In order for the Serbian national power company (EPS) to function smoothly in the coming period it will have to borrow an additional one billion Euro, research and publishing center Demostat learns from sources in the Serbian Government.

The reason why the EPS will have to apply for new loans is the extremely poor financial situation in the company which is due to the disastrous business policy pursued by former company director Milorad Grcic who was forced to resign over this on January 12, 2022. Grcic is an official of the ruling Serbian Progressive Party (SNS).

The authorities expect the new company management, with acting director Miroslav Tomasevic at helm, to sort out the chaos that Grcic left behind due to his incompetent and arrogant management. However, this is not possible without a capital injection into EPS, which was reduced to poverty during Grcic’s term in office. Due to poor quality coal, its insufficient quantities and lack of heating oil, last winter season the EPS produced less electricity than planned, Demostat’s source explained.

The plan is for the EPS to borrow 700-800 million Euro from banks. The option that is being considered is for the rest of the money to come in the form of a state subsidy, while there is fear that EPS ownership transformation is taking place so company shares would be pledged in order to secure loans, Demostat said. However, a Demostat source close to EPS says this will not happen but that the government will provide guarantees for the loan.