Czech Republic power provider CEZ has signed an agreement to invest up to E1.5 billion in a new Republic of Serbia (Bosnia and Herzegovina) coal power plant and to develop its adjacent coal mine.

The CEZ Power company and the power company of the Republic of Serbia, ERS, signed the founding deeds of a new joint venture, ‘Nove Elektrarne RS,’ through which the investment will be implemented.

The new power facility, to be located in the Gacko area of the Serb Republic, will produce an output of 600MW to 700MW.

The registered capital of the newly founded company will be CM800 000, and CEZ’s share in the enterprise will be 51%, while the rest will belong to ERS.

The deal fits in with CEZ’s current expansion strategy, which has seen the Czech firm recently purchase three distribution companies and a power plant in Varna in Bulgaria, acquire a majority stake in the Electrica Oltenia distribution company in Romania and purchase two Polish power plants, Elcho and Skawina.