SARAJEVO (Bosnia and Herzegovina), October 12 (SeeNews) – Bosnian state-controlled power utility Elektroprivreda BiH [SAJ:JPESR] said on Wednesday it has signed an electricity supply deal with local aluminum smelter Aluminij for 2017.
The signed agreement is of particular importance for Bosnia's economy as EPBiH is the country's largest electricity producer, while Aluminij is the largest consumer, the power utility said in a statement.
"The establishment of business cooperation between the two companies has a historical significance, and represents the beginning of a long relationship", EPBiH noted, hinting that the deal will be extended beyond 2017.
Aluminij was previously supplied by another Bosnian power utility, Elektroprivreda HZHB, towards which the smelter had piled on huge debts.
In October last year, Elektroprivreda HZHB and commercial banks unblocked the accounts of Aluminij that had been frozen for a period of 20 days over high debt.
Local media reported at the time that Aluminij owed Elektroprivreda HZHB some 130 million marka ($73.5 million/66.5 million euro), with debt rescheduling seen as the only solution which would enable the smelter to recover.
In a recent interview with SeeNews, Aluminij's director Mario Gadzic said that the company was paying an unacceptable amount of money for electricity under a deal concluded between the company's previous administration and the power utility.
"At the present moment, we are working actively to find a new supplier from which Aluminij can buy electricity at a lower guaranteed price", Gadzic explained at the time.
The government of Bosnia's Federation owns 44% of Aluminij, as much is controlled by workers and minority shareholders, while the Croatian government holds a stake of 12%.
Aluminij is based in Mostar in the Federation of Bosnia and Herzegovina, one of the two autonomous entities that form Bosnia. The other is the Serb Republic.
(1 euro=1.95583 Bosnian marka)