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The Chinese will give billion euros for TENT new unit

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After the loan for the reconstruction of the mine in Kostolac, the construction of a new unit in the same power plant and a port on the Danube, through which the coal would be transported, the Chinese expanded their plans to the power plant in Obrenovac as well.

China will give soft loan of €1 billion to Serbia for the power plant „Nikola Tesla” (TENT) in Obrenovac, and companies from that country plan to conquer Europe mostly from our country- Press reports.

The new loan is only a continuation of cooperation between China and Serbia in the energy sector, given that a credit line of €750 million for the reconstruction of the mine in Kostolac, the new unit in the same power plant and the construction of the port on the Danube through which the coal would be transported  has already been agreed.

Škundric: Everything goes according to plan

This coincided with the announcement of major investments in Vranje (pre-contract signed), where one of the largest Chinese private companies should invest €300 million in the construction of solar plants, by which the south of Serbia would become the European center for development of solar energy.

The loan which the Chinese will give for TENT could be a turning point in the development of energy sector in Serbia.

 – It is very important for us because Serbia has so far failed to find partners for TENT although there were rumours that this will be the German company RWE. If the Chinese start the business in TENT, along with the investments they have in Kostolac, the Serbian energy sector will become one of the largest Chinese investments in this part of Europe- explains Press interviewee close to the negotiating team of Serbia and China.

Petar Škundric, special Adviser to the Serbian Prime Minister of Energy and former Minister of Energy, told Press that cooperation with China runs smoothly.

– The cooperation is primarily related to the energy sector but during my stay in Beijing I met with the president of „Sinohema” with whom I spoke about the possibilities of cooperation on specific projects in the oil sector. The main project for which we received the green light is the construction of the new unit at TPP Kostolac.

In the next month I expect to sign contracts for the first phase, which will create  preconditions for the implemenation of the second phase, total value of $1 billion- emphasizes  Škundric and confirms that there are plans for Chinese companies to directly invest in other electric power projects.

Economic experts point out that these two projects are, along with the construction of a bridge across the Danube, the beginning of China’s entry to Serbia in a big way. And not only that, but also the indicator that China as well as other developed Asian countries, from investing into Africa, are more and more turning to the markets of Southeast Europe. Ms Kori Udovicki, regional director of the UN Development Program, said that both our economy and other economies in the region should turn to the Far East markets as soon as possible.

Serbian economy is traditionally turned to European and Western markets, where the situation is very difficult now. It is, therefore,  important to unite all the economies from the region in order to conquer asian market which will surely be the engine of global economy growth- said Udovicki.

Huge reserves

Mladen Kovacevic, an economist, also agrees with Ms Udovicki and says that Chinese foreign currency reserves are huge and even reach $3.200 billion.

China has been turned to African countries, where it bought the entire mines, for a long time. China’s capacities related to both import and those related to investments in other countries are huge- Kovacevic says.

The great potential of China is the fact that only in two years, during the global economic crisis from 2008 till 2010, it invested $26 billion in African countries. To make calculations clearer, it is sufficient to note that €46 billion has been collected in Serbia for 10 years, from loans, grants, direct foreign investments and privatization.

The agreement in Beijing the day after tomorrow

Chinese investments will be discussed the day after tomorrow in Beijing when the Joint Committee for economic cooperation between the two countries begins to work. Our delegation is led by Vuk Jeremic, the Minister of Foreign Affairs, while on behalf of the Ministry of Energy and Infrastructure is the State Secretary Dušan Mrakic.

It is expected that China permits its companies to be able to enter the property of Serbian companies. In fact, in China such decisions are made for each country respectively. That’s how recently it has been allowed to Chinese companies to become owners of the companies in USA and EU. If Serbia gets the same status, experts estimate that we will be able to get as many Chinese investments as we can receive.



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