Renewables

UniCredit to partly finance Bistrica hydropower project in BiH

UniCredit Bank Bistrica hydropower plant BiH

Photo: ERS

Published

April 18, 2022

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Published:

April 18, 2022

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Elektroprivreda Republike Srpske (ERS) got a EUR 15.3 million loan for the construction of three hydropower plants on the Bistrica river from UniCredit’s local branch. The project in the southeast of Bosnia and Herzegovina is worth EUR 102 million.

State-owned utility ERS said it signed a EUR 15.3 million loan agreement with UniCredit Bank Banja Luka for its hydropower complex on the Bistrica river. The project will be implemented “completely in accordance with ecological standards regarding environmental protection and to support the transition of the Republic of Srpska’s economy toward greater utilization of renewable energy sources,” the announcement adds.

The Bistrica endeavor is worth an overall EUR 102 million and ERS will cover 90% from own funds, General Manager Luka Petrović said. UniCredit was the best bidder in the tender, providing significant support to the investment cycle, he added.

The Bistrica system will have a total capacity of 39.5 MW, Petrović noted. In earlier project documentation, ERS said units B-1, B-2a and B-3 would have a combined 36.1 MW. The site for the three hydropower plants is in the country’s southeast.

ERS controls state-owned electricity generation assets in the territory of the Republic of Srpska entity in BiH. The country’s other entity is the Federation of BiH, where two other state-owned companies operate. Banja Luka is the capital of the Republic of Srpska.

Two triple hydropower plant projects in same area of Drina river basin

The contractor is AVIC-ENG – China National Aero-technology International Engineering Corp. from China. Bistrica is a left tributary of the Drina river. The site is near another hydropower project with three units, Gornja Drina (upper Drina), which the Republic of Srpska launched with neighboring Serbia.

ERS will use the funds to pay off its debt to its subsidiary Hidroelektrane na Drini, which owns project firm Hidroelektrane Bistrica

“We believe the cooperation between Elektroprivreda RS and UniCredit Bank is another example where the financial sector, institutions and companies are joining forces to establish the foundations for a better future, supporting the green transition and the economy’s gradual transition to sustainable operations,” said Gordan Pehar, President of the Management Board of UniCredit Bank Banja Luka.

The firm Hidroelektrane Bistrica is 100% owned by Hidroelektrane na Drini, in which ERS holds 65%. The state-owned utility has sought a creditor for the said hydropower complex for one year through public calls.

According to the latest updates, ERS intends to use the funds to pay Hidroelektrane na Drini for the offtaken electricity and the subsidiary would in turn boosted the capital of Hidroelektrane Bistrica, headquartered in the town of Foča.

Three Bistrica hydropower projects in BiH, another two in Serbia

Of note, ERS’s other subsidiary Hidroelektrane na Trebišnjici managed in February to adopt, in the second try, its decision to conduct a capital increase for the construction of the Dabar hydroelectric plant. The deadline for existing shareholders expired last week. ERS matched its current holding (64.9%) and invested EUR 42.7 million, Capital.ba reported.

The Pension Reserve Fund (PREF) of the Republic of Srpska didn’t exercise its preemptive right to participate. It held 10% before the capital increase decision. The Republic of Srpska Investment-Development Bank (IRBRS) didn’t consider the possibility for its Restitution Fund, which owned 5%, to participate in the transaction, the article adds.

ERS has invested EUR 42.7 million in the capital raise of its subsidiary Hidroelektrane na Trebišnjici with the aim to allocate funds for the Dabar hydropower project

Among the large shareholders, only the investment fund operator Kristal Invest, at 5.3%, is not controlled by the government of the Republic of Srpska. If the equity-raising round isn’t complete, the remaining new stocks will be offered via the Banja Luka Stock Exchange.

ERS is also preparing to list bonds on the Vienna Stock Exchange to raise funds for both projects.

It should be said that Serbia’s Elektroprivreda Srbije (EPS) is working on a project on its side of the border in the same area for a pumped storage hydropower plant which is also called Bistrica. Moreover, it already has an old hydroelectric plant nearby with the same name.

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