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.