New arrangement with IMF conceals electricity price increase

Source: Politika Wednesday, 08.08.2018. 10:44
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There's still no precise answer to the question of whether the price of electricity in Serbia will go up by the end of the year. The new arrangement with the IMF, signed by the Serbian government, however, says that “an analysis of tariffs for 2018” should be carried out in cooperation with the World Bank by the end of August. In other words, the analysis should show whether the price of electricity is to go up and by how much, Politika reports.

According to Eurostat, the price per kilowatt in Serbia is three times lower than the average price in the EU, which amounted to EUR 0.204 in 2017, whereas, in Serbia, it was 0.066. The country features not just the lowest prices in the region, but in Europe as well. Only Ukraine pays less for electricity.

Whereas EPS refuses to comment on the issue, another formal term of the World Bank loan confirms the possibility of a new price increase, saying that “the loan for developmental policy will help EPS bring the price of electricity for guaranteed supply closer to the market prices, from 64% at the end of 2014 to 80% at the end of 2018”.

When asked by Politika whether the condition is binding for EPS, the World Bank confirms that it is.

Professor Branko Kovacevic, the president of the Managing Board of EPS, responds to the question of whether the electricity price increase in Serbia is necessary or is being pushed through the IMF and the World Bank by lobbies looking to be competitive with the Serbian public enterprise in terms of prices, by saying that even with the current price of electricity, EPS makes a profit each year.


– EPS is not exactly burdened by debts due to the price of 6.5 cents. On the contrary, this public enterprise pays 60 to 70% of its profit to the state budget each year. This certainly doesn't mean that it wouldn't be good for EPS if the price were to increase, because it wouldn't be honest to says so, but in Serbia, this is still a political decision – Kovacevic says.

The company could use the surplus money, as it would mean more room for new investments, including investments in green energy. Kovacevic points out that there's no reason for solar and wind power to be used by private companies only and that this public enterprise could do so as well.
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