Elektroprivreda Srbije (EPS), Serbia’s largest and most strategically important state-owned enterprise, stands at the centre of a profound structural crisis. The country’s accelerating energy needs, its obligations in the European decarbonisation agenda, and the ageing of its coal-dominated generation fleet all demand unprecedented speed and coordination in planning and constructing new power-generation facilities. Yet Serbia finds itself in a paradox: precisely at the moment when the energy transition demands agility, discipline and long-term vision, EPS is instead exhibiting delays, stalled investments, under-execution and declining performance indicators.
In the midst of this challenge is a new corporate governance architecture. EPS was recently transformed from a traditional public enterprise into a joint-stock company, complete with a Supervisory Board, a Shareholders’ Assembly, and a defined executive management structure. In theory, this shift should have introduced higher accountability, clearer responsibilities and stronger oversight. In practice, it exposed the weaknesses of Serbian state-owned governance: political influence, diffuse responsibility, insufficient supervisory authority and a lack of operational autonomy within the company. The new Supervisory Board, appointed with the promise of professional oversight and international expertise, now finds itself under pressure to deliver what EPS has historically struggled with—timely project execution, disciplined development planning and meaningful decarbonisation.
The failure to deliver new power-generation facilities is not merely a technical or engineering issue. It is an organisational, managerial and political challenge. Serbia’s energy transition depends on the coordinated performance of all governance bodies within EPS: the Supervisory Board that must monitor and challenge, the Assembly that must set expectations and enforce accountability, the executive management that must execute projects, and the Ministry of Energy which, although positioned above the company, must not impede operational efficiency. Instead of clarity and shared responsibility, EPS has drifted into overlapping oversight, diluted accountability and a slow reaction to urgent needs.
The reasons behind EPS’s persistent delays are complex. Many are embedded in legacy infrastructure, financial pressures and technological limitations. But increasingly, observers point to a deeper root cause: the lack of clear, enforced responsibility at the top of the organisation. The Supervisory Board, the Assembly and the Ministry each operate with a mandate over EPS, yet none appears to fully assume ownership over the company’s performance shortfalls. As a result, responsibility is shared so widely that, in practical terms, it is carried by no one.
One of the most troubling indicators of systemic failure is the continuous postponement of new power-generation projects. Serbia urgently requires new energy capacity—not simply to replace ageing thermal plants but to support consumption growth, secure independence from volatile imports and begin decarbonising its production. Yet large strategic projects remain stuck in slow development cycles: solar and wind initiatives progress far slower than planned, hydro upgrades move cautiously, and thermal modernisation continues to absorb resources without meaningful expansion of capacity. Each year, the gap between the country’s needs and EPS’s output grows, and the responsibility for these widening gaps lies squarely within EPS’s governance hierarchy.
The executive management is the first layer of accountability. It is responsible for designing investment plans, executing them, ensuring procurement efficiency, managing engineering teams, coordinating with regulators and delivering projects on schedule. In EPS’s case, management has struggled to achieve these core tasks at the pace required. New investments are hampered by slow preparation, lengthy feasibility processes, inconsistent prioritisation and limited internal capacity for project management. Instead of building new assets, EPS often redirects staff and budget to resolving operational crises—breakdowns at old plants, maintenance backlogs and mine productivity issues. Each unexpected outage or mine collapse derails planning cycles, pushing new projects further into the future.
But executive shortcomings cannot be isolated from the Supervisory Board’s oversight. A supervisory body exists precisely to prevent underperformance from becoming systemic. Its task is to scrutinise management, question timelines, demand progress reports, evaluate risks, and escalate concerns. Yet since its appointment, the Supervisory Board has operated with limited visibility and minimal public indication that it has pressured management to accelerate delayed projects. In moments of production decline, revenue loss or missed strategic milestones, the Board has offered little public commentary and no clear corrective actions. Its silence has raised legitimate questions about whether it can function independently in a politically sensitive state-owned company or whether it is constrained by appointments, expectations or political pressures.
The Assembly, representing the shareholder—the Serbian state—is the institution that appoints the Supervisory Board, approves major investments and sets the strategic direction. In most well-functioning joint-stock companies, a failure to deliver core investment projects and prolonged underperformance would trigger decisive governance action: restructuring of management, accountability reviews, strengthened oversight or changes within the Board. In EPS, however, such interventions have been largely absent. The Assembly has not visibly enforced consequences for delays, nor has it demanded faster execution or structural changes. As a result, the governance chain weakens. If executive management fails and the Supervisory Board does not intervene, and if the Assembly does not enforce discipline over the Board, accountability collapses.
