The International Monetary Fund (IMF) has released a report on Serbia’s energy sector as part of the new three-year agreement with the country. The report discusses the financial stress still affecting state-owned energy companies despite improvements under a stand-by arrangement. It also addresses the potential privatization of the Resavica mine and focuses on opportunities in other state-owned entities, including Elektroprivreda Srbije (EPS), Elektrodistribucija Srbije (EDS) and Putevi Srbije.
Serbia’s government has outlined its intention to manage subsidies for the Resavica mine transparently and assess the feasibility of privatizing the company. If privatization is not possible, Resavica will be managed under the new Law on Business Companies Owned by the Republic of Serbia. The mine has faced restructuring challenges since 2006, and discussions on its privatization date back to 2013.
The IMF also flagged the worsening financial position of EPS due to expensive electricity imports during a drought, as well as the weak financial state of EDS, which has not raised network fees since 2021. Despite these challenges, the Serbian government has committed to supporting state-owned energy companies, while avoiding new state guarantees for their liquidity needs.
A major reform of public transport is underway, with plans for replacing old vehicles and introducing more environmentally friendly electric vehicles. The government aims to reduce public debt slowly and continue reforms of state-owned enterprises, including the privatization of problematic assets like the Methanol-Vinegar Complex (MSK).
The IMF’s report also notes concerns over rising ad-hoc government expenditures, particularly in areas like Roads of Serbia and the Health Fund, and urges the government to assess spending needs more carefully. Furthermore, the government plans to adopt a by-law on public service costs by March 2025, with full implementation set for 2028.
Overall, the IMF’s conclusions suggest that while Serbia’s energy sector is undergoing significant reforms, it still faces considerable financial challenges, and the path to sustainable management and privatization remains complex.
