Immigration from war-afflicted areas, issues with the national energy company, and contentious lithium extraction operations are keeping people talking in Serbia, according to Andrejic & Partners Managing Partner Aleksandar Andrejic.
“In Serbia, like in most of Europe, the geopolitical situation is the biggest driver of activity and change recently,” Andrejic begins. “The country imposed no sanctions on Russia, so a wealth of Russian citizens and companies are looking at Serbia as an opportunity to move and reestablish their work and life here. Consequently, there are a lot of Russians and Ukrainians here that have slowly been migrating and becoming a part of the market,” he says.
Moreover, speaking about significant market occurrences, Andrejic reports of turmoil within the Serbian national energy company: “recently, there have been several adverse events in the energy market which were caused by the incompetence of the management of the Serbian national energy company.” This led to Serbia being forced to buy a lot of electricity – “given the current market prices, the government started pondering an internal reorganization of the national energy company and perhaps bringing in a professional governance board so as to avoid similar situations going forward,” he explains. Andrejic adds that the Serbian national energy company has been fraught with issues last year as well, with “disruptions across multiple production chains which subsequently affected the entire energy network.”
Furthermore, turning to legislative updates, Andrejic reports that, starting from January 2023, “all private companies will be required to issue electronic invoices. Up to this point, companies were allowed to issue simple paper invoices, but the 2021 Act on Electronic Invoices comes into effect after the New Year – meaning that all businesses will have to switch and adapt.” According to him, this will impact “everybody doing business in Serbia – we will see how smoothly this transition goes.”
Finally, Andrejic highlights some political clashes in the country. “There has been a lot of debate around the mining of lithium in the country,” he says. “Serbia has rich deposits of lithium which were recently discovered, and foreign company Rio Tinto was slotted to commence with its extraction and processing. This was heavily protested by environmental groups this spring, just prior to the April general election, and it appeared that they had succeeded in preventing the start of mining,” Andrejic reports.
However, “a few weeks ago, the newly formed government began to backtrack on their pre-election stance of being against the mining operation,” according to Andrejic. “This led to heavy clashing, with environmental organizations opposing it still, and certain politicians advocating that mining would only make sense if it were followed with a battery plant investment as well,” he explains. “It remains to be seen how this all pans out.”