Presidents of Serbia Aleksandar Vucic and Azerbaijan Ilham Aliyev held the first session of the Strategic Partnership Council and outlined the priorities of the economic bloc – from energy and investment to trade, agriculture and tourism, Serbian Economist reports.
The key practical outcome was the formalization of a package of bilateral documents. Seven agreements and memoranda were exchanged in Belgrade, including agreements on the design, construction and operation of a gas turbine power plant in Serbia, cooperation in the field of food security, a memorandum between the ministries of economy, as well as documents on media and communications, culture (for 2026-2030), sports and interaction of health insurance systems.
The leaders explicitly call energy cooperation the basis for the next step – electricity production based on Azerbaijani gas. Aliyev said Baku has decided to increase natural gas exports to Serbia, linking this to plans for electricity generation and potential future exports.
In the Serbian interpretation, the gas-fired power plant project is already tied to the parameters: Vucic said that Srbijagas and SOCAR are in discussions, and the goal is to reach the launch of the plant with an installed capacity of 500 MW by 2029 (locations are considered in the Niš area).
Against the backdrop of the political increase in the level of relations, the sides are once again returning to the issue of trade turnover. According to the Serbian National Statistics Office, the foreign trade turnover with Azerbaijan in 2024 amounted to $512.6 million (5-fold growth), with the main contribution provided by the purchase of crude oil and oil products.
Baku, for its part, estimates trade turnover in 2025 at $135 million and notes the growth of imports of Serbian goods by 55% – this data was cited by Azerbaijani Finance Minister Sahil Babayev on the eve of the visit.
It was also noted at the Council meeting that direct flights between Baku and Belgrade should start in May 2026, which is expected to strengthen tourism and business contacts.
In the coming months, governments and line ministers should “land” political agreements in the form of concrete projects. Vucic and Aliyev have publicly recorded that they expect quick results before the next visit of the Serbian president to Azerbaijan during this year.
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The Slovenian Ministry of Foreign Affairs has announced the allocation of EUR 500,000 to support Ukraine’s energy sector.
“Slovenia has reaffirmed its solidarity with Ukraine, which is experiencing its worst energy crisis since the start of the war. We will add EUR 500,000 to support Ukraine’s energy sector,” the ministry said in a statement on social media on Friday.
The country’s Foreign Ministry also reports that since the beginning of Russian aggression, Slovenia has already allocated EUR 61 million to help Ukraine.
Ukraine’s real gross domestic product (GDP) grew by 1.8% in 2025, which is lower than the previous estimate of 2% by the Institute for Economic Research and Policy Consulting (IER) and the Ministry of Economy’s forecast of 2.2%.
According to the institute’s Monthly Economic Monitoring of Ukraine (MEMU), economic growth was 5.2% in November, but slowed to 3.4% in December amid ongoing Russian attacks on energy and railway infrastructure. Positive dynamics at the end of the year were supported by the contribution of agriculture, where gross value added (GVA) growth was 54% in November and 35% in December, as well as the trade sector (GVA growth was 5.9%), business services, and public services.
“This growth was partly supported by the population’s continued efforts to adapt to regular planned and emergency power cuts,” the IER explains.
At the same time, December saw a significant drop in GVA in the extractive industry — by about 19% (compared to December 2024) due to the negative impact of Russian attacks on gas, ore, and coal production. Electricity and gas production and distribution fell by 18% (compared to December 2024) due to large-scale damage to generation facilities, which led to power outages in the Odesa, Kyiv, Zaporizhzhia, and Dnipropetrovsk regions, and the Zaporizhzhia Nuclear Power Plant lost its external power supply again on January 2.
Real GDP in the manufacturing industry fell by 1.9% in December (compared to December 2024) due to problems with access to electricity, but the decline was mitigated by businesses adapting through the use of generators, cogeneration plants, and solar panels, as well as by defense purchases. In the transport sector, the decline in GDP accelerated to 10% due to massive shelling of ports and railway infrastructure.
In December, the energy sector showed a 53% increase in electricity imports compared to November, to 640,000 MWh, while there were no exports. In total, 762 MW of new gas generation was commissioned in Ukraine in 2025, and the capacity of qualified cogeneration plants exempt from excise tax reached 3.1 GW.
Consumer inflation in December fell to 8% compared to 2024, while compared to November 2025, the consumer price index rose by only 0.2%, which was one of the lowest figures for December since the country’s independence. According to the IER, the slowdown in inflation was facilitated by a good harvest, stable world food and oil prices, as well as moderate consumer demand and high competition among non-food products.
