and Just Transition, promoting economic development while preserving our planet and citizens.”

“The Kostolac Wind Farm showcases our joint endeavour of moving away from coal. It symbolizes our dedication to reducing reliance on fossil fuels, decarbonising our economies and embracing renewable energy sources. The project is just one element of our wider support to Serbia in the energy sector which amounts to over €500 million. We paid energy bills for vulnerable households and businesses, we modernise the energy system of the VMA (former Military hospital) and we construct a new energy highway which brings greener and more secure energy to Serbia: the Trans-Balkan electricity corridor. The EU is thus Serbia’s most important partner in the field of energy”, said Giaufret.

“The agreement that we signed today is an important step in the implementation of the project to build the first EPS wind farm, the Kostolac Wind Farm, by rounding off the financial structure for the total project investment”, said Dubravka Đedović Handanović, Minister of Mining and Energy of the Republic of Serbia.

The Minister for European Integration, Tanja Miščević, said that the construction of the Kostolac Wind Farm confirms the partnership between Serbia, the European Union and the Federal Republic of Germany in the process of energy diversification and green energy transition. “The project will also have an impact on new employment in Kostolac and its surroundings in order to develop the use of renewable energy sources”, said the Minister.

The EU’s support in the energy sector of Serbia amounts to more than €500 million since 2007. Another important project is the complete modernisation of the energy and heating system in the former military hospital VMA or the new gas interconnector with Bulgaria. By building this new gas pipeline, the EU helps Serbia to reduce CO₂ emissions and become less dependent on Russian gas. With the Trans-Balkan electricity corridor, the EU – with its partners – constructs a new electricity highway to connect Serbia with neighbouring countries and provides a greater level of energy security. The EU also provided financial support to the state budget for energy bills of vulnerable households and businesses.