By Nikola Catovic
Only 10 years ago, drifting cooling towers and open coal mine pits were the profile picture of the Serbian energy sector. With the lion share of installed capacities used for the generation of electricity on brown coal and lignite, Serbia was topping the international polluting charts for decades. Some studies indicate that annually close to 2,000 premature deaths and thousands of respiratory and cardiovascular cases are linked to air pollution due to utilization of fossil fuels to meet the energy needs in the country.
For many years, renewable energy sources were only associated with massive hydropower plants on the Danube and Drina rivers, built during the former Yugoslav times. Solar PVs and windmills could only be seen abroad, often raising questions like: “Why are there no wind parks in Serbia?”
Even though abundant with natural resources, the instable political situation and lack of adequate laws and regulations halted the utilization of renewable energy sources at large scale for decades.
Small but decisive steps were taken only with the Energy law changes back in 2010. Since then, the country is trying to stick to its green agenda. However, there is no easy path to success. The adoption of the new regulations towards green technologies took off-guard all stakeholders in the market. Investors rushed in but were immediately hit by the harsh reality of an environment inexperienced to embrace the new technologies. Lack of local technical know-how, unaligned regulations and financial sector inexperienced in green project finance came back as a boomerang to the ambitious plans to transition from an extremely polluting environment to a much greener one.
So, where does Serbia stand today, 10 years after? Well, still approximately 60% of electricity is being produced in thermal power plants running on coal. Overall, in the past 10 years 10% of the generation capacity based on coal was replaced by renewable sources such as wind, small hydro, biogas and PV. But more work still needs to be done. As signatory of the Paris Agreement, Serbia has set its National Determined Contribution (NDC) to the United Nation Framework Convention on Climate Change (UNFCCC) with the commitment to reduce by 2030 its greenhouse gasses emissions (GHG) by 9.8% compared to 1990.
We at MACS had the opportunity to be at the forefront of that development wave by supporting both investors and financial institutions in building up the needed capacities and a profound understanding of renewable energy systems.
One of the landmark projects we supported was the 2 MW solar power plant Solar Matarova. Built close to the town of Kuršumlija, one of the poorest municipalities in the country, Solar Matarova still stands as the biggest PV project in Serbia, supporting also rural development.
The plant provides clean electricity for about 500 households. That may not sound like much, but the importance of this investment goes beyond the Kilowatt provided, as it is a lighthouse project for the local community and the wind power community of local investors, financiers, engineers, and workers involved in the implementation, operation and maintenance of the facility. For Solar Matarova, one of the first commercial renewable energy projects in Serbia, with our DD Plus concept we supported the investor in fine-tuning the project concept as well as the financier with the technical risk appraisal.
Energy Efficienc and Renewable Energy /EE/RE) is gaining importance in Serbia and it is an explicit objective of the Serbia Government ot increase EE/RE. However, EE/RE investmentsnare still insufficiently mainly due to (i) a lack of awareness of the need to conserve/save energy on part of enterprises, municipalities and households and (ii) limited access to long-term financing for EE/RE invetments. The Project “Low Carbon Energy Facility” adresses these challenges. Under this Project up to three partner financial institutions (PFIs) will implement Credit Lines under this project to be extended as EE/RE loans to MSMs, private households and municipalities.
The objective of the project is to increase and deepen access of micro, small and mediumsized enterprisies, households and municipalities to EE/RE finance thus contributing to the deepening and broading of the financial sector as well as to climate protection through the reduction of energy consumption and CO2-emissions in Serbia.
MACS will provide technical assistance and implementation support to UniCredit Bank Serbia for the implementation of the LowCarbon Credit Line to increase access to EE/RE financing for MSMEs and private households in line with the KfW Sustainability Guidelines.
Nikola has an MSc in Electrical Engineering and his professional focus at MACS is on RE/EE projects, knowledge transfer and project management. Since April 2015, Nikola is also the Managing Director of MACS Serbia and responsible for the business development of this office.
Nikola is a “bankers engineer” – having performed technical due diligences of many RE/EE projects and countless RE/EE trainings for bank staff during implementation of RE/EE Credit Lines and loan products at banks in Western Balkan, Caucasus and Turkey.
On top of his technical skills, Nikola possesses outstanding language skills; he is fluent in English, German, Italian, Spanish and Russian besides his mother tongue Serbian.