Serbia moves to ratify Azerbaijan deal for Niš combined-cycle gas plant

Serbia has taken a legislative step to formalize its next phase of energy cooperation with Azerbaijan, approving measures needed to ratify an agreement tied to a new combined cycle gas-fired power plant near Niš. For investors and market participants, the decision matters because it links long-term electricity development plans with expectations around Azerbaijani natural gas supply and access for SOCAR within parts of Serbia’s power market.

The agreement was signed in Belgrade on 15 February 2026. It establishes a two-year framework that can be automatically renewed, aiming both to deepen bilateral energy relations and to secure long-term gas deliveries from Azerbaijan while enabling SOCAR participation in selected segments of Serbia’s electricity market.

Joint early-stage work before a dedicated project company

Under the terms described by Serbian authorities, the two governments will jointly finance the initial development phase. That work is expected to include preparation of core project documentation—such as a spatial plan, feasibility study, environmental impact assessment, and construction design.

Once those steps are completed, the arrangement calls for setting up a dedicated project company responsible for developing, operating, and managing the plant.

No extra state budget funding emphasized

A central point highlighted by Serbian officials is that the project will not require additional financing from the state budget. Planning documents indicate the facility is expected to be located north of the village of Krušca near Niš; however, they also note that the final site will be determined through a detailed urban development plan.

The partnership places stable Azerbaijani gas supply at its core, describing it as the foundation for reliable electricity generation at the future facility.

Construction contract planned in Azerbaijan; target completion in 2029

The proposed timetable envisages signing a construction contract in Azerbaijan in April. Completion of the plant is targeted for 2029, aligning Serbia’s legislative action with an accelerated path from planning documentation toward execution.

The ratification process centers on an agreement linked to cycle gas-fired power plant (CHPP)—a structure intended to support both generation reliability and broader commercial participation as SOCAR gains openings within Serbia’s electricity market.