Above this internal hierarchy sits the Ministry of Mining and Energy, which exerts substantial influence over EPS’s strategic and operational environment. Although the Ministry is not formally part of EPS’s corporate governance, it acts as the state’s policy-maker, strategic owner and regulatory authority. This triple role creates ambiguity. On one hand, the Ministry sets the national energy strategy, issues laws, oversees the regulatory framework and defines the transition agenda. On the other hand, it indirectly influences appointments, supervises strategic decisions and often becomes involved in operational issues that would typically belong to company management.
This overlapping influence creates an “overhead” effect: EPS’s internal decision-making slows, major investment approvals require multiple layers of consultation, and management hesitates to take decisive actions without political signals. The Ministry’s involvement, while necessary at the strategic level, becomes counterproductive when it restricts operational autonomy. If large-scale renewable projects or thermal reconstructions require Ministry approval or alignment with ongoing political considerations, the pace of corporate execution suffers. It becomes unclear whether delays originate from the company or from the political oversight structure that surrounds it.
EPS’s decarbonisation trajectory illustrates this dysfunction clearly. Publicly, the company has committed to reducing emissions, closing obsolete coal units, and expanding renewable energy production. But in reality, the transition has been sluggish. Coal remains dominant in the generation mix, emission reductions are gradual, and renewable capacity growth is incremental rather than transformative. The slow pace of permitting, project planning, financing decisions and regulatory alignment reflects not only internal limitations but also a lack of strong, consistent strategic direction. Without clear mandates, decarbonisation becomes a vague, long-term aspiration rather than an enforceable operational requirement.
Behind these structural issues lies a broader cultural problem: EPS has spent decades functioning as a stabilising arm of the state rather than a nimble, commercially driven utility. Its priorities have been shaped by political considerations, social sensitivities around coal regions, and the traditional role of the energy sector as a tool of national policy. The new institutional structure, with its Supervisory Board and JSC status, has not yet translated into a true shift in managerial culture. Incentives remain unclear, accountability is diffuse, and the pressure to deliver tangible results is inconsistent.
Serbia’s growing electricity consumption and the gradual decline of legacy capacity mean that delays in new facility construction have real economic consequences. Each year of inaction increases reliance on imports, elevates financial risk and exposes the country to price volatility. Furthermore, Serbia’s path toward EU integration hinges on credible progress in decarbonisation. The longer EPS postpones renewable projects, the greater the future cost of catching up becomes. Without strong governance intervention, the country risks entering a period where energy insecurity meets regulatory non-compliance, undermining its development trajectory.
The deeper question is how responsibility should be apportioned going forward. EPS requires a new model of governance accountability that does not allow failures to be absorbed into the system without consequence. The Supervisory Board must be empowered, expected and obligated to demand results from management. It should have full autonomy to assess risks, enforce KPIs, commission independent audits, and recommend leadership changes if targets are not met. The Assembly must treat EPS with the seriousness of a corporate asset whose underperformance carries national consequences. It must evaluate board effectiveness and intervene decisively when oversight is weak. And the Ministry must shift from micro-management to strategic coordination, offering policy clarity while allowing the company operational independence.
Equally important, EPS needs internal reforms that strengthen its capacity for planning and project execution. This includes professionalised project management offices, modern risk assessment frameworks, transparent tendering practices, and a corporate culture that prioritises performance over compliance. Many of EPS’s delays stem not from lack of resources but from lack of internal coordination and the absence of a disciplined investment pipeline. New plants cannot be built on outdated organisational models.
Ultimately, Serbia’s energy transition is a test of governance as much as technology. EPS stands at the intersection of state policy, corporate responsibility and national interest. If its governance bodies—Supervisory Board, Assembly and executive management—function cohesively, Serbia can bridge its capacity gaps, accelerate renewable development and navigate the complexities of transition. If they continue to operate in silos, with blurred roles and minimal accountability, delays will deepen and the country’s energy future will remain uncertain.
EPS today is not in crisis because of a single failure but because of a system that allows underperformance to persist without consequence. The new governance structure was intended to correct this, but without firm enforcement and operational autonomy, it risks becoming another administrative layer rather than a catalyst for change. Serbia’s energy future depends on breaking this cycle. The country cannot afford slow governance in a fast-moving energy landscape.
For EPS to deliver the new generation facilities Serbia urgently needs, responsibility must no longer be a shared abstraction—it must be a concrete, actionable mandate. Only then can the company transform from an institution trapped by its legacy into a driver of Serbia’s energy transition.
