MAT: EPS’s debt exceeds 1.5 billion euros
The debt of Elektroprivreda Srbije (EPS) increased by 50 percent in three quarters of 2022 and exceeds EUR 1.5 billion.
This is stated in the article „The effects of the global energy crisis on the operations of Elektroprivreda Srbije (EPS), Srbijagas, Elektromereza Srbije (EMS) and Transportgas in the context of budgetary risk“, published in the latest issue of the journal Makroekonomske analize i trendovi (Macroeconomic Analyses and Trends – MAT).
„EPS’s liquidity has continuously deteriorated since May 2021 due to reduced operation of hydroelectric power plants, later import of electricity at record high market prices, low prices for guaranteed supply,“ said Edvard Jakopin and Natasa Cokorilo in an article.
EPS’s electricity import, as stated, was almost exclusively financed by borrowing, and in the first nine months of this year the company made a loss of 678 million euros.
By September, Elektroprivreda had acquired a total of 2,907 GWh at an average price of EUR 254 per MWh, which cost about EUR 740 million. „The purchased electricity was sold at a price lower by four to five times on the domestic market,“ the article said.
If Srbijagas continues like this…
The problems of Srbijagasin gas supply began, the analysis showed, in the heating season 2021-2022, and they escalated with the outbreak of the crisis in Ukraine. A large budget cost was incurred during the heating season, as intervention from the budget of about 500 million euros was necessary, which is one percent of gross domestic product (GDP).
Srbijagas’ total liabilities increased by 72 percent at the end of 2021, reaching EUR 1.3 billion, but the profit in 2021 was EUR 32 million.
In December 2021, the Government of Serbia froze domestic gas sales prices, and all losses of Srbijagas were borne by the budget.
In the heating season 2021/2022, gas worth EUR 1.09 billion was purchased and sold for EUR 604 million, which means that the negative effect of the increase in gas import prices is EUR 486 million, which is also a direct budget cost.
Assuming the same gas purchase prices as in the fourth quarter of 2021, the purchase of gas in 2022 will require EUR 1.4 billion, and the sales revenue would be twice lower, EUR 720 million, so the budget cost of gas price growth in 2022 would amount to EUR 557 million.
The joint stock company EMS and Transportgas operate continuously positively and they do not pose any risk to the budget.