Erste Group, as the major senior lender and agent, arranged and structured the transaction and invited other banks to join the lenders consortium in the financing of the first commercial renewable energy project in Serbia. Krivača is the first wind farm to be built in Eastern Serbia, 120 kilometers southeast of Belgrade, and will cover 56 km² in the territory of the municipality of Golubac. With a capacity of 105.6 MW and 22 wind turbines, it will produce 310 GWh of green electricity annually. This is equivalent to supplying about 75,000 households and reducing carbon dioxide emissions by about 115,000 tons per year.

The basis of the project is a Power Purchase Agreement (PPA), according to which the buyer of electricity undertakes to buy electricity directly from the producer of renewable energy. The conclusion of the PPA represents a major milestone in Serbia's transition to green energy, marking a new chapter in the energy transition in the entire Southeast Europe. The investors behind this joint venture project, MK Group and the Slovenian ALFI Green Energy Fund, are investing 155 million euros in Krivača wind farm. The construction began at the end of the last year, and the wind farm is expected to be fully operational at the end of 2023. 

The importance of this investment was recognized by four banking groups, hence the consortium of creditors includes: Erste Group Bank AG and Erste Bank ad Novi Sad (together Erste), Raiffeisen Bank International AG and Raiffeisen bank ad Beograd (together Raiffeisen), NLB dd and NLB Komercijalna bank ad Beograd (jointly NLB) and the Austrian Bank for Reconstruction and Development (OeEB).

„The financing of the Krivača wind farm represents a major milestone for the energy sector of Serbia, and we hope that more important steps like this will follow to expand the role of renewable energy in Southeast Europe,“ commented Wolfgang Hargassner, Director of Corporate Finance at Erste Group. „The realization of Krivača was only possible thanks to the strong commitment of all parties, including investors, banks, advisors, electricity buyers, turbine suppliers, and many others.“

The Krivača wind farm, implemented by MK Group and ALFI Green Energy Fund, is a project that provides strong support for the achievement of the Government of the Republic of Serbia's goal of increasing the share of energy from renewable sources to at least 40 percent by 2040, and at the same time, it is an important step in the regional transition to green energy. „MK Group has been investing in renewable energy sources for years, and our long-term strategy includes further expansion in this area. Independently and through joint ventures, we are working on the development of wind energy projects of 320 MW and solar energy projects of 660 MW, which are investments worth close to one billion euros planned for the next five years,“ said Mihailo Janković, CEO of MK Group.

"We are proud to be part of the green transition of the Adria region. As the largest investment fund for renewable energy sources in the region, Alfi Green Energy Fund has ambitious plans for the development and construction of new wind farms and solar power plants throughout Southeast Europe. This will contribute to decarbonization and greater security in the supply of green energy," said Suvad Bajrić, Managing Director of ALFI Renewables.

The wind turbines to be installed in Krivača will be supplied by the German Nordex Group, one of the world's largest manufacturers of wind turbines, whose first project in Serbia is this undertaking. This is also the first renewable energy project in the country including a commercial power purchase agreement (PPA), which was concluded with the Swiss renewables’ producer and trader AXPO.

Domenico Franceschino, Head Origination West & East Europe at AXPO said: "We are pleased to facilitate yet another landmark agreement which advances the energy transition and supports the fight against climate change. While this is the first renewable PPA in Serbia, we are seeing an increasing number of companies seeking to purchase long-term electricity from renewable energy sources as part of their sustainability strategies“.

While Krivača is the first project of its kind in Serbia, Erste Group plans to support similar projects in the future, both in Serbia and in the region, as doing so helps to promote the region’s energy transition and support the fight against climate change, thus also being in line with the banking group’s sustainability strategy.