Run-of-the-riv­er hydropow­er in Ser­bia: an attrac­tive invest­ment

Run-of-the-riv­er hydropow­er in Ser­bia: an attrac­tive invest­ment

Ser­bia is pow­er­ing ahead towards EU mem­ber­ship. Investors are cur­rent­ly still able to secure favourable returns, but this advan­tage will dis­ap­pear into thin air when Ser­bia joins the EU, so the time to invest is now. Ali­quan­tum Energy’s small run-of-the-riv­er hydro­elec­tric pow­er plants offer an attrac­tive invest­ment sto­ry: a secure invest­ment with high guar­an­teed feed-in tar­iffs. Apart from which – hydropow­er is not only effi­cient, it’s also clean.

Ser­bia is on its way to becom­ing a mem­ber of the Euro­pean Union: acces­sion could be com­plet­ed as ear­ly as 2025, as the Euro­pean Com­mis­sion announced at the pre­sen­ta­tion of its new West­ern Balka­ns Strat­e­gy in Feb­ru­ary 2018. This goal is ambi­tious but real­is­tic, accord­ing to EU Enlarge­ment Com­mis­sion­er Johannes Hahn. To get there, Ser­bia must con­tin­ue to imple­ment its reforms swift­ly because, as Hahn said, the EU is not going to relax its acces­sion cri­te­ria: get­ting things right is more impor­tant than get­ting them done quick­ly.

EU acces­sion: Ser­bia is con­sid­ered a mod­el stu­dent

Those in the know regard Hahn’s state­ment as a clear sig­nal that the EU has learned from the mis­takes made dur­ing pre­vi­ous acces­sion rounds. But in any event, Ser­bia is con­sid­ered a mod­el stu­dent among can­di­date coun­tries – as is Mon­tene­gro, which also has good chances of secur­ing ear­ly EU mem­ber­ship.

Ser­bia moves up in the World Bank league table

Serbia’s rise in the World Bank rank­ings is a good sig­nal for investors, with the coun­try climb­ing 50 places in five years. Right now, Ser­bia occu­pies 43rd place, leav­ing coun­tries like Croa­t­ia, Bul­gar­ia and Hun­gary trail­ing in its wake.

Com­pa­nies ben­e­fit from get­ting in ear­ly to secure prof­its

Investors in the EU have long since real­ized that Ser­bia is an attrac­tive region for invest­ment, with almost 85% of for­eign direct invest­ment (FDI) in Ser­bia com­ing from EU coun­tries. Erik Schäfer from Ali­quan­tum Ener­gy also sees great poten­tial in the West­ern Balka­ns region. The busi­ness expert, who has already led many com­pa­nies to suc­cess, knows why now is the per­fect time to invest in Ser­bia: “Investors are still able to get the ben­e­fit of favourable returns. If Ser­bia joins the EU, that advan­tage will be lost.”

Renew­able ener­gy – a secure invest­ment

That’s why Ali­quan­tum Ener­gy is already invest­ing in renew­able ener­gy in Ser­bia and, in so doing, is com­mit­ting itself to a secure invest­ment mod­el. Indeed, finan­cial experts are quick to see the ben­e­fits of these tan­gi­ble invest­ments. For exam­ple, Moris Isik from Swiss com­pa­ny Green­match empha­sized in an inter­view in March 2018 that, in his opin­ion, invest­ments in renew­able ener­gy pow­er plants are good invest­ments because they pro­vide sta­ble, pre­dictable and eas­i­ly struc­tured cash flows over a lengthy peri­od of time.

Guar­an­teed feed-in tar­iffs for up to 15 years

With its team of expe­ri­enced local project devel­op­ers, Ali­quan­tum Ener­gy spe­cial­izes in small run-of-the-riv­er hydropow­er plants that are par­tic­u­lar­ly attrac­tive to investors for many rea­sons. Around 60% of the eco­nom­i­cal­ly viable hydropow­er poten­tial in Ser­bia is ready and wait­ing for investors, accord­ing to Schäfer: “Such invest­ment oppor­tu­ni­ties are very rare in Europe these days.”

As a val­ue propo­si­tion, hydro­elec­tric pow­er is “long-life­time stuff, and actu­al­ly quite bor­ing,” adds Schäfer. Any­one look­ing for min­i­mum-risk invest­ment is in the right place here, with investors gen­er­al­ly able to rely on feed-in tar­iffs of 10 to 15 years, guar­an­teed by the state elec­tric­i­ty providers.

Hydropow­er: clean and effi­cient

Added to this is the fact that the plants run for many decades with­out much in the way of main­te­nance or repair invest­ment, and the tech­nol­o­gy is mature, reli­able and proven. “With effi­cien­cy lev­els of around 90%, hydropow­er has a clear edge on oth­er renew­ables,” explains Schäfer.

Although, strict­ly speak­ing, the term “renew­able” does­n’t real­ly apply to small run-of-the-riv­er hydropow­er plants, because the water used to gen­er­ate pow­er large­ly runs back into the riv­er unchanged, with­out dis­turb­ing the eco­log­i­cal bal­ance. Blue ener­gy is also good for the envi­ron­ment.