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SARAJEVO (Bosnia and Herzegovina), January 16 (SeeNews) – Bosnian power utility Elektroprivreda BiH [SAJ:JPESR] said it has requested a government guarantee for a loan from China's Ex-Im Bank for the construction of a 450 MW unit at the existing Tuzla thermal power plant (TPP).
The finance and energy ministries of Bosnia's Federation are initiating the procedure towards negotiating the loan with Ex-Im Bank and the issuance of the guarantee, EPBiH said in a statement late on Friday.
The net contract price for the unit's construction is 722.35 million euro ($764.6 million). The loan being sought should cover 85% of the cost of the project, while EPBiH is to cover the remaining 15%.
In talks with representatives of the Chinese bank, an agreement has been reached for a loan term of 20 years with a grace period of 5 years and a repayment period of 15 years, EPBiH noted.
In 2014, Bosnia's Federation said it had selected a consortium of China's Gezhouba Group Company Limited and Gunagdong Electric Power Design Institute as the preferred bidder for the construction of Unit 7 at Tuzla coal-fired power plant.
Little progress has been made on the project's implementation to date. However, in November EPBiH said it has signed a framework deal for the construction of the unit with Ex-Im Bank.
According to Bosnian media reports, European Union credit institutions have declined to finance the project as it fails to meet the bloc's strict environmental requirements.
The Federation is one of the two autonomous entities that form Bosnia and Herzegovina. The other one is the Serb Republic.