Germany halts four projects in Republic of Srpska in BiH

The government in Berlin has decided to halt four infrastructure projects in the Republic of Srpska, worth a total of EUR 105 million, the Embassy of Germany in Bosnia and Herzegovina said. It cited the separatist aspirations of the entity and its President Milorad Dodik.

Germany blocked phases 3 and 4 in the revitalization of hydropower plant Trebinje, the construction of the Hrgud wind farm, and a wastewater management system in Gradiška. The Swiss government finances the last one as well.

The federal government in Berlin decided to allow the four infrastructure projects in the entity to expire, the embassy said. It argued that the Republic of Srpska and its President Milorad Dodik are continuing with their separatist policies.

BiH’s other entity is called the Federation of Bosnia and Herzegovina.

The four projects were temporarily suspended in April 2022

The embassy recalled that in April 2022 the German government decided to temporarily suspend the projects because of a vote in the National Assembly of the Republic of Srpska in December 2021 to transfer powers from the central state level to its entity and create its own institutions. The move was aimed at weakening BiH, according to the statement.

Next, Germany has asked for the parliamentary decisions to be revoked, calling them unconstitutional, and for the blockade of joint institutions to end. Instead, Dodik and the Government of the Republic of Srpska continued to escalate the political crisis, the embassy claimed.

The German federal government has now decided not to restart the suspended projects, so they are set to be aborted.

The decision doesn’t refer to other projects of German development cooperation at the level of BiH or the Western Balkan region nor to the cooperation with NGOs, the statement reveals.

KfW prepared loans for four projects

The four projects were supposed to get financing from Germany’s KfW Development Bank.

It has approved a EUR 60 million loan for wind farm Hrgud. The rest, some EUR 4 million, was supposed to be provided by the entity’s power utility Elektroprivreda Republike Srpske (ERS).

Funds for phase 3 in the Trebinje hydropower plant revitalization project were planned to include a EUR 4 million grant from Germany and a EUR 6 million loan from KfW.

The lender has also approved a EUR 10.3 million loan for the wastewater management system in the city of Gradiška while Switzerland signed a deal for a EUR 4.3 million grant.