September 9 (SeeNews) - The energy ministry of Bosnia's Serb Republic said on Wednesday it has signed a memorandum of understanding with China's Dongfang on a project for the construction of a 350 MW unit at the RiTE Gacko thermal power plant (TPP).
The Chinese company submitted a letter intent regarding the project earlier this year.
The memorandum is an expression of a willingness for mutual cooperation, while the parties are yet to legally agree on Dongfang's role in the construction of the new unit at the RiTE Gacko coal mining and energy complex, the ministry said in a press release, quoting energy minister Petar Djokic.
Whether or not Dongfang will be selected as the contractor for this project depends on the financing conditions, but the Chinese firm has shown a willingness to provide the necessary funds in the form of a credit arrangement, Djokic said.
The bearer of this project is the Serb Republic's power utility, Elektroprivreda RS. Works on the project should begin in spring next year, the ministry said earlier.
Dongfang is currently involved in the construction of the 300 MW Stanari TPP in the Serb Republic while also being in the selection frame for the construction of a 350 MW TPP within the RMU Banovici mining complex, located in Bosnia's other autonomous entity, the Muslim-Croat Federation.
In 2006, the Serb Republic made a pact with Czech energy group CEZ, based on which a joint holding was to be formed with Elektroprivreda RS for the purpose of reconstructing the existing Gacko power plant, revitalizing the adjacent coal mine, and building a new TPP, Gacko II.
The project was abandoned before the start of major capital investments.
The Gacko power plant - which operates a 300 MW TPP capacity, is one of two coal-fired plants in the Serb Republic.