Helping the private sector to power Serbia’s renewables rollout

At COP28, countries committed to tripling global renewables capacity to 11,000 GW by 2030, requiring significant annual investment—about US$ 78 billion in EBRD regions. In Serbia, coal still generates 66% of power and the renewables market is weak. Early feed-in tariff projects from 2016 stalled without competitive auction frameworks, and authorities lacked experience in running large-scale auctions. Legislation to enable the implementation of support schemes for renewables in line with the practices in the EU – in particular, relying on competitive bidding processes such as auctions – was lacking. Moreover, the authorities lacked experience in implementing such auctions that could procure capacity at scale. Without addressing these constraints, Serbia risked falling short of its decarbonisation goals and limiting opportunities for private sector participation in the energy transition. 

The EBRD has provided Serbia with a comprehensive package of policy engagement, advisory support, and capacity building, particularly to the Ministry of Mining and Energy. It supported the drafting of the 2021 Renewable Energy Law and 2023 amendments to accelerate capacity integration while protecting grid stability. The Bank also designed the country’s first competitive auctions, preparing documentation, evaluation procedures, and a Contract-for-Difference scheme to reduce price risk for investors.These reforms have quickly delivered results. Serbia adopted a plan to auction 1.3 GW of renewables by 2025, with 1,220 MW already awarded. The first two auctions in 2023–24 allocated nearly 1.3 GW of wind and solar projects, effectively doubling renewable capacity. Early successes include the 95 MW Pupin Wind Farm (€123m, co-financed by EBRD/Erste), the 150 MW Čibuk 2 Wind Farm (€239m, privately financed), and four smaller solar projects (25 MW) backed by commercial banks. All projects from the second auction round have now reached commercial close, underscoring growing investor confidence and mobilisation of private capital.

The reforms and first-mover projects in Serbia have generated a ripple effect beyond the immediate auction rounds. By introducing competitive, CfD-backed renewable energy auctions for the first time, Serbia established a replicable and transparent procurement model that has set new benchmarks for cost competitiveness. The entry of major international developers, such as Enlight, Masdar, and Taaleri, has altered the competitive landscape, increasing diversity and capability in the market.Institutional capacity within the Ministry of Mining and Energy has been strengthened, enabling national authorities to run future auctions with reduced external support. Legislative changes have also created a more predictable and bankable environment for renewables, embedding the auction framework into Serbia’s national energy strategy. These reforms and demonstrated successes are influencing broader market liberalisation in the electricity sector, while knowledge sharing and skills gained through the process are beginning to diffuse across both the public and private sectors. As a result, Serbia is now positioned not only to scale up renewables but to sustain private sector participation in the long term.

Serbia’s renewable auctions were enabled by strong government commitment to EU-aligned transition goals, regulatory reforms, and the CfD scheme, which together created momentum and attracted large-scale private investment. Transparent, well-tailored auction design strengthened investor trust, with the Ministry of Mining and Energy leading as both policymaker and auctioneer, and reputable developers and lenders ensuring bankable projects. Beyond auctions, the EBRD provided a €300 million liquidity package to Elektropriveda Srbije (EPS) during the 2022 energy crisis, reinforcing cooperation and building momentum for reform. The main lesson is that successful renewable deployment in emerging markets requires an integrated approach: regulatory reform, predictable investment signals, balanced risk allocation, and capacity building. Serbia’s experience demonstrates that well-designed first-mover auctions can catalyse systemic change, set cost benchmarks, and embed replicable procurement models for sustained market growth.