The recently signed Cooperation Agreement between Serbia and the United States in the energy sector opens new perspectives for the regional renewable energy market. Signed in October 2024, this agreement represents a key step towards modernizing Serbia’s energy sector, particularly in the areas of energy transition law and increasing renewable energy capacity, which are essential for both economic growth and sustainability.

Wider Context and Importance of the Agreement

The main focus of this Agreement is improving cooperation in renewable energy policy, energy efficiency, and reducing carbon emissions, aligning with global goals to cut CO2. Through this cooperation, Serbia will gain access to technical expertise, U.S. investments, and new technologies, especially in solar, wind, and hydrogen projects. These measures are crucial for reducing Serbia’s dependence on fossil fuels, particularly coal, which currently dominates Serbia’s energy sector.

The Agreement includes joint projects to develop green energy capacity and infrastructure to diversify energy sources. The U.S. will provide support through financing new investments and training specialists. Special emphasis is placed on the construction of wind farms and solar power plants, as well as investments in energy storage technologies, which are key to the stability of renewable energy systems.

Comparison with Bosnia and Herzegovina and Croatia

Unlike Serbia, Bosnia and Herzegovina and Croatia have already made significant progress in renewable energy projects, though these two countries are at different stages in developing their energy infrastructure.

Bosnia and Herzegovina

Bosnia and Herzegovina is becoming an increasingly attractive destination for investors due to its vast potential for clean energy investments. With its strategic location in the European energy market and vast potential for growth, the country offers numerous opportunities for international investors. Currently, there are 731 solar power plants installed in Bosnia and Herzegovina, and a massive project for 11,000 MW of solar capacity is under approval. To put this into perspective, the largest nuclear power plant in Europe has a capacity of 1,600 MW, underscoring the untapped potential of Bosnia and Herzegovina. For example, in the town of Stolac in Herzegovina alone, solar projects with a total capacity of 600 MW are being developed, matching the capacity of the Krško Nuclear Power Plant in Slovenia.

Moreover, Bosnia’s renewable energy sector offers some of the most favorable tax incentives in Europe, with a corporate tax rate of 10% and a VAT rate of 17%. Investors in this sector enjoy the same rights and protections as domestic investors, including protection from nationalization or expropriation, and the ability to transfer profits abroad. Bosnia’s commitment to green energy is further reinforced by its membership in the European Energy Community and its adherence to international energy agreements, positioning the country as a significant player in Europe’s sustainable energy future. The combination of a favorable tax environment, ambitious renewable energy projects, and a strategic location makes Bosnia and Herzegovina highly competitive for investors seeking opportunities in green energy projects.

Croatia

On the other hand, Croatia has a more advanced regulatory framework, aligned with the EU’s environmental compliance regulations, and a substantial number of renewable energy projects, particularly in wind power. As a member of the EU, Croatia is directly subject to EU legislative frameworks such as the European Green Deal, which gives it access to EU funds for energy transition. Croatia is also actively working on energy efficiency through regional programs and has established several wind farm projects in coastal areas. In contrast, Serbia, which is still in the process of EU accession, gains similar strategic advantages outside the EU framework through this agreement with the U.S.

Impact on Investors and Business Opportunities

Agreement between Serbia and the United States in the energy sector represents a tremendous opportunity for international investors focused on Serbia’s energy sector, especially those interested in renewable energy development. New regulations and support from American partners will facilitate the launch of renewable energy projects, reduce regulatory barriers, and attract larger foreign investments. Serbia is becoming increasingly attractive to foreign companies interested in green energy and energy technology investments, with this U.S. partnership underscoring the country’s serious commitment to energy transition.

The planned investments in green projects could also open doors for acquisitions and strategic partnerships with local companies. Greater transparency and technical support offered by the U.S. provide investors with confidence in regulations, risk reduction, and long-term returns on investments.

By signing this agreement, Serbia is entering a new phase of energy transition, with long-term economic and environmental consequences. Compared to its neighboring countries, this move positions Serbia as a regional leader in collaboration with major global players like the U.S. The agreement not only boosts Serbia’s energy capacity but also signals to investors in the renewable energy sector that a new phase of stability and sustainable energy development is underway.

Investors

looking for opportunities in the renewable energy sector will now find a secure environment in Serbia, backed by strong American support, while Bosnia and Herzegovina continues to offer interesting prospects but lacks the direct bilateral backing Serbia currently enjoys. Following these positive comparative examples, this agreement could serve as a model for Bosnian diplomacy to establish similar bilateral relations with countries interested in investing, potentially increasing trust and investments in Bosnia’s renewable energy market.

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For more information about the signed agreement, read at the following link: Потписан Споразум о стратешкој сарадњи у области енергетике између Србије и САД