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SARAJEVO (Bosnia and Herzegovina), March 27 (SeeNews) - The Energy Community Secretariat sent an opening letter to Bosnia expressing its concerns regarding the state aid compliance of a public guarantee granted to China's Ex-Im Bank on a loan for the Tuzla TPP project, it said on Tuesday.
The purpose of the initiated preliminary procedure is to give Bosnia the opportunity to react to the Energy Community's law allegation of non-compliance within two months, thus enabling the Secretariat to establish a full case background, it said in a statement.
In August, the Federation government decided to provide a guarantee for a 614 million euro ($692.6 million) loan from China's Ex-Im Bank to Bosnian power utility EPBiH, to be used to finance the construction of a 450 MW unit at the existing Tuzla TPP. The loan will finance 85% of the total cost of the project.
The Secretariat found that the State Aid Council’s assessment is not in compliance with the state aid acquis, and that the guarantee for the Tuzla TPP project does constitute state aid.
Bosnia and Herzegovina's State Aid Council has found that this guarantee does not contain elements of state aid.
Following assessment of the State Aid Council’s decision and of additional documents provided by EPBiH, in 2018 the Secretariat came to the preliminary conclusion that the loan guarantee constitutes state aid, therefore the State Aid Council’s decision is not in line with the Energy Community state aid rules.
The Federation is one of two autonomous entities that form Bosnia and Herzegovina. The other one is the Serb Republic.
(1 euro = $1.12802)