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SARAJEVO (Bosnia and Herzegovina), April 3 (SeeNews) - The energy ministry of Bosnia’s Serb Republic said on Monday it has signed a cooperation agreement on the construction of a 300 MW thermal power plant, Gacko 2, with representatives of Chinese companies China Africa Investment and Development Co and China Machinery Engineering Corporation.
The agreement, which foresees the construction of a 1.0 billion marka ($544.3 million/511.3 million euro) TPP, provides for the formation of a coordination body to analyse the parameters of the final deal, including previously estimated coal reserves in the area and the value of the equipment necessary for the project design and implementation, the energy ministry said in a statement.
The ministry also signed a framework agreement on long-term business cooperation on strategic investment projects with China Africa Investment and Development Co.
Last year, the ministry signed a memorandum of understanding for the construction of a 300 MW thermal power plant Gacko 2 with representatives of Chinese companies CMEC and China Poly Group, with plans for works to be launched in mid-2017.
The Serb Republic had previously picked Czech utility CEZ for the project. However in 2009 CEZ decided to sell its stake in the Nove Elektrane RS (NERS) joint venture, which was to build a new power plant and upgrade an existing power station located near the southern Bosnian town of Gacko.
A few months later, CEZ launched an arbitration case against Bosnia over what it said was the Balkan country's failure to honour its commitments under a 1.46 billion euro ($1.55 billion) joint power plant project. The company won the case in 2014.
The Gacko energy and coal mining complex is located in the southern part of the Serb Republic, near the entity's borders with Croatia and Montenegro. Gacko is one of two coal-fired plants in the Republic. The other plant of the same capacity is part of the Ugljevik energy complex located in northeastern Bosnia.
The Serb Republic is one of the two autonomous entities that make up Bosnia and Herzegovina. The other one is the Federation.
(1 euro= 1.95583 marka)