The European Bank for Reconstruction and Development (EBRD), together with Erste Group Bank AG and its local bank Erste Bank a.d. Novi Sad (Erste), have approved a financing package worth 91.4 million euros for the construction of a new windfarm in Serbia, which will be built by Enlight Renewable Energy (Enlight). The financing package will provide a major boost to the country’s goal of diversifying its energy mix.
The EBRD and Erste will provide parallel loans, worth 45.7 million euros each, including the associated debt service reserve facilities. Enlight’s local subsidiary will use the proceeds to develop, construct and operate the 94-megawatt (MW) windfarm, which has been originated by Enlight and New Energy Solutions (NES), and named in honour of Mihajlo Pupin, one of Serbia’s greatest scientists. The Pupin project is expected to begin operating commercially in the second half of 2025. It is an extension of the existing Kovacica (Blacksmith) windfarm in Vojvodina, which is also owned by Enlight and was financed by the same lenders in 2017.
Once commissioned, the Pupin windfarm will be able to supply clean, green electricity to more than 40,000 households, equivalent to the number of households in a medium-sized city like Zrenjanin. The windfarm will also help to reduce the carbon intensity of Serbia’s power sector and advance its green economy transition. Coal still dominates electricity production in Serbia and the financing package comes at a time when the country faces an urgent need to diversify away from fossil fuels to help address its long-term structural energy challenges.
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This project was financed under Serbia’s first renewable energy auction for wind capacity, which took place in 2023 and awarded contract-for-difference for 400 MW. A second and third auction, each for 300 MW of wind capacity, are expected to take place in 2024 and 2025, respectively. Similar auctions will be held in parallel for solar power plants. The scheme was developed and launched with technical and policy support from the EBRD and was funded by the Swiss State Secretariat for Economic Affairs (SECO). The scheme encourages the market integration of renewables, as developers receive support in line with market prices, as well as income from the sale of electricity.
“Serbia’s decision to move ahead with auctions is proving to be a game changer in terms of unlocking the country’s renewable energy potential. We are pleased to see Pupin being the first project to reach financial close and moving quickly through implementation, proving that speed of execution and best practice in terms of environmental and social standards can go together. We are committed to support Serbia’s second wind and solar auction later this year to continue accelerating the country’s green transition”, said Matteo Colangeli, EBRD Regional Director for the Western Balkans.
“Building the Pupin windfarm in close proximity to our existing Kovacica (Blacksmith) site represents a noteworthy implementation of our ‘Interconnection Expand’ strategy. We were able to leverage the technical knowledge and transmission infrastructure that was already in place at Kovacica, resulting in greater efficiency and higher returns for Pupin. In addition, we were fortunate to engage once again with our partners EBRD and Erste for financing of the Pupin project; these are the same lenders who supported us in the development of the Kovacica site”, commented Gilad Yavetz, CEO and co-founder of Enlight Renewable Energy.
Wolfgang Hargassner, Head of Corporate Finance at Erste Group, commented: “The financing of the first windfarm project under Serbia’s new renewable energy auction scheme marks a major step on the country’s path to green energy transition and we hope it will pave the way for other projects in the future. The realisation of the Pupin project is thanks to the great cooperation and unwavering commitment among all the parties involved, including investors, banks, advisers, the power off-taker, the turbine supplier, and many others.”
Enlight, develops, finances, constructs, owns, and operates utility-scale renewable energy projects, employing solar, wind and energy storage technologies. The company operates in the United States, Israel and 9 European countries, and is listed on NASDAQ (ENLT) and the Tel Aviv Stock Exchange (ENLT.TA)
Erste Group Bank AG is one of the leading financial services providers in central and eastern Europe, with more than 16 million customers and total assets worth more than 337 billion euros.
The EBRD is a leading institutional investor in Serbia. The Bank has invested 9 billion euros across over 350 projects in the country to date.
Source: EBRD
