Federation of BiH secures EUR 83 million for just transition of coal regions

Bosnia and Herzegovina has secured EUR 83 million for a just transition project, which includes installing renewable power plants, social protection measures, and skills development in coal regions.

The funds are for the Federation of BiH, one of the two entities constituting Bosnia and Herzegovina.

The Board of Executive Directors of the World Bank has approved a EUR 79.9 million loan and a EUR 2.89 million grant to support Bosnia and Herzegovina’s National Energy and Climate Plan, enhance energy independence, foster job opportunities, and strengthen local economies in former coal regions.

It explained that the Just Transition in Select Coal Regions of Bosnia and Herzegovina Project would help repurpose post-mining lands in Banovići, Zenica, and Kreka, and facilitate the closure of underground works in Zenica. The project entails support for the installation of renewable energy systems at Banovići and Kreka mines.

The project has four components

The measures also involve social protection and skills development for workers and communities seeking opportunities outside the coal sector, the international financing institution noted.

The project will be implemented by the Federal Ministry of Energy, Mining and Industry and the state-owned RMU Banovići coal mine operator and power utility Elektroprivreda Bosne i Hercegovine (EPBiH). It has four components.

The first focuses on enhancing the capacity of coal regions, their entities, and the state-level government to manage a just transition. It will support the Committee on Just Transition at the State Level, a state-level knowledge platform, and capacity building of the Interministerial Committee on Just Transition in the Federation of BiH.

The project includes the land repurposing master plans in Banovići, Zenica, and Kreka

Technical assistance to relevant FBiH ministries to enhance the existing regulatory laws on labor transitions will be provided.

Component 2 supports the repurposing of select post-mining lands in Banovići, Zenica, and Kreka, and closure of specific underground works in the Zenica mine. The segment includes implementing the land repurposing master plans in all three areas

The third part envisages the construction of new power plants. A photovoltaic system of 27 MW in peak capacity will be installed at two identified sites at the Banovići and Kreka mines. Annual power production is projected at over 30 GWh.

Sheldon: To make sure no one is left behind

Component 4 aims to mitigate the social and labor impacts of coal transition on workers and communities by covering the financial obligations toward the miners in Zenica, reskilling and retraining eligible workers in Banovići and Zenica, and supporting affected communities through community investment, the project reads.

According to the World Bank, BiH is developing a National Energy and Climate Plan (NECP). The lender intends to ensure that mine closure is environmentally and socially responsible, supporting new job opportunities and strengthening local economies in former coal regions.

“This new project is an opportunity to boost BiH’s energy security while supporting communities, making sure no one is left behind,” said Christopher Sheldon, World Bank Country Manager for BiH and Montenegro.