Serbia has signed a $366m loan deal to pay for the desulphurization of a coal fired power plant.

The agreement – the biggest ever in Serbian environmental investment – will see money from Japanese financiers paying for the work at Nikola Tesla A thermal plant, southwest of Belgrade.

Serbian power company EPS said that the project will cut sulphur dioxide emissions to below the EU standard of 400 milligrams per cubic meter.

Nikola Tesla A is Serbia’s biggest power plant and provides half of the country’s electricity.