Reports indicate the depth of the problem due to the break in the operation of the Thermal Power Plant: Price increases avoided with loans

Last year, for the period April - November, when the Pljevlja Thermal Power Plant was not operating due to reconstruction, the Electric Power Company (EPCG) had to import 1.341 GWh for a total of 142 million euros in order to ensure a regular supply of electricity, according to a management report from the state-owned company published with the auditor's report for 2025.

This means that the average price of an imported MWh was 106 euros, while EPCG sold this electricity to citizens last year at a price of 55 euros, meaning that the company lost about 49 euros for each imported megawatt. The list of EPCG's credit obligations in the audit report shows that EPCG took out four special-purpose loans last year for the purchase of imported electricity totaling 78,5 million euros. This means that the company took out loans to buy the missing amount of electricity for regular supply, which it then sold to domestic consumers at half the price. Three loans were taken out at fixed interest rates of 2,99 to 3,9 percent, and one with a variable interest rate of 1,6 percent plus Euribor. The largest loan for this purpose is from Erste Group for 50 million, which is repayable by July 2029.

The company's management has repeatedly announced over the past year that it will not increase electricity prices for consumers, that is, that it will cover the expected losses due to the eight-month break in the operation of the Thermal Power Plant from accumulated profits and its own funds. The lack of domestic production and the greater need for imports were also affected by poor hydrology, which is why production from the Perućica and Piva hydroelectric power plants was 74 percent of the planned level. All of this contributed to EPCG's operating loss of 92 million euros last year. The total amount of gross earnings in 2025 amounted to 28,5 million euros, which was two and a half million less than in 2024. The number of employees was reduced by 46.

In addition to the need for imports of 142 million euros, EPCG spent 86,8 million euros on investments last year, which is 34 million more than in 2024. The most money last year went to the ecological reconstruction of the Pljevlja Thermal Power Plant, 32,6 million euros, and 27,5 million to new renewable energy sources (Gvozd wind farm, Slano, Krupac, Željezara solar power plants, preparation of documentation for the Kruševo and Otilovići hydroelectric power plants, a new generator for Perućica...).

EPCG provided the missing money for electricity imports and investments by spending accumulated profits from previous years of 70 million, as well as through new borrowing. Total withdrawn credit borrowings at the end of 2025, according to data from the auditor's report, amounted to 179,3 million, while at the end of 2024 they were 111,7 million euros. 141 million relate to long-term loans, and 28 million to short-term ones. Part of these loans of about 38 million is due for collection during this year.

The total amount of contracted loans is higher than the stated loan obligations, because the part of the union withdrawn will already be used according to the investment implementation plan. The largest individual loan of EPCG is of 107 million euros, which was taken in 2023 from the European Bank for Reconstruction and Development for the construction of the Gvozd wind farm. Repayment of this loan lasts until 2035. The second largest investment loan is of 40 million euros, taken in 2024 from the German development bank KfW for the reconstruction of the Perućica hydroelectric power plant. It will be repaid from 2029 to 2039. The first loan for the modernization of Perućica of 33 million was taken from the same bank in 2019, of which 19 million have been withdrawn so far.

EPCG has an active loan of 23 million euros from the state-owned Development Bank EPCG for the development of the “Solari” project. For this project, in recent years, four more loans of 34 million euros were taken from Prva, Razvojna, NLB and CKB banks. EPCG has a loan of 25 million euros from CKB for the reconstruction of the Thermal Power Plant, which will begin to be repaid from September 2026 to December 2030...

Positive opinion of the auditor, with one remark

The auditing firm BDO gave a positive opinion on EPCG's financial statements for last year, with one qualified opinion.

It was pointed out that the total assets of EPCG at the end of last year amounted to 760,4 million euros, and that for the part of the assets of 23,6 million (three percent) that was registered in the company's books, there are unresolved property disputes, that is, there is no final documentation on ownership. This is the auditor's only remark on EPCG's financial statements.