For more than a decade, Serbia’s power sector has been defined by stagnation, delayed modernisation, and the slow unraveling of a once-dominant state monopoly. Elektroprivreda Srbije (EPS), the country’s vertically integrated electric-power utility, remains one of the largest state-owned enterprises in Southeast Europe—responsible for the country’s generation, distribution, mining and critical infrastructure stability. But it is also a system under strain. Aging assets, outdated technology, inefficiencies, coal dependence, and a rising need for decarbonisation have pushed the sector to a structural crossroads.
Into this landscape enters a foreign actor often overlooked in Serbia’s domestic debates, but increasingly present inside the operational heart of the system: Hungary’s MOL Group. What initially seemed like a distant neighbour’s commercial expansion into fuel retailing has quietly transformed into one of the most strategic and far-reaching corporate penetrations of Serbia’s energy infrastructure in recent history. MOL’s recent acquisition of two of Serbia’s largest private companies working directly on TSO, DSO and power-generation projects marks a decisive shift. It is no longer a peripheral outsider. It is now inside the grid—inside the substations, inside the hydropower plants, inside the maintenance cycles, inside the overhaul programmes, and inside the future of EPS.
The key question—one that ministry officials rarely address publicly but increasingly acknowledge behind closed doors—is whether MOL is positioning itself as the front-runner for Serbia’s eventual energy-sector restructuring, including the long-speculated partial sale, joint venture, or external partnership involving EPS. And if so, is Serbia witnessing the beginning of a quiet, strategically choreographed takeover, not through ideology or political pressure, but through corporate penetration of the system’s technical and operational core?
To answer this, we must understand the logic guiding MOL’s moves, the weaknesses shaping Serbia’s energy landscape, and the way structural reforms in EPS align with the ambitions of a regional energy giant looking to secure influence across the Balkans.
I. Serbia’s energy sector at a turning point
Serbia’s energy system is simultaneously large, strategic, politically sensitive and structurally fragile. EPS remains the backbone of national energy security, operating lignite mines that fuel coal power plants, managing hydroelectric assets that stabilize the grid, and maintaining a vast distribution infrastructure. Despite its scale, EPS is deeply strained: lignite fields require mechanisation and environmental rehabilitation; power-plant overhauls lag behind global standards; hydropower plants need turbine, generator and transformer upgrades; and the distribution grid faces chronic underinvestment.
The lingering effects of the 2021–2022 energy crisis hit EPS hard. A combination of operational failures, weather volatility, supply-chain shortages and market shocks forced the government to intervene financially, pushing EPS into a prolonged restructuring process. The company’s management was replaced. Corporate governance reforms began. A quiet transition toward a joint-stock model accelerated. EPS’s transformation programme, backed by international institutions, suggested a gradual reduction of political interference, increased transparency, and potential future alignment with EU energy market rules.
Inside this reform context lies the fundamental tension: Serbia wants to maintain state control of EPS, but also needs capital for modernisation. It needs foreign expertise but fears losing sovereignty. It wants to decarbonise, but cannot finance the transition alone. The government publicly denies any plan to privatise EPS. Yet internally, most officials understand that without external capital, expertise and operational support, EPS cannot deliver the investments required for energy security, EU alignment and long-term competitiveness.
This is the structural vacuum that creates opportunity for a strategic actor like MOL.
II. MOL’s regional strategy: Beyond fuels, toward energy infrastructure control
MOL is not merely a fuel retailer or petrochemicals company. It has evolved into a diversified energy conglomerate with capabilities across oil, gas, renewables, petrochemicals, logistics, engineering services, power-plant maintenance and infrastructure development. In Central Europe, MOL has already proven that it can integrate upstream assets, midstream pipelines, downstream refineries, energy trading platforms and engineering-services subsidiaries into a coherent regional strategy.
The company’s long-term strategy is no secret: MOL aims to become Central and Southeastern Europe’s integrated energy and industrial services leader, expanding influence not only through asset ownership but through control of operational services—specifically in construction, maintenance, overhaul and engineering. Where many oil companies are retreating from heavy industrial operations, MOL is doubling down.
