Reuters reported that Serbia and China signed a USD 345 million deals on Wednesday to upgrade the Balkan country second largest coal fired power plant and extend its life span for another 10 years.

As per report, the agreement between officials of the Kostolac thermal plant and China National Machinery and Equipment Import and Export Corporation is part of a USD 1.25 billion upgrade project that will also help boost output at the 700 megawatt facility and make it more environmentally friendly.

Mr Petar Skundric Serbia energy minister said "This is a project of extreme importance for our economy. He said that his government planned greater cooperation with Chinese energy companies but gave no details.”

Mr Dragan Jovanovic the plant general manager said "In this first initial phase we will build a desulphurization system as well as the necessary infrastructure for that. He said that at the end of the whole project the life span will be extended, and we will be able to work at full capacity, using all 700 megawatts."

Due to outdated technology, the plant's two blocks of 350 megawatts each operate at below full capacity.

(Sourced from Reuters)