The EBRD loan will finance the necessary infrastructure improvements at the power plant, located on the Una river, near Bihac, and the installation of an additional 6.4 megawatt (MW) turbine, increasing the capacity of the plant from 9.4 MW to 15.8 MW, the multilateral lender said in a statement.
The EBRD also said it is considering financing another hydro project in Bosnia and Herzegovina with EPBiH.
The loan proposal is due to be reviewed by the EBRD board on December 11.
Sarajevo-listed EPBiH operates in generation, distribution and supply of electricity.
($=0.7721 euro)