- Erste and EBRD arrange a 91.4 million euro loan for Enlight’s second power plant in Serbia
- The project is first to reach financial close under Serbia’s 2023 renewables auction scheme
- 94 MW windfarm to begin operating commercially in H2/2025
Erste Group Bank AG and its local bank in Serbia Erste Bank a.d. Novi Sad (collectively: “Erste”), together with the European Bank for Reconstruction and Development (EBRD), have approved a financing package worth 91.4 million euros for the construction of a new windfarm in Serbia, which will be built by Enlight Renewable Energy (Enlight). The financing package will provide a major boost to the country’s goal of diversifying its energy mix.
Erste and the EBRD will provide parallel loans, worth EUR 45.7 million each, including the associated debt service reserve facilities. Enlight’s local subsidiary will use the proceeds to develop, construct and operate the 94-megawatt (MW) windfarm, which has been originated by Enlight and New Energy Solutions (NES), and named in honour of Mihajlo Pupin, one of Serbia’s greatest scientists. The Pupin project is expected to begin operating commercially in the second half of 2025. It is an extension of the existing Kovačica (Blacksmith) windfarm in Vojvodina, which is also owned by Enlight and was financed by the same lenders in 2017.
Once commissioned, the Pupin windfarm will be able to supply clean, green electricity to more than 40,000 households, equivalent to the number of households in a medium-sized city like Zrenjanin. The windfarm will also help to reduce the carbon intensity of Serbia’s power sector and advance its green economy transition. Coal still dominates electricity production in Serbia and the financing package comes at a time when the country faces an urgent need to diversify away from fossil fuels to help address its long-term structural energy challenges.
This project was financed under Serbia’s first renewable energy auction for wind capacity, which took place in 2023 and awarded contract-for-difference for 400 MW. A second and third auction, each for 300 MW of wind capacity, are expected to take place in 2024 and 2025, respectively. Similar auctions will be held in parallel for solar power plants. The scheme was developed and launched with technical and policy support from the EBRD and was funded by the Swiss State Secretariat for Economic Affairs (SECO). The scheme encourages the market integration of renewables, as developers receive support in line with market prices, as well as income from the sale of electricity.
Wolfgang Hargassner, Head of Corporate Finance at Erste Group, commented: “The financing of the first windfarm project under Serbia’s new renewable energy auction scheme marks a major step on the country’s path to green energy transition and we hope it will pave the way for other projects in the future. The realisation of the Pupin project is thanks to the great cooperation and unwavering commitment among all the parties involved, including investors, banks, advisers, the power off-taker, the turbine supplier, and many others.”
„For Erste Group and Erste Bank Serbia, every investment in renewable energy sources is extremely important. Pupin windfarm represents another big step forward in Serbia's green transition and we are really proud to be part of such an important project,“ stated Nikola Stamenković, member of the Executive Board of Erste Bank Serbia, at the official ceremony of signing the set of contracts that finalized this financial arrangement. „We believe that Pupin windfarm, the fifth windfarm in our local portfolio, will significantly contribute to the further diversification of energy sources and thus have a positive impact on several social aspects: from economic growth, contribution to the further development of this area, through preservation and protection of the environment, to the health of our citizens“, he added on this occassion.
Matteo Colangeli, EBRD Regional Director for the Western Balkans, said: “Serbia’s decision to move ahead with auctions is proving to be a game changer in terms of unlocking the country’s renewable energy potential. We are pleased to see Pupin being the first project to reach financial close and moving quickly through implementation, proving that speed of execution and best practice in terms of environmental and social standards can go together. We are committed to support Serbia’s second wind and solar auction later this year to continue accelerating the country’s green transition”.
“Building the Pupin windfarm in close proximity to our existing Kovačica site represents a noteworthy implementation of our ‘Interconnection Expand’ strategy,” commented Gilad Yavetz, CEO and co-founder of Enlight Renewable Energy. “We were able to leverage the technical knowledge and transmission infrastructure that was already in place at Kovačica, resulting in greater efficiency and higher returns for Pupin. In addition, we were fortunate to engage once again with our partners EBRD and Erste for financing of the Pupin project; these are the same lenders who supported us in the development of the Kovačica site.”
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About Erste Group
Erste Group is the leading financial services provider in the eastern part of the EU. Its ca. 45,000 employees (FTE) serve around 16 million customers in about 1,950 branches in 7 countries (Austria, Czechia, Slovakia, Romania, Hungary, Croatia and Serbia). For the financial year 2023, Erste Group had EUR 337 billion in total assets, posted a net profit of 2.99 billion euros, and had a common equity tier 1 ratio (CET1, final) of 15.7%.
About Erste Bank Serbia
Erste Bank a.d. Novi Sad is the oldest financial institution in the country, founded in 1864 as the first savings bank (Novosadska štedionica). In 2005, it became a member of Erste Group. Erste Bank's network in Serbia today consists of 87 retail branches, as well as four commercial centers, within which over 1,300 employees serve more than 500,000 clients. The Bank is strategically committed to financing energy efficiency projects and renewable energy sources and is the market leader in this segment.
About Enlight
Enlight, develops, finances, constructs, owns, and operates utility-scale renewable energy projects, employing solar, wind and energy storage technologies. The company operates in the United States, Israel and 9 European countries, and is listed on NASDAQ (ENLT) and the Tel Aviv Stock Exchange (ENLT.TA)
About the EBRD
The EBRD is a leading institutional investor in Serbia. The Bank has invested EUR 9 billion across over 350 projects in the country to date.