Serbia’s state-owned power utility Elektroprivreda Srbije (EPS) has revised the scale of its much-publicised investment programme, clarifying that the planned capital envelope amounts to €3.6 billion over the next three years. While the figure is far more realistic in macroeconomic terms, the underlying issue remains unchanged: the gap between announced investment plans and visible execution on the ground is still wide.
At €3.6 billion, the programme translates into roughly €1.2 billion per year, a level that would still represent a meaningful acceleration compared with EPS’s historical capital spending. Yet even at this adjusted scale, concrete signs of a sustained investment cycle remain limited. The bulk of activity continues to cluster around planning, analysis, feasibility studies and strategic documentation, rather than construction, procurement, and commissioning.
A more plausible number, the same structural pattern
The revised figure immediately places EPS’s ambitions into a more credible macro frame. An annual investment pace of around €1 billion is theoretically achievable for a utility of EPS’s size, particularly if supported by state guarantees, multilateral financing and supplier credit. However, feasibility in principle does not equal delivery in practice.
Looking at EPS’s realised track record over the past decade, annual investments have fluctuated significantly, often falling below planned levels due to delays in procurement, permitting, financing approvals and internal governance processes. The result has been a recurring cycle: ambitious multi-year plans announced upfront, followed by gradual slippage in execution timelines and downsizing of actual spend.
The current €3.6 billion plan risks following the same trajectory unless the balance decisively shifts from preparatory work to binding commitments.
Thermal power: Studies still outpace construction
Thermal assets remain central to EPS’s system reliability, particularly lignite-based plants such as Nikola Tesla A and B and Kolubara. These facilities dominate installed capacity and are repeatedly cited as priorities for modernisation, environmental upgrades and life-extension works.
In practice, most of the activity to date remains concentrated on technical assessments, environmental studies and optimisation analyses. Routine maintenance and incremental refurbishments continue, but these are part of standard operational cycles and do not constitute the deep capital upgrades often implied in strategic presentations. Large-scale modernisation packages that would materially change efficiency, emissions profiles or operating lifetimes have yet to translate into visible EPC contracts or site mobilisation.
As a result, thermal investment remains conceptually prominent but operationally cautious, with expenditure flowing more readily into consultants and studies than into heavy equipment and civil works.
Hydropower: Long pipelines, slow progress
Hydropower features consistently in EPS’s long-term vision, reflecting Serbia’s remaining untapped river potential and the strategic value of flexible generation. Yet here too, the pattern is familiar. Projects move slowly through feasibility, environmental screening and preliminary design, while actual construction starts are rare and often delayed by land acquisition, permitting complexity and financing negotiations.
Even within a €3.6 billion envelope, hydropower would require a concentration of capital and execution capacity that has historically proven difficult to sustain. The risk is not that projects are abandoned outright, but that they remain in extended pre-investment limbo, absorbing planning resources without delivering new capacity on the system.
Renewables: Targets without timetables
EPS’s investment narrative increasingly emphasises wind and solar, aligning with Serbia’s broader decarbonisation commitments. Announced ambitions often suggest hundreds of megawatts of new capacity over the medium term. However, most renewable initiatives linked to EPS remain at early development stages, dependent on unresolved questions around grid access, offtake structures and financing models.
Unlike private developers, EPS has been slower to push renewable projects to financial close, in part because its role oscillates between developer, offtaker and system operator. The result is a growing portfolio of planned projects with no fixed construction start dates, reinforcing the perception that renewable expansion is still more aspirational than executable within the stated timeframe.
Grid modernisation: Strategy before steel
Grid reinforcement and digitalisation are frequently cited as pillars of the investment plan, and rightly so given the ageing network and rising integration challenges. Yet most grid-related spending remains tied to studies, pilots and phased upgrades, rather than large-scale corridor reinforcement or substation construction.
High-voltage projects, in particular, require long lead times and decisive procurement. Without signed contracts and clear delivery schedules, grid investment risks becoming another area where strategic intent outpaces physical progress.
Hydrogen and storage: Conceptual add-ons
Within the €3.6 billion framework, hydrogen and energy storage appear more as policy-aligned placeholders than near-term investment drivers. These elements are largely confined to research initiatives, pilot concepts and donor-supported studies. While important for long-term positioning, they do not currently represent material capital deployment and should not be interpreted as contributors to near-term system transformation.
Why execution still matters more than scale
The correction from €36 billion to €3.6 billion removes the headline shock value, but it does not resolve the credibility challenge. For investors, suppliers and policymakers, the critical question remains whether EPS can convert plans into signed contracts, financed projects and visible construction activity.
Without that shift, even a more modest and realistic investment envelope risks being under-delivered. Delays carry real costs: ageing assets continue to operate under stress, inflation pushes up future capital costs, and Serbia’s energy transition timeline slips further.
What would signal a real investment cycle
A genuine transition from planning to execution would become evident through a small number of unmistakable signals: EPC contracts awarded for thermal upgrades, hydropower projects breaking ground, renewable plants reaching financial close, and grid reinforcements entering construction with defined milestones. Until those markers appear, the €3.6 billion plan remains an intention rather than an active capital cycle.
In that sense, the story is not about inflated numbers but about institutional follow-through. The revised figure is credible. The delivery, so far, is not.