Federation of BiH stops Tuzla 7 coal power plant project

Federation BiH stops Tuzla 7 coal power plant

Photo: Government of the Federation of BiH


July 14, 2022





July 14, 2022




The Government of the Federation of BiH rejected the proposition from the contractors from China for an alternative supplier of equipment for the Tuzla 7 coal plant project. Earlier, the State Aid Council of BiH reversed its earlier decision and declared the state aid for the endeavor to be illegal. General Electric canceled the contract for the turbine a year ago.

Minister of Energy, Mining and Industry of the Federation of Bosnia and Herzegovina Nermin Džindić said the entity government officially supported state-owned power utility Elektroprivreda BiH – EPBiH to reject the possibility to hire another subcontractor for the construction of unit 7 in coal-fired thermal power plant Tuzla. “A legal team with international credibility” will suggest further steps with regard to the endeavor, in his words.

The decision will be passed on to the Parliament of the Federation of BiH, and the consortium of Chinese companies Gezhouba Group and Guangdong Electric Power Design Institute will be offered to continue the implementation of the deal under the terms of the contract from 2014, Džindić added.

The entity government told EPBiH to demand cancelation of the engineering, purchase and construction (EPC) agreement if the contractor can’t continue to fulfil its obligations. Unit 7 is planned for 450 MW.

The Federation of BiH is one of two entities making up Bosnia and Herzegovina. The other one is the Republic of Srpska.

Tuzla 7 already reached dead end one year ago

The consortium is responsible for the procurement of the boiler, turbine and generator. General Electric canceled its contract one year ago, and soon after it said it would exit the coal power market. Almost simultaneously, China vowed not to finance such projects abroad anymore.

The State Aid Council of BiH recently declared government support for the Tuzla 7 project to be illegal

Just last week, news broke out that the State Aid Council of BiH reversed its earlier decision and declared government support for the Tuzla 7 project to be illegal.

“Bosnia and Herzegovina’s energy sector must now do an about-turn and take decarbonization seriously. Our decision makers need to speed up sustainable renewables and energy efficiency like they mean it – we can no longer waste time on polluting and expensive projects,” said Denis Žiško from the Aarhus Centre in BiH.

Just formalities remain to scrap coal plant project

The entity government endorsed the assessments from its consultants and EPBiH that the proposed subcontractors don’t fulfill the conditions from the tender documentation.

“This decision has taken far too long but is very welcome. The end of the unfortunate Tuzla 7 saga is now a matter of formalities and Bosnia and Herzegovina can finally move on to more environmentally and economically sound energy planning,” said Pippa Gallop of CEE Bankwatch Network, which monitors the financing of projects that are unfavorable for climate change mitigation.

The construction of coal plant unit Kostolac B3 and the reconstruction of TPP Pljevlja, which are ongoing, could be the last such projects in the Western Balkans

In the Western Balkans region, only the Kostolac B3 coal plant unit is currently under construction. A string of other projects have been canceled or suspended, though some have lately reemerged.

At the moment, there is still a possibility that several units in Kosovo*, BiH and Serbia could be reconstructed. Montenegro has officially announced the start of works in April on the renewal of its only such thermal power plant, in Pljevlja.

Minister of Energy and Mining of the Republic of Srpska Petar Đokić said this week he doubts that the Ugljevik 3 coal plant project would be implemented. He made the remark immediately after the Center for Environment from Banja Luka, the entity’s capital city, said it sued his ministry for granting the environmental permit in violation of the rules and an agreement with the Energy Community Secretariat.

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