Germany to suspend financing for wind farm Hrgud, other projects in Republic of Srpska

The German government is suspending work on four infrastructure projects in the Republic of Srpska, worth a total of EUR 105 million, until the entity withdraws recent “unconstitutional” decisions and until state institutions are unblocked. The projects to be suspended are the Republic of Srpska’s first wind farm, called Hrgud, as well as two revitalization projects at hydropower plant (HPP) Trebinje and the construction of a wastewater treatment plant in Gradiška.

In a note to Bosnia and Hezegovina’s Foreign Ministry, Germany said it would stand firmly against any “separatist aspirations” which destabilize BiH politically and economically, according to media reports.

The projects are suspended over “separatist aspirations” destabilizing BiH

The political decisions in question are the transfer of powers from the state level to the entity and the passage of a law on immovable property used in the work of public authorities in the Republic of Srpska. The law has been suspended by Christian Schmidt, the UN’s High Representative for BiH, but Republic of Srpska top officials insist it has come into force.

Milorad Dodik has threatened to find investors in China for the 48 MW Hrgud wind farm

Milorad Dodik, the Republic of Srpska’s representative in BiH’s tripartite presidency, has warned that if Germany decides to cancel the loan, the entity will seek financing for the Hrgud project in China.

The projected installed capacity of wind farm Hrgud, with 16 turbines, is 48 MW, while its average annual output would be 126 GWh of electricity.

Germany has approved a EUR 60 million loan for wind farm Hrgud

The German development bank KfW has approved a EUR 60 million for the Hrgud wind farm project, while the rest of the funding, some EUR 4 million, is to be provided by the entity’s public power utility Elektroprivreda Republike Srpske (ERS).

Phase 3 of HPP Trebinje’s revitalization should be carried out simultaneously with phase 4

The financing of phase 3 of the HPP Trebinje revitalization project includes a EUR 4 million grant from the German government and a EUR 6 million loan from KfW.  The Republic of Srpska government approved the borrowing nearly ten years ago, but the project has not yet been implemented.

Phase 3 is now planned to be carried out simultaneously with phase 4, according to Ilija Tamindžija, executive director of state-owned Hidroelektrane na Trebišnjici (HET), which operates the hydropower plant, Radio Free Europe has reported.

A project to build a wastewater treatment plant in Gradiška is also in jeopardy

The project in Gradiška includes upgrading and expanding the town’s sewer network and building a wastewater treatment plant. KfW has approved a EUR 10.3 million loan for this purpose, while Switzerland’s government is expected to provide a EUR 4.3 million grant.

KfW declined to comment on the government’s decision.