Power distribution company Elektro-Bijeljina, a subsidiary of state-owned power utility Elektroprivreda Republike Srpske (ERS), has signed a EUR 15 million loan agreement with the European Bank for Reconstruction and Development (EBRD) for the reconstruction of the medium and low-voltage power network in Elektro-Bijelijina’s distribution area and the installation of smart meters.
The loan to finance the smart grid project will cut distribution losses to the technical minimum of 6.5%, which is a standard in Western Europe, Head of the EBRD Office in BiH Ian Brown was quoted as saying after signing the agreement with Elektro-Bijeljina General Manager Nedeljko Ćorić.
Losses in the distribution of power and high consumption due to outdated and inaccurate meters are major contributors to the high energy intensity in Bosnia and Herzegovina which causes additional costs to consumers, the EBRD said in a news release.
Investing in a more modern, efficient, and flexible power distribution network will promote improved efficiency through reduced power losses and greater awareness of energy consumption patterns. It will also facilitate the penetration of higher levels of distributed renewable energy, the EBRD said.
Ćorić said that the loan comes with an interest rate of 2.25% on average and a 15-year repayment schedule with a three-year grace period, he said, adding that he expects repayment to be financed from reduced distribution losses, according to a statement from the Republika Srpska government.
No third parties will be brought in on the works, Ćorić said, adding that the value of the project will fetch BAM 50 million (around EUR 25.6 million).
The financing is provided as a loan to Elektro-Bijeljina, the EBRD said, adding that up to EUR 7.5 million of the loan will be provided by the Green Energy Special Fund, established and administered by the EBRD with the contribution of TaiwanICDF.
Elektro-Bijeljina, which covers about 20% of Republika Srpska’s territory, is the second ERS subsidiary after Elektrokrajina to get lending from the EBRD for the same purpose.