Serbia’s economic relationship with Ukraine is acquiring a stronger energy dimension, with electricity exports becoming a significant part of bilateral trade alongside defence-industry links and reconstruction cooperation. During the first six months of 2026, Serbia exported approximately $57.8 million of electricity to Ukraine, accounting for about 31% of Serbian goods exports to the country. Electricity had not ranked among Serbia’s five largest export categories to Ukraine in 2025, making its rapid emergence a notable change in the structure of bilateral commerce.
- Energy cooperation enters bilateral talks
- CBAM changes Serbia’s electricity export market
- Energy provides a different channel from defence trade
- Reconstruction opens a broader commercial market
- Serbia’s energy policy shapes the relationship
- Serbia’s export capacity remains dependent on domestic generation
- Electricity becomes a measurable trade link
The development coincided with Ukrainian President Volodymyr Zelenskyy’s visit to Belgrade on August 7, when he was received at Nikola Tesla Airport by Serbia’s minister of mining and energy. The choice of Serbia’s energy minister did not establish that energy was the reason for the reception. No Serbian official publicly linked the protocol decision to electricity trade. Energy, however, featured in discussions between Zelenskyy and Serbian officials, alongside infrastructure, reconstruction, trade and European integration.
Energy cooperation enters bilateral talks
Serbia and Ukraine discussed the damage to Ukraine’s thermal power generation infrastructure and preparations for another difficult winter. Belgrade committed €2 million to support Ukraine’s energy sector, in addition to earlier assistance involving high-voltage transformers and mobile generators intended to help restore damaged power infrastructure. The wider commercial relationship has also expanded. Serbian government data put bilateral goods trade at approximately $321 million in the first half of 2026, compared with about $450 million during 2025. Serbian exports have been increasing faster than imports, with electricity, fertilisers and tyres among the leading export categories.
Negotiations on a bilateral free-trade agreement have also been revived after years of limited progress, potentially providing a broader institutional framework for trade between the two countries. Ukraine’s electricity requirements are closely connected to continuing damage to its generation, transmission and distribution networks caused by Russian attacks. Electricity imports have consequently become part of Ukraine’s energy-security system rather than simply a conventional commercial commodity flow. Ukraine is connected to continental Europe’s synchronous electricity network and can obtain power through neighbouring markets when domestic generation is insufficient.
CBAM changes Serbia’s electricity export market
Serbia has meanwhile acquired stronger incentives to seek electricity customers outside the European Union. The definitive phase of the EU Carbon Border Adjustment Mechanism (CBAM) entered into force on January 1, 2026. Serbia continues to rely substantially on lignite-fired generation, making the carbon adjustment an important factor in the economics of electricity exports to EU markets.
The Energy Community Secretariat has identified changing regional electricity flows. During the second quarter, electricity increasingly moved north through Serbia towards the Hungarian border, while Ukraine emerged as a potentially important destination for surplus Western Balkan electricity. Commercial flows from Serbia towards Hungary increased sharply compared with the corresponding period of the previous year. Because electricity travels through an interconnected regional network, individual Serbian megawatt-hours cannot necessarily be physically assigned to a Ukrainian consumer. The trading patterns nevertheless indicate the growing influence of Ukrainian demand on south-east European electricity markets.
Serbian electricity exports to Ukraine had already reached $32.2 million in the first quarter of 2026, representing 34% of exports to Ukraine at that stage. By the end of June, the value had climbed to $57.8 million. The commercial conditions are straightforward: Ukraine requires imported electricity, Serbia periodically has electricity available for export, carbon costs have complicated some EU destinations and regional interconnections provide routes into electricity-deficit markets.
Energy provides a different channel from defence trade
The growing power relationship also occupies a different political space from Serbia’s defence-industry links with Ukraine. Belgrade continues to reject sanctions against Russia, maintains political and economic ties with Moscow and remains dependent on Russian gas. At the same time, Serbia formally supports Ukraine’s territorial integrity and has expanded practical cooperation with Kyiv.
Electricity exports provide a commercially based mechanism for cooperation. Power sales generate revenue for Serbia while supporting Ukraine’s civilian energy system. Transformers, generators and other equipment can similarly be supplied as infrastructure and humanitarian assistance without requiring Belgrade to declare a military alignment with Kyiv. Ammunition remains considerably more politically sensitive. Serbia possesses one of the Balkans’ significant defence industries, including production capacity for Soviet-standard ammunition used by Ukrainian forces. Serbian-made ammunition has reached Ukraine through third countries, although Belgrade maintains that it does not directly supply either side of the war.
An earlier Financial Times estimate valued Serbian ammunition ultimately reaching Ukraine through intermediaries at approximately €800 million during the early years of the full-scale war. Serbian President Aleksandar Vučić indicated that the estimate was broadly plausible. Russia has repeatedly criticised Serbia over ammunition reaching Ukraine through countries including the Czech Republic and Bulgaria. Belgrade tightened export controls following Russian pressure while continuing to argue that Serbian defence companies need access to international markets and that Serbia cannot fully control how foreign buyers subsequently use legally exported ammunition.
