Serbia could lose European
Union funding for a major pipeline project if it fails to reform
indebted gas company Srbijagas by July, an organisation in
charge of extending the EU's energy policy to would-be member
states said on Monday.
Under pressure to liberalise its gas and power markets on
the road to EU membership, Serbia in 2014 adopted a plan to
separate the transport and supply arms of the state-owned
utility by the end of June, turning it into a holding company
incorporating the two units.
But Janez Kopac, who heads the Energy Community - an
international body established by the EU and eight aspiring
member states - said "there has been little progress since."
Saddled with debts of 1 billion euros ($1.2 billion), but a
valuable source of political influence, Srbijagas has for years
avoided being broken up due to fears among company executives
and their political overseers about losing market monopoly.
"We gave the government a July deadline to complete
restructuring and if that does not happen we will propose
sanctions for Serbia," Kopac told journalists in Belgrade.
He said sanctions would include withholding 50 million euros
of EU funds allocated for a gas pipeline link between Serbia and
Bulgaria.
"From what we have seen so far, we have no credible reason
to believe Serbia will meet this deadline," Kopac said.
Serbia is in the midst of the campaign ahead of April 24
parliamentary elections and it could take weeks to form a new
government after that, though Kopac said this had not caused a
delay.
The gas pipeline with Bulgaria is crucial for Serbia's aim
to diversify its gas supplies and reduce dependency on Russian
gas, which accounts for more than 80 percent of its needs.
It would also make it possible for Serbia to receive gas
from the Trans-Adriatic Gas Pipeline (TAP) and the
Trans-Anatolian Gas Pipeline (TANAP), as well as from the
liquefied natural gas (LNG) terminal in Alexandroupolis, Greece,
which will be connected to TAP.
The Energy Community was established in 2006 under a treaty
signed by the EU and a number of countries in southeastern
Europe that aspire to join. It reports annually to the bloc on
progress made in harmonising energy legislation.
(Reuters)