SARAJEVO (Bosnia and Herzegovina), March 8 (SeeNews) – Bosnia's finance ministry said that the country stands to lose millions in funding due to the decision of its biggest power utility EPBiH to pull out of the already agreed construction of hydro power plant Salakovac.
The ministry said in a statement it will do everything to avoid losing funds, endangering strategic projects, and disturbing the long-standing cooperation with the German government and the German development bank KfW after learning of EPBiH's plans which put at risk already agreed financing.
Bosnia's finance minister, Vjekoslav Bevanda, held a meeting with the director of KfW in Bosnia, Matthias Schmidt-Rosen, in order to eliminate problems and prevent the suspension of projects funded by the German government.
"Minister Bevanda and the management of KfW have learned that Elektroprivreda BiH has decided to abandon the construction of the Salakovac hydro power plant, for which credit funds have been envisaged totalling 45 million euro ($55.7 million) plus a one million euro grant," the finance ministry said.
The reconstruction of HPP Salakovac was envisaged by intergovernmental agreements concluded in 2011 and 2012.
"The obligations committed to under the agreements run out at the end of 2019, and unless a loan deal is signed by then Bosnia stands to lose millions," the finance ministry warned.
It added it will organise a new meeting with representatives of EPBiH and KfW to find a solution.
Currently, the German government is funding eight projects in Bosnia with 336 million euro.
EPBiH operates in the Federation entity, which together with the Serb Republic makes up Bosnia. A second power utility, Elektroprivreda HZ HB, operates in the Federation, while Elektroprivreda RS is active in the Serb Republic entity.
($=0.807260 euro)