Sarajevo, June 3, 2025 — Bosnia and Herzegovina may soon face the largest international arbitration case in its history, following a financial dispute led by Republika Srpska. The issue stems from a €67 million debt owed by the Ugljevik Mine and Thermal Power Plant to Slovenia’s state-owned electricity company, Elektrogospodarstvo Slovenije.
The deadline for payment expired on May 31, and if no agreement is reached soon, the Slovenian company has announced its intention to initiate arbitration proceedings before the International Centre for Settlement of Investment Disputes (ICSID) in Washington. The total value of the claim could approach €700 million.
Despite the missed deadline, management at RiTe Ugljevik expressed confidence that the matter can still be resolved without arbitration.
“I am sure that in the next 10 to 15 days we will resolve the remaining issues—the €67 million interest and the matter of Washington arbitration,” said Diko Cvijetinović, Director of RiTe Ugljevik. “We are very close to an agreement and I believe we will soon be able to inform both our workers and the public that this issue has been settled.”
Elektroprivreda Republike Srpske (ERS), the parent company, previously proposed a settlement via the company Nova Alumina, which offered to buy out the debt. However, this proposal was rejected by the Slovenian side, which insists on negotiating directly with ERS and RiTe Ugljevik.
“We are doing everything we can to resolve this,” said Luka Petrović, General Director of ERS. “If we fail, June 1 will not bring immediate consequences, but it could trigger legal processes that would cause enormous damage to ERS and Republika Srpska. We are seeking a final resolution that eliminates all disputes—no more arbitration in Washington or Belgrade, and no more accumulating interest.”
The dispute dates back to the Yugoslav era, when the Ugljevik power plant was built as a joint investment of several republics. Slovenia’s Elektroprivreda contributed funds in exchange for one-third of the electricity produced. Although the plant resumed power deliveries to Slovenia after an earlier international dispute, the debt issue has remained unresolved.
Energy and economic experts are warning of broader consequences if the matter escalates.
“In a very short period, RS has gone from being a major exporter to a major importer of electricity,” said energy expert Damir Miljević. “This points to poor planning by Elektroprivreda and mismanagement in production strategies.”
Economist Aleksa Milojević went further, claiming the company is nearing collapse. “Elektroprivreda has no realistic path to survival under current ownership. The government will likely be forced to sell. The company cannot pay its debts, and its financial statements have been manipulated to hide the real scale of losses.”
If arbitration is initiated, it could have sweeping financial and political implications for Bosnia and Herzegovina, Republika Srpska, and the regional energy sector.
