Serbia and Azerbaijan to jointly finance design of new power plant in Nis – What does the agreement between the two countries on the construction of a new plant in southern Serbia say?

The Serbian government has adopted the Draft Law on Ratifying the Agreement between the Government of the Republic of Serbia and the Government of the Republic of Azerbaijan on the Development, Design, Construction and Operation of a Combined Cycle Power Plant in Nis. The agreement was signed in Belgrade on February 15, 2026, and is valid for two years, with the possibility of automatic extension.

The aim of the agreement is to strengthen bilateral cooperation in the energy sector, ensure long-term supply of natural gas to Serbia from Azerbaijan, as well as establish the presence of SOCAR on the electricity market in Serbia and the region.

The parties agree to jointly finance the design phase, and the preparation of all necessary documents is also planned, including the Spatial Plan, Feasibility Study, Construction Permit Project and Environmental Impact Assessment. After the establishment of a special purpose vehicle (SPV), it will be responsible for the management and operation of the power plant.

It is also planned to form a working group to accelerate the implementation of the project, as well as to consider special investment regimes and incentives that would enable the efficient implementation and operation of the power plant. The parties will also ensure the continuous supply of natural gas from Azerbaijan, which guarantees stable electricity production in Nis.

The law stipulates that no additional funds from the Serbian budget will be required for the implementation of this agreement.

The spatial plan of Nis designates the area north of the village of Krusca as the area where the gas power plant will be built, and the exact location of the power plant will be determined by the Urban Development Project, said Nis City Councilor Ivan Grmusa.

Let us remind that it was recently announced that the contract for the construction of this power plant would be signed in April in Azerbaijan, and that it could be completed by 2029.

I. Z.

Vlada Republike Srbije

Spatial Plan of Nis

Government of Serbia

Draft Law on Ratifying the Agreement between the Government of the Republic of Serbia and the Government of the Republic of Azerbaijan on the Development Design Construction and Operation of a Combined Cycle Power Plant in Nis

Krusevac

Ivan Grmusa

gas power plant near Nis

construction of gas power plant near Nis