During Zelenskyy’s visit, Vučić publicly stated that military cooperation was not discussed in the official talks. The Warsaw-based Centre for Eastern Studies has nevertheless assessed that maintaining access to Serbian ammunition, particularly scarce 122mm and 152mm Soviet-standard artillery rounds, was likely among Kyiv’s important underlying interests in the visit. That assessment does not constitute a disclosed agreement between the two governments.
Reconstruction opens a broader commercial market
Electricity is potentially more expandable as a formal economic relationship because cooperation can continue beyond the current war. Serbia and Ukraine are discussing infrastructure and reconstruction projects, with Belgrade expressing willingness to participate in rebuilding one of the Ukrainian cities severely affected by the conflict. A future free-trade agreement could also improve opportunities for Serbian engineering companies, construction groups, electrical-equipment manufacturers, agricultural suppliers and logistics operators.
Ukraine’s reconstruction requirements extend beyond power plants. They include substations, transformers, transmission networks, railway electricity systems, district heating and municipal infrastructure, creating potential demand for a wide range of industrial and engineering capabilities. Energy cooperation could also eventually extend beyond electricity. Ukraine has substantial underground gas-storage infrastructure near its western borders, while Serbia is seeking to diversify an energy system that remains heavily connected to Russia. Belgrade is expanding gas interconnections towards Bulgaria, Romania and North Macedonia while positioning Serbia within emerging north-south energy corridors across south-east Europe. No Serbian-Ukrainian gas-storage agreement was announced during Zelenskyy’s visit, so this remains a prospective area of cooperation rather than an established arrangement.
Serbia’s energy policy shapes the relationship
The role of Serbia’s minister of mining and energy in Zelenskyy’s arrival reflects the breadth of Serbia’s energy relationships. Her ministry is involved in Serbia’s energy relationship with Russia, issues surrounding the Russian-linked oil company NIS, closer energy cooperation with the United States, infrastructure relationships with the EU and major energy projects involving European, Chinese and other international partners.
Before entering government, Đedović Handanović headed the European Investment Bank’s regional representation for the Western Balkans. Serbia’s electricity market is simultaneously entering a period of more complicated cross-border conditions. The Energy Community has estimated substantial implicit CBAM costs for Serbian electricity entering the EU under default carbon-intensity assumptions.
This increases the commercial importance of alternative export destinations, particularly during periods when Serbia has surplus generation from hydroelectric facilities, coal-fired plants and expanding renewable capacity. Ukraine represents a significant potential market because damage to its domestic power system has increased the need for imports. The requirement is unlikely to end immediately after the conflict, as rebuilding generating facilities, replacing transformers, strengthening interconnections and decentralising power generation will require substantial investment.
Serbia’s export capacity remains dependent on domestic generation
The potential for electricity exports remains constrained by Serbia’s own power system. EPS cannot maintain exports regardless of domestic operating conditions. Serbian electricity availability remains sensitive to hydrology, coal production, power-plant availability and domestic consumption. Poor hydrological conditions or outages at major thermal facilities can rapidly shift Serbia from an exporting position to an importing one. Electricity exports to Ukraine therefore represent an emerging commercial corridor rather than a guaranteed long-term baseload supply arrangement.
The political implications remain significant. For Kyiv, Serbia offers electricity, ammunition through international channels, commercial goods, energy equipment, humanitarian assistance and potential reconstruction capacity while retaining close ties with Moscow. For Belgrade, cooperation with Ukraine provides a way to demonstrate practical engagement with Western priorities without joining sanctions against Russia. Ukraine’s position on Kosovo also allows Serbia to maintain a bilateral relationship with Kyiv while continuing its broader balancing policy. The result is a relationship in which different forms of economic cooperation occupy different levels of political sensitivity.
Electricity becomes a measurable trade link
The shift is already visible in Serbia’s trade statistics. Electricity generated $57.8 million in Serbian exports to Ukraine during the first six months of 2026, equivalent to roughly 31% of total Serbian goods exports to the country. Serbia also committed €2 million in additional energy assistance, after earlier deliveries of high-voltage transformers and mobile generators. At the same time, bilateral goods trade stood at approximately $321 million during the first half of the year, compared with roughly $450 million in 2025, while negotiations on a free-trade agreement have been revived.
The developing relationship consequently extends across electricity trading, energy equipment, infrastructure, reconstruction, manufacturing and defence-industry links. The visible part of that relationship is increasingly energy-related, while the military dimension remains more politically sensitive. Serbia’s electricity exports to Ukraine, energy-equipment assistance, reconstruction discussions and the changing regional power market have therefore added a substantial commercial component to bilateral relations that previously received greater attention primarily because of ammunition and Serbia’s position between Kyiv, Moscow and Western governments.
