The Chinese company CMEC (China Machinery Engineering Corporation) has started building a new, third unit at the TPP Kostolac, with 350 MW of power.
The expected annual production of electricity is around 2.5 billion kWh. The value of the works is USD 613 million, and the project begins with the construction of a chimney and a system for chemical preparation of water.
The project in Kostolac is realized based on the interstate agreement of Serbia and China on the economic and technical cooperation in the field of infrastructure, which was signed on August 21, 2009.
The construction of U3 is part of the second phase of the realization of the project, along with increasing the production of the Drmno cut from 9 to 12 million tons of coal a year, so that sufficient amounts of coal would be secured for the new unit.
The total value of the second phase of the modernization of TPP Kostolac B is USD 715.6 million.
The Chinese Exim Bank secured 85% of the funds, whereas Elektroprivreda Srbije (EPS) provided 15%.
The repayment period is 20 years, including a grace period of seven years, and the fixed annual interest rate is 2.5%.
The construction of a new thermal unit is planned in line with the strictest European standards and technical regulations.
The agreement says that all the equipment to be built into the new unit will have to meet the European quality norms. The Ministry of Environmental Protection approved the Study of Environmental Impact of U3 this October.
Archaeological explorations in the location of the future facility were completed in line with the protection requirements of the Republic Institute for the Protection of Cultural Monuments for the zone of the archaeological location Viminacium.
As part of the first phase of the project, revitalization of units U1 and U2 at TPP Kostolac B were completed. The units now produce electricity at the total power of 700 MW, and a new facility for desulfuring smoke gases has been built as well.
The first part of the Chinese credit arrangement includes the construction of infrastructural facilities, a port on the Danube, which started this year, and an 18-km railway for transport of limestone and equipment.
The contracted value of this part of the project is USD 344.6 million.