As reported, the Ministry of Economy, Environment, and Agriculture of Ukraine estimates Ukraine’s real GDP growth for 2025 at 2.2%. According to its information, the economy is growing thanks to domestic trade, construction, thanks to reconstruction projects, as well as the processing industry, in particular, the production of defense products and metallurgy. On the other hand, economic growth was hampered by massive Russian missile attacks on power generation facilities and, for the first time in years of full-scale war, on gas production infrastructure; lower yields of certain crops due to unfavorable weather conditions – a 26.9% decrease in soybean yields, a 15.8% decrease in sunflower yields, a 7.6% decrease in rapeseed yields, and a nearly 14% decrease in sugar beet yields; however, grain yields increased by more than 3%.
The ICU investment group also lowered its forecast for Ukraine’s economic growth in 2026 to 1.2% from 2.1% in 2025, while in July 2025, the company predicted a 2.5% increase in GDP in 2025, and 2.8% in 2026 due to damage to energy and transport infrastructure, electricity shortages and complications with maritime exports, a gradual reduction in the state budget deficit and fiscal stimulus, as well as businesses delaying investments due to high security risks.
Chinese state-owned company Dongfang Wind Power has signed a contract worth 495 million euros within the framework of the Belt and Road Initiative to supply 48 wind turbines for a 300 MW wind power project in Serbia, Serbian Economist reports, citing the Chinese industry portal Seetao.
According to the sources, Dongfang has conducted detailed site studies and optimized the turbine design taking into account Serbian standards, climatic conditions and power grid parameters. The investor and contractor of the project is China Power Construction Group (PowerChina).
The project, which has been linked in publications to the Vetrozelena wind power plant in the Pancevo region (Vojvodina), involves the installation of turbines with a unit capacity of about 6.25 MW. The expected generation is estimated at about 750-774 million kWh per year.
Vetrozelena is the largest wind power plant under construction in Serbia, with Čibuk 1 with a capacity of 158 MW being the largest operating wind power facility in the country.
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Foreign Minister Espen Barth Eide, who is visiting Kyiv, announced the allocation of 4 billion kroner in aid to Ukraine, which will be directed to the energy sector and the functioning of the Ukrainian state.
“Today in Kyiv, it is 16 degrees below zero. We can only imagine how cold it is when the electricity disappears, often for six hours at a time. This is money that Ukraine desperately needs and needs now. Several times a week, Russia attacks the infrastructure that provides electricity to ordinary people in Ukraine. Ensuring that Ukrainians can keep warm, cook food and live their lives more or less as usual is very important for them to be able to continue to endure this war. A war they are fighting on behalf of all of us,” Eide said.
It is noted that Norway is in constant dialogue with the authorities in Kyiv and other stakeholders regarding the distribution of Norwegian support to the energy sector. The goal is to meet Ukraine’s needs and share the risks. It is important to support energy production and strengthen the resilience of the energy sector.
‘It is necessary to finance the purchase of gas that can be delivered quickly. At the same time, it is necessary to repair damaged infrastructure and purchase spare parts,’ Eide explained.
Norway’s contribution will be channelled through partners such as the European Bank for Reconstruction and Development (EBRD) and the European Energy Community, which aims to extend the EU’s internal energy market to third countries such as Ukraine. This has been agreed with other key donors.
The official exchange rate on Monday was 1 Norwegian krone to 4.2606 hryvnia (or about $0.1).
Following a meeting with Portuguese Prime Minister Luís Montenegro, Ukrainian Prime Minister Yulia Svyrydenko announced the country’s first contribution to the Energy Support Fund for Ukraine in the amount of EUR600,000.
“During the meeting, the Prime Minister of Portugal announced the first contribution to the Energy Support Fund for Ukraine in the amount of EUR600,000. We highly appreciate this step by our partners,” the Telegram message said.
The parties also discussed Portugal’s defense support for Ukraine, in particular through the PURL and SAFE mechanisms, as well as the Build in Ukraine and Build with Ukraine initiatives, which have significant potential for developing cooperation, particularly in the field of joint drone production.
In the context of preparations for the next Conference on the Reconstruction of Ukraine, the parties agreed to work on the conclusion of an intergovernmental agreement (G2G) to promote the involvement of Portuguese business and investment in the Ukrainian market.
“I also emphasized to the Prime Minister that Ukraine is grateful to the leaders of the European Union for their decision to provide Ukraine with EUR 90 billion in funding over two years — this is incredibly important assistance for Ukraine,” the Prime Minister stressed.