This makes Serbia a high-value target. It is the largest non-EU energy system in the region, possesses significant hydroelectric potential, and sits at a crossroads of regional transmission lines. Serbian energy companies control assets that are strategically indispensable for balancing regional grids, connecting Central Europe with the Balkans, and enabling cross-border electricity trade. For MOL, Serbia is not just another market. It is the structural anchor of a future regional energy network.
MOL’s acquisition of two major Serbian engineering and power-infrastructure companies wasn’t opportunistic—it was strategic. These companies were not purchased for their balance sheets; they were purchased for their contracts, their institutional access, their technical teams, and their embedded presence inside Serbia’s state energy companies.
Once you control the contractors who maintain the substations, overhaul the turbines, erect the transmission towers and repair the hydropower plants, you no longer stand outside the system. You stand inside it.
III. Entering through the side door: Control of engineering and maintenance companies
The two private Serbian companies acquired by MOL operate in the most sensitive and strategically significant areas of Serbia’s electricity sector. They participate directly in:
- EMS (Serbian Transmission System Operator) projects
- Elektrodistribucija Srbije (DSO) infrastructure, maintenance and network upgrades
- EPS thermal and hydro-generation overhauls
- rehabilitation of turbines, generators, transformers and high-voltage assets
- construction of 110/220/400 kV lines and substations
- emergency works following outages, storms and accidents
- modernization projects financed by IPA, IFIs or state budgets
These operations are not peripheral. They are the skeleton, the muscle and the nervous system of Serbia’s energy sector.
By acquiring these companies, MOL now gains what no foreign actor previously had in Serbia:
1. Operational visibility inside the grid.
It sees the condition of substations, the maintenance backlog, the bottlenecks, the CAPEX cycles, and the critical vulnerabilities.
2. Strategic influence over procurement and planning.
Contractors help shape scope definitions, timelines, methodologies and technical specifications—all essential for future tenders and partnerships.
3. Institutional proximity.
Regular interaction with EMS and EPS engineering teams, local branches, regional HQs and project managers creates familiarity, trust and influence.
4. Technical integration.
By controlling the people who physically touch the assets—engineers, technicians, supervisors—MOL becomes embedded inside the day-to-day functioning of the system.
This is a classic pattern in strategic corporate entry: do not attack the fortress; infiltrate the maintenance crews, the operators, the repair teams. Gain power through relevance, not confrontation.
IV. The hydropower question: MOL’s signalled interest in EPS HPPs
Hydropower is Serbia’s most valuable strategic asset. EPS operates multiple hydropower cascades, including Đerdap, Bajina Bašta, Zvornik, Uvac, Kokin Brod and Vlasina. These plants provide flexibility, load balancing, peak generation, system stability and essential ancillary services. They are the backbone of Serbian grid resilience.
So when MOL publicly signaled its interest in acquiring EPS’s hydropower plants, it was not a careless remark—it was an intentional strategic message. Hydropower is the crown jewel. Companies do not casually express interest in crown jewels unless they have inside knowledge of system weaknesses, financial gaps, governance dynamics or long-term political trajectories.
MOL understands that hydropower rehabilitation, turbine modernization, digitalization of control systems, and dam safety investments require billions of euros. Serbia cannot finance all of this alone. This combination—high value, high cost, high complexity—creates the perfect environment for a strategic partner to step in.
By expressing interest early, MOL positioned itself as a potential future buyer, co-investor or joint-venture partner long before the Serbian public realises that EPS’s hydropower assets may need external support.
V. EPS’s internal transformation: A window of opportunity
EPS is in the middle of the most profound transformation in its history. The company is shifting from a politically driven public enterprise to a more corporatised, financially accountable joint-stock structure. This transition is part of a wider strategy to:
- comply with EU energy-market rules
- improve governance
- reduce political interference
- increase transparency
- create conditions for capital injection
While officials publicly deny any plans for privatisation, political messaging is less important than structural reality. EPS’s investment needs over the next decade exceed several billion euros. Hydropower rehabilitation alone requires billions. Decarbonisation, renewable expansion, new baseload, battery storage, and distribution upgrades all demand capital Serbia does not currently possess.
