The agreement covers development and enhancement of existing energy generation plants in the Serbian republic as well as planning, construction and operation of new power plants. Modernisation, extension and operation of run-of-river hydropower plants and expansion of an existing lignite-fired power plant with an adjacent lignite mine have been identified as the first joint projects. The hydropower plants with an installed capacity of around 920MW are situated on the Drina and Danube rivers.

“I am delighted with today´s singing of this memorandum between RWE and EPS,” commented Aleksandar Vucic, Serbia´s Deputy Prime Minister. “It is the beginning of a wider strategic partnership that includes important energy generation projects in our country. Hydropower in particular offers great opportunities for cooperation.”

The MOU – signed by Serbian Deputy Prime Minister, Alexander Vucic, and Peter Terium, CEO of RWE AG in the presence of German Economics Minister Dr. Philipp Rösler – envisages a nine-month review phase to make a full technical and economic assessment of the existing power plants in Serbia. At the end of that nine-month period, a collaborative agreement will follow, which will specify the details of the projects to be undertaken and the respective responsibilities of the strategic partners.

“Our focus lies on maximisation of existing run-of-river hydropower plants in Serbia,” said Dr. Hans Bünting, CEO of RWE Innogy. “By adopting targeted modernisation measures and streamlined business management practices, we will be able to enhance the efficiency of these plants. In addition we plan to extend the use of hydropower there even further. Unlike the situation in Germany, there is plenty of potential for expansion in the rivers of Serbia.”

In May 2011, RWE Innogy entered into a joint venture with EPS on the development of five hydropower plants on the Morava River with a total capacity of 150MW. Feasibility studies are currently being conducted for these plants. Construction of a series of power plants could then begin from 2014. Once completed, the plants should be able to generate 650GWh of electricity. These projects will also be included in the MOU.