Adoption of energy sector reform strategy highlighted as priority

Author: Admir Softic, Assistant Minister for Energy in the Ministry of Foreign Trade and Economic Relations of BiH

All participants of the fourth Energy Summit agreed that the adoption of the Energy Sector Strategy of Bosnia and Herzegovina is a prerequisite for continuing reforms. The Guide for Investors in the Electricity Sector in BiH, as well as recommendations for improving the investment framework, were also presented at the summit. This was an extremely important event for all of us who are involved in the energy sector reform, was it served as a single platform to examine the key areas and obligations towards the Energy Community and the European Union, as well as to identify the next steps.

For the fourth time, Neum was the meeting place of key energy sector players in BiH at the summit held from April 25 to 27, under the auspices of the Ministry of Foreign Trade and Economic Relations of BiH, the State Electricity Regulatory Commission of BiH, the Regulatory Commission for Energy of FBiH and the Regulatory Commission for Energy of Republika Srpska. The summit was organized by the USAID project Investing in the Energy Sector (EIA) in BiH and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) through projects Promotion of Renewable Energy in BiH and Promotion of Energy Efficiency in BiH.

Call to improve permitting procedure

What all participants of the 4th Energy Summit agree on is that the Energy Sector Strategy needs to be urgently adopted to further reform the energy sector. In addition, executive and legislative authorities must double down on reforms by implementing the existing strategic documents. According to participants, the independence of regulatory commissions is crucial for a stable and transparent energy sector, while regulatory committees should play an active role and be given authorities concerning energy efficiency. On the road to a self-sustaining energy sector, through transition and transformation of the energy sector, priority should be given to energy efficiency, emission reduction, renewable energy sources and gas as transitional fuel.

Governments and parliaments should start making the energy sector more transparent and convenient for investors. First of all, BiH needs to streamline the permitting procedure for energy facilities, increase the administration’s know-how, and draft guidelines for investors in order to facilitate investment.

Energy efficiency provides plenty of benefits for end users and can be a driver for different branches of the local economy. This is the reason why strategic planning is necessary in order to efficiently use the potential of the renewables, as the reform of the existing incentive system can create a competitive renewable energy market.

Guide for Investors in the Electricity Sector

Investments in the energy sector featured prominently in panels, the discussion, and recommendations. A Guide for Investors in the Electricity Sector in BiH was presented, providing a manual of procedures for the permit granting process, while more than a hundred recommendations on how to improve the investment framework were also presented during the summit.

The drafting of these documents included expert working groups with technical support from USAID and GIZ. The Panel on the Construction of Electricity Infrastructure in BiHfocused on finding optimal solutions for the implementation of these recommendations.

Recommendations are classified at different levels – from the strategic ones such as adopting missing strategic and spatial and planning documents, to the legal ones, such as aligning laws with EU directives and with each other and introducing an e-permitting system and a one-stop-shop, and those concerning implementing regulations, such as the adoption of missing rulebooks.

Complex and non-compliant procedures for issuing permits for the construction of new energy facilities, as well as a lack of strategic documents and spatial plans, result in the energy potential of BiH being under-utilized. Without new investments in the energy sector, BiH will not be able to maintain economic development and security of electricity supply.

Also, BiH’s obligations under international treaties are particularly important, and it is necessary to continue the reform, including the transposition of the Third Energy Package. For this reason, the Energy Community has launched several infringement procedures against BiH. A particularly prominent problem is the gas sector’s organization.

With all this in mind, it is clear that this was the most prominent energy sector event in BiH and that a clear vision on how to press ahead with reforms has taken shape. All participants in this process must engage more actively in the implementation of reforms within their purview in order to catch up with the region. I hope that at the 5th Energy Summit we will be reporting on numerous improvements in this area.

International Conference ENERGA 2018 in June

I would like to invite all stakeholders in the energy sector to visit Sarajevo on June 19-21, and attend the ENERGA International Conference 2018, which is being held within the International Fair of Energy and Mining ENERGA 2018, sponsored by the Ministry of Foreign Trade and Economic Relations of BiH.

During ENERGA, the focus will be on energy and climate policies, the establishment of a power exchange, security of supply and the future development of the gas sector in BiH, energy efficiency, renewable energy sources, low carbon urban development and electrification of transport.