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EPS Restructuring



Project number:


Business sector:

Power and energy

Notice type:


Environmental category:


Approval date:

28 Oct 2015



PSD disclosed:

13 Jul 2015

Translated version of this PSD: Serbian

Project description and objectives

  •  EBRD investment will be conditioned upon an agreed plan for a comprehensive program of reforms of the Company and of the sector which will have a significant impact on the development, management and operational efficiency of the power infrastructure in Serbia.
  • The loan proceeds will be used to restructure and refinance expensive short to medium-term financial debt which EPS has entered into on an emergency basis with commercial banks in order to alleviate the deteriorating cash situation created by the unprecedented and catastrophic floods in Serbia in 2014. The Bank expects to lengthen the tenors and provide terms more consistent with EPS’s operations.

Transition impact

The Project addresses a key transition challenge in the country of improving the operations and commercialisation of the vertically integrated electricity company EPS. Through the Project the Bank has engaged with the authorities and coordinating with the World Bank to develop a significant reform package including the effective restructuring of the Company. EPS will be corporatized into a Joint Stock Company. The Bank will also engage a consultant through a TC assignment to perform a general corporate governance review and make recommendation to improve policies in particular for compensation, recruitment, nominations, planning and procurement. The adoption and implementation of a corporate governance and restructuring plan is a covenant of the loan agreement.

The Project supports the Bank’s policy dialogue efforts for reform in the sector especially with regards to tariff policy as well as supporting opportunities for the country to develop regional and internal market principles.

The expected transition impact rating is ‘strong to good’.

The client

Public Enterprise Elektroprivreda Srbije (EPS), the state-owned electricity utility of Serbia active in generation, distribution and supply of electricity

EBRD finance

Up to EUR 200 million sovereign guaranteed loan.

Total project cost

EUR 200 million.

Environmental impact

Category B (2014 ESP). As this project is a corporate restructuring without a specified investment plan, environmental and social due diligence is focusing on identifying opportunities to improve environmental, safety, social, and labour governance and capacity, and on helping EPS to develop a more strategic approach to managing these issues. EPS is faced with a number of on-going environmental and social challenges resulting from a legacy of under-investment, outdated plant and inadequate resources. Implementation of EBRD’s E&S requirement has in the past been mixed, but has improved steadily in recent years, in part driven by the Bank’s investments, TCs and monitoring work. At the Bank’s request, in 2012 EPS commissioned independent EHS audits of each of its subsidiary companies and developed action plans. These audits are currently being repeated to assess progress. Additional work will be required help define the E&S management systems and capacity for the re-structured company. EBRD is also proposing to help EPS to develop an environmental and social corporate strategy to identify and address priority issues and move the company towards good international practice.

Non-Technical Summary: English | Serbian
Stakeholder Engagement Plan: English | Serbian


Technical cooperation

 1) Corporate Environmental & Social Due Diligence

Amount: EUR 65,000, funded by Germany II Technical Cooperation Fund. Selected consultant: ERM GmBH
ERM is engaged to carry out the Corporate Environmental & Social Due Diligence and develop an Assessment Report, Environmental and Social Action Plan (“ESAP”), Stakeholder Engagement Plan (“SEP”) and Non-Technical Summary (“NTS”).

2) Corporate Governance TC

A consultant will be engaged to do a survey of the corporate governance gaps in the Borrower and provide an action plan to remedy these gaps. The Terms of Reference for the assignment will be agreed between the Bank, the EPS and Republic of Government. The amount and source of funding have not yet been confirmed.

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168

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