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The Government of the Republic of Serbia

In the service of citizens

€64.5 mln from National Investment Plan for energy sector

Belgrade, 24 November 2006

Serbian Minister of Energy and Mining Radomir Naumov said today that €64.5 million from the National Investment Plan will be set aside for the energy sector by the end of 2007.

Radomir Naumov

Naumov told a press conference that these funds will be invested in the development of the gas network, completion of underground gas storage as well as energy saving projects.

He expressed expectation that realisation of the project in the field of gas and building a gas pipeline from the Bulgarian border to Croatia through Serbia, our country will become a regional centre for gas transportation.

The Minister confirmed that the price of electric power in Serbia is not realistic and announced that in future prices will be set by the regulatory Energy Agency.

Milutin Prodanovic

Assistant Minister of Energy and Mining Milutin Prodanovic said that 21 gas projects were put forward as part of the National Investment Plan and added that these projects are covered by the National Gasification Programme.

According to Prodanovic, €11.1 million has been provided for the first phase of underground storage in Banatski Dvor, whereas €4.2 million has been set aside for the Batocina-Cvetojevac gas line.

Prodanovic explained that projects will include development of distribution networks in Vojvodina and gasification of Loznica, Nis, Bela Crkva, Kraljevo and Lucani.

He announced that the Ministry of Energy and Mining and the Ministry of Science and Environmental Protection will start an initiative to provide extra funds for gasification of Pancevo.

Vladan Karamarkovic

Serbian Assistant Minister of Energy and Mining Vladan Karamarkovic said that in the framework of the National Investment Plan a sum of €10 million has been set aside for loans for constructing houses with inbuilt isolation materials to reduce the cost of heating and for environmental protection.

Karamarkovic explained that these loans are interest free, with a payment deadline of five years and a grace period of two years.

According to Karamarkovic, a sum of €3 million has been secured for a project of well exploitation for using geothermal energy, and €2.5 million for increasing energy efficiency and saving thermal energy by measuring energy spent with calorimeters.

Serbian Minister of International Economic Relations and coordinator in the Ministry of Finance Milan Parivodic said at the press conference that investments made by the state should act as a stimulant for the private sector to make even larger investments.

Parivodic said that Serbia advocates reaching agreement with Croatia on initialing the Central European Free Trade Agreement (CEFTA).

Milan Parivodic

According to Parivodic, Serbia has understandable demands and sufficiently constructive proposals in order to fairly regulate relations between tobacco producers in Croatia and Serbia.

Parivodic recalled that State Secretary at the Ministry of International Economic Relations Vlatko Sekulovic reached agreement on November 20 after visiting Croatia on continuing negotiations between Serbian and Croatian teams on details which are hindering the signing of the CEFTA.

He recalled that, according to established excise policy, Serbia makes a difference between domestic and foreign cigarettes, so that excise duty is lower for domestic cigarettes than for imported ones, which is a controversial article for Croatia, which refuses to accept this condition.

The deadline for final synchronisation of positions on trade of tobacco products is December 12, 2006, seven days before the date envisaged for signing the CEFTA.