This makes a strategic partnership—whether through IPA funds, commercial investment, or partial equity—almost inevitable.
MOL sees the trajectory. Its moves anticipate this future.
VI. Is MOL positioning itself for an EPS transaction? The evidence points toward yes
Let us look at the pattern objectively.
A foreign energy company enters a market known for state control. It begins by expanding fuel operations. Then it acquires companies that dominate the engineering and maintenance work for the national TSO, DSO and EPS itself. It embeds itself into the deepest operational layers of the system. It builds relationships with management. It gains technical insight into asset conditions. It obtains early visibility on investment cycles. And it publicly signals interest in the most valuable assets of the state utility.
This is not random. It is a structured, carefully paced strategy.
MOL is not overtaking Serbia’s energy sector through political confrontation or aggressive acquisition. It is doing so through operational entanglement, which is far harder to block and far more sustainable long-term.
By the time Serbia reaches the inevitable point where EPS needs a partner with capital, expertise and credibility, MOL will already be:
- the most integrated foreign actor,
- the most knowledgeable about system operations,
- the most familiar with EPS and EMS workflows,
- the most effective at local project delivery,
- the most politically acceptable to both Belgrade and Brussels.
It will have the credibility, the operational record, and the institutional familiarity that other foreign bidders lack.
This does not guarantee MOL the future partnership. But it gives MOL a structural advantage that is extraordinarily difficult for competitors to match.
VII. The regional context: Hungary–Serbia energy cooperation and EU alignment
The political alignment between Hungary and Serbia further strengthens MOL’s position. The two governments maintain stable, cooperative relations across economic, security, and energy domains. Hungary has supported Serbia’s EU ambitions while also advocating for regional energy integration.
At the EU level, MOL is far more acceptable as a strategic partner for EPS than Russian or Chinese companies. The European Commission, already wary of geopolitical risks in infrastructure ownership, is more likely to support Western Balkan energy partnerships involving EU-based companies than those involving actors from the East.
This geopolitical alignment has two consequences:
First, Serbia sees MOL as a safe partner—politically friendly, geographically close, and institutionally stable.
Second, Brussels sees MOL as a legitimate actor for regional energy-market integration aligned with the Green Agenda.
Together, these dynamics create a political corridor for MOL’s expansion.
VIII. What this means for Serbia: Strategic opportunity or gradual dependence?
The key question is whether MOL’s rising influence represents a strategic opportunity for Serbia or a silent erosion of state control.
The answer is paradoxically: both.
On one hand, MOL brings expertise, capital, and reliability. Serbia needs these to modernise generation assets, expand renewables, upgrade the grid and stabilise EPS’s finances. A strong regional partner can accelerate Serbia’s transition, reduce system risk and improve technological capacity.
On the other hand, operational entanglement gives MOL structural power. If MOL becomes indispensable to Serbia’s TSO, DSO and EPS operations, the state may lose bargaining power in future negotiations. MOL may shape investment priorities, influence tender specifications, and gradually secure privileged access to the most profitable segments of the power sector.
A strategic partnership with MOL could modernise Serbia’s energy system.
But without strong regulatory oversight, it could also weaken Serbia’s leverage.
IX. Conclusion: A slow, strategic advance toward the centre of Serbia’s power sector
Is MOL slowly overtaking the Serbian state energy sector?
Factually, no foreign company “overtakes” a sector protected by politics, national identity, and public sensitivity.
But operationally—yes, MOL is embedding itself deeper and more strategically into Serbia’s power system than any other foreign actor. This is not takeover by force or law. This is takeover by proximity, competence and relevance.
MOL’s path is clear:
- control the contractors who control the assets,
- embed into EPS and EMS workflows,
- position as the natural partner when EPS requires outside capital,
- align with both Serbian and EU political interests,
- and become the indispensable foreign actor when the future of EPS is negotiated.
If Serbia eventually moves toward a partial EPS privatisation, joint venture or IPA-backed strategic partnership, MOL will enter the process not as an outsider, but as the company already inside the grid—already familiar, already operational, already trusted, and already indispensable.
In corporate geopolitics, that is the strongest negotiating position one can have.
Elevated by www.virtu.energy
