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SARAJEVO (Bosnia and Herzegovina), July 18 (SeeNews) - Bosnia’s Serb Republic will form a joint venture with China's Poly Group for the construction of a 300 MW thermal power plant, Gacko 2, the entity's energy ministry said on Tuesday.
Poly Group is planned to hold a 51% stake in the new company, while the Serb Republic will control a 49% share, the energy ministry said, sourcing the information to the entity president, Milorad Dodik, who met with representatives of the Chinese company in Belgrade, Serbia.
The government of the Serb Republic is expected to make a decision for establishing the joint venture company in the next 15 days, following which steps can be made towards its founding.
"We consider it very important, given the state of the existing power plant in Gacko", Dodik noted. "The Chinese partner is very credible".
In April, the energy ministry of the Serb Republic said it has signed a cooperation agreement on the construction of Gacko 2 with representatives of China Africa Investment and Development Co and China Machinery Engineering Corporation (CMEC). A year earlier, it also signed a memorandum of understanding for the construction of the plant with CMEC and Poly Group.
The Serb Republic previously announced it had picked Czech power utility CEZ for the project. However, in 2009 CEZ decided to pull out of the deal and sold its stake in Nove Elektrane RS (NERS), a joint venture company set up to build the new power plant.
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 the 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 the two coal-fired plants in the Serb 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.
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