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Agricultural Land Regulation Opens New Possibilities for the Energy Sector

Agricultural Land Regulation Opens New Possibilities for the Energy Sector

Serbia
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Not so long ago (12 years!) Serbia adopted the amendments to the Agricultural Land Act which was supposed to allow the use of agricultural land for non-agricultural purposes, mainly to support the growing renewable energy sector. Of course, this was conditioned with adopting an adequate Regulation by the Serbian Government, which everyone waited for since 2009. Finally, patience paid off and in July 2021, the Serbian Government adopted the Regulation on the conditions, manner and procedure for giving state-owned agricultural land for use for non-agricultural purposes (hereinafter: “Regulation”).

Companies operating in the energy sector will probably benefit the most from the Regulation, having in mind years of struggling to resolve all necessary land titles for the construction of the wind and solar power plants and accompanying infrastructure (OHL, WTGs, solar panels etc.). In general, the Regulation allows the use of the agricultural land for (i) producing energy by using the energy of the wind and sun; (ii) performance of the geological works and exploitation of minerals, and (iii) commencing business activities which are related to the construction of facilities of importance for the Republic of Serbia.

The Regulation applies to a specific type of agricultural land which is registered in the real estate cadaster of the Republic Geodetic Authority owned by the Republic of Serbia including:

  • uncultivated agricultural land (which includes pastures, reeds and wetlands), and
  • arable country-owned agricultural land (which includes meadows, gardens, orchards and vineyards) of sixth, seventh and eighth cadastral class.

Use of agricultural land under the Regulation is limited in time to a maximum duration of 30 (thirty) years. This period is calculated from the day of concluding the contract on the use of the land. The procedure for obtaining the right to use agricultural land under the Regulation is carried out before the local municipality where the land is located and included (i) the public bidding procedure, (ii) the final decision on the use of state agricultural land for use, as well as (iii) the development of a project for return the subject land to its original condition after its use.

Remuneration for the use of the agricultural land is paid once a year upfront, and predefined to the following amounts:

  • five-times the amount of the average lease price per hectare of state agricultural land in the territory of the Republic of Serbia if the land is used for producing energy from renewable sources and/or construction of the facilities of importance for the Republic of Serbia; and
  • thirty-times the amount of the average lease price per hectare of state agricultural land in the territory of the Republic of Serbia if the land is used for performing geological exploration works and/or exploitation of minerals.

All agreements for use of the agricultural land concluded with the local municipality are registered before cadaster in form of prenotion of the use of the state-owned agricultural land.

This text is for informational purposes only and should not be considered legal advice. Should you require any additional information, feel free to contact us.

By Nemanja Providzalo, Senior Associate, and Aleksandra Bijeljac, Trainee, Samardzic, Oreski & Grbovic

SOG

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