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BANJA LUKA (Bosnia and Herzegovina), March 7 (SeeNews) - The European Bank for Reconstruction and Development (EBRD) said on Tuesday it is strengthening the resilience of the local economy in Bosnia's entity, the Serb Republic, with a 15 million euro ($15.8 million) loan to state-owed power distribution company Elektrokrajina.
The financing will be the first non-sovereign loan to a publicly owned power company in the Serb Republic, the lender said in a statement.
Apart from boosting the entity's economic resilience, the funds are also aimed at helping build sustainable and energy efficient – green – economies, it noted.
In line with this initiative the loan will enable Elektrokrajina to improve the reliability of power supply, strengthen the distribution network in order to enhance the integration of renewable sources of energy and reduce technical and commercial losses. This alone is expected to translate into a savings of about 63,000 tonnes of CO2 emission savings per year, the EBRD said.
The loan will be divided into two parallel tranches, with the EBRD providing up to 7.5 million euro and the Green Energy Special Fund (GESF) contributing the same amount. The GESF is a special fund established and managed by the EBRD with the contribution of the Taiwanese International Cooperation and Development Fund (TaiwanICDF) to support projects related to green energy technologies.
The loan is also supported with Technical Cooperation funds provided by the Austrian Programme Account DRIVE (Delivering Resource Efficiency Investments in the Western Balkans and Turkey), while additional support will be extended by the EBRD Shareholder Special Fund.
"The provision of our first non-sovereign loan in the Serb Republic is testament to our belief in its economic potential," Ian Brown, head of EBRD in Bosnia and Herzegovina, is quoted as saying.
Bosnia is made up of two autonomous entities - the Serb Republic and the Federation.
Since the beginning of its operations in Bosnia and Herzegovina, the EBRD has invested more than 2 billion euro in 137 projects in the country. The EBRD’s strategic priorities for the period 2016-18 for its countries of operations include re-energising growth, strengthening regional integration and addressing global challenges.