Canadian investment in Serbia

Tuesday, 19/06/2012

Canada's Reservoir Capital Corp. said it has completed a feasibility study for the Brodarevo 1 and 2 hydroelectric projects and related infrastructure on the river Lim, in southwestern Serbia.

"We are very pleased to have reached this important milestone and encouraged that the feasibility study projects a solid economic return on both Brodarevo 1 and 2," Reservoir's president and CEO Miljana Vidovic said in a press release.

Reservoir's independent hydroelectric power consultant Energoprojekt Hidroinzenjering has recommended a capacity increase from the pre-feasibility of 58.4 megawatts to 59.1 megawatts, with a corresponding output of 232.5 gigawatt hours per year, the company said in the press release.

The total capital cost of the project is estimated to be 145.83 million euro ($185 million), including 34.08 million euro related to the construction of 7.31 kilometres of new road and tunnels on the M21 highway between Prijepolje and Bijelo Polje, it added.

Reservoir anticipates 30% of the project capital will be financed by equity and intends to obtain debt from a syndicate of lenders for the remaining 70%. For the purposes of the feasibility study, the company has assumed, based on preliminary discussions with potential lenders, that the debt will have a 15-year term from initial drawdown and be subject to an annual interest rate of 6.5%.

Vancouver-based Reservoir holds four geothermal exploration licenses in Serbia and is applying for three hydroelectric concessions on the Cehotina River in Bosnia.