March 5 (SeeNews) - The Energy Community said Bosnia's State Aid Council should re-investigate the guarantee for a 614 million euro ($709.7 million) loan for the construction of a unit of Tuzla coal-fired power plant in line with the Energy Community legislation on state aid.
The Energy Community Secretariat calls for reopening of the procedure because independent lawyers have confirmed the Secretariat's preliminary assessment that the Tuzla thermal power plant (TPP) project contains elements of illegal state aid, the Secretariat of Vienna-based energy community said in a statement on Monday.
The lawyers' opinion has been submitted to Bosnia's state aid authority.
The Secretariat also stressed that the parliament of Bosnia's Federation entity should not approve the loan guarantee on the basis of a non-compliant decision by the State Aid Council.
In August, the Federation government said it decided to provide a guarantee for a 614 million euro loan from China's Ex-Im Bank to Bosnian power utility EPBiH, to be used to finance the construction of a 450 MW unit at the existing Tuzla TPP. The loan will finance 85% of the total cost of the project.
Following assessment of the State Aid Council’s decision and of additional documents provided by EPBiH, in 2018 the Secretariat came to the preliminary conclusion that the loan guarantee constitutes state aid, therefore the State Aid Council’s decision is not in line with the Energy Community state aid rules, the Secretariat said in the statement.
The Federation is one of two autonomous entities that form Bosnia and Herzegovina. The other one is the Serb Republic.
($ = 0.882923 euro)