The European Bank for Reconstruction and Development approved an EUR 80 million loan to help the Serbian state run power company upgrade its coal mines that fuel the country’s biggest thermal plants.

The loan, together with an expected EUR 74 million from Germany’s development bank KfW, will help Elektroprivreda Srbije, or EPS buy new equipment for the open pits of its Kolubara mining basin south of Belgrade.

The London based bank said that the new machinery will improve the quality of the lignite it relies upon while reducing fuel wastage and cutting costs. The improvements will lead to savings of around 250,000 tonnes of coal in electricity generation, which will reduce carbon emissions of more than 200,000 tonnes.

The EPS relies on the Kolubara coal to supply four thermal plants, with combined capacity of more than 3,000 megawatts.

Residents of the Vreoci village near the mines recently demanded that the loan be halted until the EPS revises its plan to resettle them to expand the open pits. They want the power company to resettle them all together instead of moving some 850 families individually.

(Sourced from Bloomberg)