The cornerstone for the first solar power plant in Serbia, which will be 5 MW strong and cost EUR 15 million, was laid on the Zlatibor mountain, western Serbia, on Monday.

The ceremony was attended by heads of the companies Dunav Osiguranje and Elektroprivreda Srbije (EPS), Milenka Jezdimirovic and Dragomir Markovic, and President of the Cajetina municipality Milan Stamatovic.

The plant will be located 6 km from the centre of the town of Zlatibor.

The two companies will build the plant together. The first stage of the construction, which will give the plant an output of 1 MW, is expected to be completed in spring 2012, with the rest of the project getting finished over the next few years.

Markovic said renewable energy sources were a top priority for EPS, which is the national power supplier.

EPS has to change its production, which is currently based on coal, and an opportunity for that lies in water power and renewable sources, Markovic noted.

"This is one of the first projects. We are preparing other large projects regarding hydroelectric plants, for which we have secured EUR 45 million from the European Bank for Reconstruction and Development. We expect the construction of an EPS wind farm near Kostolac to begin in autumn," he remarked.

Markovic added that there were plans to build large hydroelectric plants on the Great Morava, Ibar, Drina and Danube rivers.

Jezdimirovic state that the first solar plant was a pioneering effort employing Serbia's resources, expretise and infrastructure.

This type of investments will provide budget revenue, improve economic development, create new jobs and help protect the environment in Serbia, she pointed out.

Stamatovic said Zlatibor is a good place to build solar plants because it has 250 days of sunshine each year.

The two companies started a project to build 50 small power plants, 28 of which will be located in the city of Uzice area, western Serbia.

Dunav Osiguranje, one of the largest insurance companies in Serbia, is the main investor, while EPS is co-investing.