Serbian efforts to produce renewable energy from agricultural waste marked a milestone over the weekend with the opening of a $7.2 million biogas plant.

Serbian Prime Minister Ivica Dacic and Bojan Pajtic, his counterpart for the autonomous province of Vojvodina, Saturday officially brought online the first phase of a biogas plant built by the Serbian agricultural company Sava Kovacevic.

The plant in Vrbas, Serbia, is the first in the country to use biogas from livestock manure to generate electric and heating energy, as well as the first new energy facility to debut in the country in a decade, Dacic said.

The new biogas plant will be capable of producing up to 3 megawatts of electricity and heat annually.

Citing biogas as a significant investment opportunity, Dacic announced that $13 million would be funneled into the sector over 10 years, calling the Vrbas plant "a road map for many small and medium enterprises in the country."

The effort was financed by the Serbian renewable energy firm Mirotin Energo -- a subsidiary of Sava Kovacevic -- while Austria's Biogest served as its main technical and mechanical contractor, the Serbian business news website eKapija.com reported.

Austria's Erste Bank provided financial support for the Vrbas biogas plant, the website said.

Mirotin Energo Director Zdravko Pavicevic said last year when the plant's construction kicked off the potential creating jobs in renewable energy sector was there.

"We plan to keep the existing jobs, as well as to create new ones since we are not increasing our productivity by cutting the number of jobs but by boosting the production and by developing and expanding our system," he said.

Sava Kovacevic's farm business generates 27,000 tons of manure annually from 1,800 head of cattle on 12,400 acres of land in Vojvodina.

Company owner Djoko Vujicic told the Serbian daily Blic turning cattle waste into energy makes sense for such large-scale farm businesses.

"(We will use) more than 2,000 wagons of manure that until now have been uncontrollably releasing biogas and polluting the environment and it will in the future become a source of heat and power," he said.

"The project will turn gas produced by rotting manure and biomass through special equipment into methane to be used as fuel for the generators to produce electricity."

Its first phase boasts an electrical output of 1 megawatt with two additional stages planned, increasing the total electrical output to 3 megawatts -- enough to supply some 3,000 households with power.

In addition, the plant's thermal energy will be used to heat local hospitals.

Serbia currently generates 6 percent of its energy from renewable sources but has targeted 27 percent by 2020 -- roughly the current European average.

The country has "great potential" in biomass through wood products and biofuels such as ethanol but is hampered by "the lack of proper institutions to introduce renewable energy production incentives" and low levels of foreign investment, U.S. Department of Agriculture has estimated.

The U.S. agency reported this month investors were awaiting the outcome of policy debates over the levels of renewable energy production targeted by the European Union's Energy Community of South East Europe.

Under an agreement reached Friday, Serbia will have to increase the share of renewable energy in total energy consumption to 27 percent by 2020, Serbia's Minister of Energy, Development and Environmental Protection Zorana Mihajlovic said.