Serbia, Securum Equity ink memorandum on EUR 2bn solar plant project.

By bne IntelliNews May 9, 2012
The Serbian government said it signed on Tuesday, May 8, a memorandum with Luxembourg-based Securum Equity Partners for the construction of a 1,000 MW solar park in the Balkan country. The park will span over 3,000 hectares of land and cost around EUR 2bn, environment minister Oliver Dulic was quoted as saying in a government statement following the signing ceremony. It is expected to become the largest individual solar park in the world. The electricity produced in the park will be exported in the EU and Serbia has no obligation to purchase the power under subsidised prices. The government will also take no part in the financing of the project but will collect some EUR 750mn worth of taxes over the next 20 years, Dulic said. The country will, however, provide the investor with the required land for the project free of charge for a 25 year period. The location of the plant has not yet been chosen, though estimates show that southern Serbia hides the biggest sunshine potential. The construction of the park will last three to five years and require some 2,500 to 3,000 workers. Once the plant becomes operational, it will require 500 to 600 people to service it. Construction may begin in early 2013, provided that a suitable land plot is chosen and all necessary permits are secured. Italian photovoltaic panels producer MX Group will be engaged in the construction, Dulic said, adding that there is a likelihood that the company moves its European production to Serbia. In February, daily Vecernje Novosti reported that MX Group signed a EUR 1.75bn contract with Securum Equity Partners for the job. The daily reported back then that MX Group is considering the option of setting up a unit for production of solar panels in Serbia for the purpose of this project, as well as for exports. The report quoted MX Group representative Carmelito Denaro as saying at the Securum project presentation held in February in Belgrade that a future MX Group plant is Serbia could produce between 80 and 120 MW of photovoltaic panels a year and have an annual turnover of EUR 40-70mn. The plant would employ 80 people. Securum Equity Partners said in November that it has designed a special financial vehicle for the project, the NEPER Fund, via which all necessary investments will be made. The investment plan proposes a minimum annual return for investors of 15% guaranteed for 20 years. Serbia's state secretary for ecology and spatial planning Bojan Djuric said last year that power utility EPS and grid operator Elektromreza Srbije confirmed the solar plant project is technically viable and the grid can accommodate additional 1 GW. The plant will be twice bigger than the current world leader - a 500 megawatt solar park in California, news agency eKapija has reported.

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