Serbia’s state-run utility Elektroprivreda Srbije (EPS) has signed a preliminary agreement with a Chinese consortium including China Environmental Energy Holdings and Shenzhen Energy Group to jointly build a 774 MW coal fired plant at cost of up to €2bn ($2.7bn).

The deal would cover building the coal-fired unit at the Nikola Tesla thermal plants complex in the town of Obrenovac and upgrading the Radeljevo coal mine that will feed the plant. EPS said it is also discussing with Chinese partners co-operation in renewable energy projects, especially biomass.

A financing agreement may be reached in the first quarter of 2012 and the projects would then take five years to complete, said EPS General Manager Dragomir Markovic. The Chinese companies will be majority owners in the planned joint venture, he said.

Serbia has agreed several energy projects with China as it seeks to upgrade energy infrastructure damaged or neglected during the 1990s. The country relies on coal for 70 per cent of its power and hydro for the remainder.

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