The Serbian Government has ratified an agreement with Azerbaijan to establish a combined cycle gas-fired power plant (CHPP) in Niš, signifying a significant step in energy collaboration between the two nations. This agreement, formalized in Belgrade on February 15, 2026, is designed to enhance bilateral energy ties and ensure a reliable supply of natural gas from Azerbaijan while also facilitating SOCAR’s entry into segments of the Serbian electricity market.
The framework of this agreement spans two years, with provisions for automatic renewal, underscoring the long-term commitment of both countries to this project. Joint financing will support the initial development phase, which encompasses essential preparatory work such as spatial planning, feasibility studies, environmental assessments, and construction design. Following these preliminary steps, a dedicated project company will be formed to manage the plant’s development and operations.
A joint working group will be established under the agreement to expedite project implementation and investigate potential investment incentives along with regulatory measures that could facilitate the project’s progression. A critical aspect of this partnership is ensuring a consistent supply of Azerbaijani gas, which is anticipated to underpin the facility’s electricity generation capabilities.
Serbian officials have clarified that this initiative will not necessitate additional state budget allocations. The proposed site for the plant is located north of the village of Krušca, near Niš; however, final site selection will depend on a comprehensive urban development plan that is yet to be finalized.
The timeline for the project includes plans to finalize a construction contract in Azerbaijan by April, with an ambitious target set for plant completion by 2029. This development not only reflects Serbia’s strategic energy objectives but also highlights Azerbaijan’s role as a key partner in regional energy security.
