Electricity

BiH blocks Tuzla 7 coal plant project

BiH halts Tuzla 7 coal project state aid

Photo: EPBiH

Published

July 6, 2022

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Published:

July 6, 2022

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The construction of unit 7 of the Tuzla thermal power plant encountered another obstacle with the decision of the State Aid Council of Bosnia and Herzegovina (BiH) to revoke its approval of the project. The contract for the 450 MW Tuzla 7 project was signed back in 2014.

The State Aid Council of BiH annulled its decision from 2018, when it found that a guarantee granted by the Federation of Bosnia and Herzegovina in favor of the Export-Import Bank of China for a loan to state-owned power utility Elektroprivreda BiH (EPBiH) for the Tuzla 7 project does not constitute state aid, the Energy Community Secretariat said.

The secretariat said that following its argumentation in an infringement case against BiH, the State Aid Council now decided that the guarantee constitutes illegal state aid, which the Federation’s Ministry of Finance is obliged to recover. The process was initiated in 2019.

Secretariat: The council accepted our arguments

The council’s move settles the infringement procedure, formally terminated by a decision of the Ministerial Council in 2021. It then found that Bosnia and Herzegovina has failed to comply with its obligations under article 18 of the Energy Community Treaty, which prohibits state aid.

A standstill due to the departure of General Electric

Chinese consortium Gezhouba Group and the Guangdong Electric Power Design Institute from China were hired to build the Tuzla 7 unit. The construction site has been ready since November 2020, but the activities were delayed after General Electric decided not to supply the equipment.

However, EPBiH later said it intended to continue the project and that it was looking for the best solution.

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