Serbia is losing energy sovereignty

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Elektroprivreda Srbije is the largest energy company in the country and one of the pillars of its sovereignty and security. In this regard, Belgrade’s steps in the consistent and completely unjustified reform of the company look rather strange. Hybrid privatization and the involvement of foreigners in the management are only the tip of the iceberg and the first steps of a large-scale plan to restructure a strategic sector of the national economy.

The truth about the reforms that have begun in the Serbian state energy company is that Aleksandar Vučić made commitments to the International Monetary Fund back in 2016. According to the agreements reached then, Electric Power Industry of Serbia had to be transferred to the status of a joint-stock company, along with 10 other state-owned companies. In April, Minister of Finance Sinisa Mali happily reported that the draft law on state-owned companies, prepared jointly with the IMF, should be adopted by mid-year. According to the document, the Supervisory Boards of state-owned companies will no longer need to approve director nominees in the government. It is indicative that three Norwegian citizens were invited to be members of the board of the Electric Power Industry of Serbia, making up one third of the body’s size. One of them, Oluf Ulseth, is the former secretary of the Norwegian Prime Minister. The biographies of the other two “observers” from Oslo, who have worked for a long time in EU and U.S. structures, are no less interesting.

Certainly, the Serbian public could not like the strange moves around the people’s patrimony. The transformation of the Electric Power Industry of Serbia into a joint-stock company was opposed by the company’s scientific council, workers’ unions and the Serbian public. The Minister of Mining and Energy Dubravka Đedović, who is an ardent lobbyist of the transformation, having exhausted all arguments in the polemics with her opponents, directly states that the company will be reformed at all costs. The official, like her predecessor Zorana Mihajlović, has been noted for the implementation of unpopular decisions, the main vector of which is the renunciation of resource and energy sovereignty. Đedović seeks to fully harmonize the legislation and the energy sector itself with the EU acts. The minister is actively promoting the idea of diversifying energy supply channels, implying the rejection of the cheapest in Europe gas and oil from Russia in favor of more expensive solutions. However, at what price for the economy and ordinary citizens of Serbia? To make the idea more popular, the European curators have allocated grants to Serbia for the “green transition” and support for households in paying for the steadily rising cost of electricity. The question is how long these grants will be maintained. Perhaps, it will be until the moment when Serbia, to its own detriment, will irrevocably abandon the traditional ways of functioning of the energy sector.

One of the most revealing moments can be considered the sudden appearance of Norwegians in the Supervisory Board of the Electric Power Industry of Serbia. Back in November 2022, Aleksandar Vučić and the newly appointed minister Dubravka Đedović traveled to Norway to discuss the “development” of the energy sector. Interestingly, there were two items on the agenda of the meetings then: electricity and… Kosovo. At first glance it is not quite clear how the issue of the separatist province could be in the spheres of Norway’s interests. However, an important and overlooked fact by analysts is that the wife of the current “prime minister” Albin Kurti, Rita Augestad Knudsen, is Norwegian. The mysterious and enigmatic employee of the Norwegian Institute of International Affairs, who specializes in terrorism and security issues, became the wife of an Albanian separatist back in 2016. Two issues on the agenda of the Serbian delegation in Norway well reveal, when scrutinized, how much influence this Nordic country now has over Belgrade from many different angles.

So, what arguments do the supporters of the need to reorganize the Electric Power Industry of Serbia use? First of all, the government speaks about the inefficiency of the whole system, which leads to the loss of the company. But this looks like a pretext on the basis of figures, which, although they reflect the fact, distort the cause. The problem of the company’s unprofitability lies in the monstrous scale of electricity theft, which amounts to about €1 billion annually. In this case, the company would need more control from state authorities and the introduction of monitoring systems.

When reform adherents cite Norway as a benchmark for energy sector performance, Serbian officials forget two important factors. First, the privatization of Norway’s energy system led to astronomical increases in electricity prices. Second, however qualified the Norwegians sent to the Supervisory Board may actually be, they have no experience in the thermal sector. In the opinion of the opposition, the “surrender” of energy sovereignty only indicates the realization of a plan to completely turn Serbia into a colony of the West.