High fees burdening electricity producers in Bosnia's Serb Republic - EFT Group

High fees burdening electricity producers in Bosnia's Serb Republic - EFT Group Author: TPP Stanari. Licence: All rights reserved.

BANJA LUKA (Bosnia and Herzegovina), June 19 (SeeNews) – UK-based EFT Group said on Monday that despite a decision by the government of Bosnia's Serb Republic to lower concession fees for all thermal power plants in the entity, its annual outflows resulting from fees will continue to top those in the region and amount to some 10 million marka ($5.7 million/5.1 million euro).

The government announced it has lowered its concession fee from 3.6% to 0.5% of total revenue, but kept its natural resource use fee at 1.5 euro per MWh, meaning operators of TPP's in the entity will continue to pay top fees, the operator of the 300 MW Stanari TPP and mining complex said in a statement sent to SeeNews.

It explained that upon signing a concession deal with the government, the latter said it will abolish the fee for natural resources or reduce the concession fee. However, EFT added that despite the entity's latest decision, fees still remain higher than those in the region, including in Serbia.

EFT Group reiterated that it is actively seeking a strategic partner in its Bosnian business, in line with its long-term development strategy, but noted it has no interest in leaving the Serb Republic.

It denied recent media reports that it is suffering financial problems, adding that it is profitable and is regularly repaying the loans raised to build the TPP complex.

EFT also explained that the Serb Republic is not a guarantor on its loan with China's Development Bank, as has been speculated.

"The Serb Republic did not take on the role of the guarantor, nor did it commit to repaying the loan issued by the Chinese bank," EFT said.

"The entity may only incur costs in relation to Stanari if the concessions contract is cancelled due to reasons brought on by its government, such as requiring of EFT to pay the same fee twice - within the fees charged for the use of natural resources and the concession", the company warned.

EFT also added that a regular overhaul of its Stanari plant was concluded in May, since which the TPP has been working in full capacity.

EFT Group was awarded a concession contract to develop the Stanari TPP in 2008. The total value of the undertaking is estimated at over 560 million euro ($625.7 million).

The construction works on the power station, located near the Stanari coal mine in the area of the town of Doboj, began in 2012. The main building contractor was China's Dongfang.

The Stanari coal basin is situated some 70 km east of Banja Luka, in central Bosnia and Herzegovina. EFT has been operating the mine since May 2005.

EFT Group is an energy trading and investment group, focused on Western, Central and Southeastern Europe.

(1 euro=1.95583 marka)

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