Faced with dwindling interest from cash-strapped and cautious European investors, the Balkans' creaking electricity infrastructure is happily soaking up more money from China.
Chinese investors are increasingly targeting energy projects in the Balkans, stepping up their presence and showing a willingness to take bigger risks than European rivals on a potentially lucrative market with links to the EU.
"It is important to say that Chinese companies ... are able to finance the project on very favourable terms," Serbia's Energy Minister Petar Skundric said in an interview.
"Apart from thermal plants, Chinese companies are interested in hydro plants, but also in investing in the gas and oil sector here and they are especially interested in renewable energy and construction of wind farms."
Big European Union companies including Austria's Verbund and EVN and the Czech Republic's CEZ Group have already invested in the region.
But with many European investors wary or unable to provide further funding due to the global financial downturn, Balkan governments see China as a solution.
"Considering the fact that the cash flow from EU countries is reduced, we are going to see more investors coming from China," said Hrvoje Stojic, a Zagreb-based analyst with Hypo-Alpe Adria bank.
Chinese companies have both the finances and the willingness to take on greater risk in the chase of potentially higher returns in the Balkans, Mr. Stojic said. It also offers another toehold into EU markets, he added.
"The energy sector is especially interesting because it has a potential for growth. There has been very little investment, markets are not fully liberalized and the prices are among the lowest in Europe. The consumption will definitely grow and there is a space for making money."
As a part of their path to the European Union, Balkan states have made commitments to liberalize their energy sectors by 2015 and pledged to achieve EU standards in power production by that time.
This will require plenty of investment to upgrade an aging energy infrastructure that has seen little investment in decades due to Balkan wars during the 1990s, and which is largely made up of polluting coal-fired plants.
"The companies from the EU are reluctant to invest because of the poor business climate," said Ljubodrag Savic, professor at Belgrade's Economics Faculty.
"Complicated administrative procedures, frequent changes of laws and uncertainty about future tax system drive many investors away."
Britain's Energy Financing Team was the first to seek a partner among Chinese companies and signed a $415 million (U.S.) deal with Dongfang Electric Corp. to build and equip its 300-megawatt coal-fired plant Stanari in Bosnia.
Serbia, which opened its doors to Chinese immigrants and goods during its international isolation in the Balkan wars of the 1990s, has seen substantial Chinese investment in recent months and top government officials expect even more.
In February, it agreed to the financing terms with the Chinese government for a $1.25-billion upgrade to the Kostolac power plant.
Chinese companies expressed interest in projects in EU member Romania, offering to enter in a partnership for construction of a coal-fired power plant.
In neighbouring Bulgaria, two Chinese companies Polar Photovoltaics and Wiscom plan to build a two-megawatt solar power plant.
Stephen Butler of KPMG said he expects Chinese wind developers and solar panel makers to boost investment in the western Balkans over the next few years.
"Chinese firms are now looking to compete with European and American firms at the global level, so investment opportunities in the region provide them with the chance to diversify their portfolios and build out their global presence," he said.