The European Bank for Reconstruction and Development (EBRD) has approved a €35m loan to power utility Elektroprivreda Bosne i Hercegovine (EPBiH) for two hydro power projects in Bosnia and Herzegovina.
Around €26m are earmarked for the development of the 20MW Vranduk hydro power plant, which is located in the municipality of Zenica.
The project will increase the plant’s annual production capacity to 95.8GWh.
The remaining €9m will go for the modernisation of the Una hydro power plant, located near the municipality of Bihac, with an additional 6.4MW turbine installation.
The upgrade of the plant will increase its capacity to 15.8MW from the current 9.4MW and the new turbine is expected to generate an additional 21.4GWh of electricity per year.
EBRD Sarajevo office head Libor Krkoska said that this loan marks a very important step for the energy future of BiH, and represents a breakthrough for the EBRD’s efforts to secure the increased use of renewable sources of energy.
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By GlobalData"The loan represents the first major renewable capital investment by EPBiH in over 30 years," Krkoska added.
"Displacement of inefficient electricity generation units and energy sector reform remain the key economic transition challenges for BiH.
"This investment is designed to address both issues and will enable BiH to tap its excellent hydro potential."
Both projects will also reduce 95,000 tonnes of CO2 per year.
EPBiH general manager Elvedin Grabovica said that the approved credit facility represents the first non-sovereign guaranteed commercial loan between EPBiH and an international financial institution.
"The bank’s decision to finance the construction of EPBiH’s new hydro generation capacities, and actively participate in the development of the electricity sector in BiH, will help the country realize the renewable production commitment it made towards the EU," Grabovica added.
"This partnership will reinforce the credibility and enhance the reputation of our company on international financial markets, and help us with other capital investment projects."
