SARAJEVO (Bosnia and Herzegovina), November 28 (SeeNews) – The CEE Bankwatch Network said on Tuesday that the construction of a new unit at the Tuzla thermal power plant (TPP) in Bosnia will have dire health, economic and climate repercussions for the Balkan country.
CEE Bankwatch issued a statement warning that the project is not ready, after Bosnian power utility Elektroprivreda BiH [SAJ:JPESR] announced on Monday it has signed a loan agreement with China's Ex-Im Bank to finance the construction of a 450 MW Unit 7 at lignite-fired Tuzla power plant.
"The fact that there’s an occasion to sign this loan agreement doesn’t make the project ready, quite the opposite - it is without the Parliament’s approval and haunted by legal and procedural challenges. The environmental permit is still being challenged in court, there is no energy permit, and the loan guarantee has not been approved by the State Aid Council", Ioana Ciuta, energy co-ordinator at CEE Bankwatch Network, said in the statement.
EPBiH said on Monday that Ex-Im Bank will lend 613 million euro towards the total cost of the project estimated at 722 million euro ($859.6 million). The loan will have a repayment period of 20 years, with a five-year grace.
The loan agreement was signed on the sidelines of a meeting of heads of government of China and 16 central and eastern European (CEE) countries, or the 16+1 Summit, held in Budapest, Hungary.
Bosnia's collective presidency has said that the cornerstone of the new 450 MW unit of Tuzla TPP could be laid at the end of November.
Denis Zisko from the Tuzla-based NGO Center for Ecology and Energy pointed out in the Bankwatch statement that the signing of the loan deal is a "death sentence for the population of Tuzla canton".
He explained that a study conducted by his center and the Health and Environment Alliance in 2013 has shown that between 2015 and 2030, 39,000 life-years will be lost as a result of the Tuzla TPP and a similar project planned in Bosnia's Banovici.
Pippa Gallop, research co-ordinator at CEE Bankwatch Network, said that China needs to demonstrate more leadership abroad by implementing its ‘Green Credit Directive’ for overseas investments.
"China Eximbank has failed to take into account the lack of environmental permit for the ash disposal site and has avoided disclosing information on its due diligence on the project. If China Eximbank finances projects like Tuzla 7 and others in the pipeline, there won't be much left to inspire confidence about China’s green leadership," Gallop opined.
In 2014, Bosnia's Federation entity said it has selected a consortium of China's Gezhouba Group Company Limited and Gunagdong Electric Power Design Institute as the preferred bidder for the construction of Unit 7 at Tuzla TPP. In November last year EPBiH said it has signed a framework deal for the construction of the unit with Ex-Im Bank. According to Bosnian media reports, European Union credit institutions have declined to finance the project as it fails to meet the bloc's strict environmental requirements.
The Federation is one of two autonomous entities that form Bosnia and Herzegovina. The other one is the Serb Republic.
The Czech Republic-based CEE Bankwatch Network is the largest network of grassroots, environmental and human rights groups in central and eastern Europe.
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