April 3 (SeeNews) - The upper house of the parliament of Bosnia's Federation entity has confirmed the loan guarantee granted to China's Ex-Im Bank for the construction of a new unit at Tuzla coal-fired power plant, local media reported.
The House of Peoples adopted the decision despite the Energy Community Secretariat's concerns regarding the compliance of the loan guarantee with the Energy Community's state aid rules, news portal eKapija reported on Tuesday.
The loan guarantee was approved earlier by the lower house of the Federation parliament, the House of Representatives, local media reported on Tuesday.
Last month, the Energy Community Secretariat sent an open letter to Bosnia, saying it has found that Bosnia's State Aid Council assessment is not in compliance with the state aid acquis, and that the guarantee for the Tuzla thermal power plant (TPP) project does constitute state aid. However, Bosnia and Herzegovina's State Aid Council has found that this guarantee does not contain elements of state aid.
Following assessment of the State Aid Council’s decision and of additional documents provided by Bosnia's state-owned power utility Elektroprivreda BiH (EPBiH), in 2018 the Secretariat came to the preliminary conclusion that the loan guarantee constitutes state aid, therefore the State Aid Council’s decision is not in line with the Energy Community state aid rules.
In August 2018, the government of Bosnia's Federation entity said it decided to provide a guarantee for a 614 million euro ($687.3 million) loan from China's Ex-Im Bank, to be used to finance the construction of a 450 MW Unit 7 at the existing Tuzla lignite-fired power plant. The loan will finance 85% of the total cost of the project.
The Federation is one of two autonomous entities that form Bosnia and Herzegovina. The other one is the Serb Republic.
(1 euro = $1.11945)