Court of BiH annuls ruling that state aid for coal plant Tuzla 7 was illegal

Court of BiH annuls decision on illegal state aid for coal-based unit Tuzla 7

Photo: EPBiH


January 31, 2023





January 31, 2023




The Court of Bosnia and Herzegovina annulled the ruling of the State Aid Council of BiH that loan guarantees for the Tuzla 7 coal power plant project were illegal. Government-controlled coal and power producer Elektroprivreda BiH pointed out the verdict voids the initial decision and that the case would be returned to the regulatory body for reconsideration.

The Court of BiH annulled the ruling of the State Aid Council of BiH that the state aid in the form of a guarantee from Elektroprivreda BiH (EPBiH) for a loan for the construction of unit 7 at the Tuzla thermal power plant is not in accordance with the Law on the State Aid System.

The Energy Community Secretariat previously initiated a dispute, alleging that the project had received illegal state aid, which the State Aid Council then confirmed. In the latest twist, the Court of BiH annulled its decision.

It means that the ruling that the state aid package is illegal is now void. The case was returned to the aforementioned regulatory body for reconsideration.

The Federal Ministry of Finance was told to take measures to recover the disputed state aid, but the decision has now been annulled

The lawsuit was brought by the Federal Ministry of Finance, as the guarantor. It was obligated to take measures to recover the allegedly unlawfully granted aid, but the decision has now been annulled, EPBiH said. According to the company, the Court of BiH annulled the regulator’s decision because the state aid in question wasn’t used yet.

The Energy Community Secretariat started the initial lawsuit

The State Aid Council’s previous ruling was based on a decision issued by the Energy Community Ministerial Council.

In 2018, the Energy Community Secretariat initiated a procedure against BiH claiming the Government of the Federation of BiH committed an offense by providing the guarantee. It argued that it gave EPBiH a more favorable position than other participants. The dispute was launched under the assumption that the state aid breached the rules of the European Union.

EPBiH paid EUR 24.54 million for loan guarantees to the Government of FBiH

EPBiH now said the sum was approved under the same market conditions under which a bank would issue a bank guarantee and in line with BiH law, regulations, and procedures. The utility paid EUR 24.54 million to the Government of FBiH together with a fee implying the acceptance of commercial conditions.

Block 7 unit on the list of capital projects of EPBiH

EPBiH has included the Tuzla 7 unit in its capital investment projects. According to its website, the company is developing a string of projects to secure the energy future including Tuzla 7 of 450 MW and the Kakanj 8 coal-fired unit.

Tuzla 7 would replace obsolete capacities and produce electricity and heat for Tuzla and the surrounding area, EPBiH added.

However, the main contractor – the Chinese consortium of Gezhouba Group and Guangdong Electric Power Design Institute (GGGC-GEDI), previously informed EPBiH that it could not fulfill the engineering, procurement, and construction (EPC) contract.

The main reason is that General Electric (GE) canceled the contract and withdrew from the project. GE was supposed to provide the boiler, turbine, and generator. FBiH later rejected the Chinese consortium’s proposal to have the equipment delivered by another subcontractor.

Comments (0)

Be the first one to comment on this article.

Enter Your Comment
Please wait... Please fill in the required fields. There seems to be an error, please refresh the page and try again. Your comment has been sent.

Related Articles

slovenia fee municipalities wind farms

Municipalities in Slovenia to get EUR 200,000 per MW of installed wind farm capacity

01 December 2023 - Incentives are another attempt to speed up wind farm projects in Slovenia, which hosts only three wind turbines

Sustainability risk management key Croatia green transition

Sustainability, risk management are key for Croatia’s green transition

01 December 2023 - Ne CEO of Croatia's regulatory body HROTE Darjan Budimir says sustainable business models and quality in risk management are key for a successful green transition


France’s EDF sells Europe’s first green bonds for nuclear energy

01 December 2023 - French state-owned power utility EDF raised EUR 1 billion for nuclear energy through a green bond issue, the first of its kind in Europe

Greece launch first guarantees origin auction early January

Greece to launch first guarantees of origin auction in early January

30 November 2023 - The first guarantees of origin of electricity in Greece are reportedly planned to be auctioned in the first half of January