One of the most controversial energy projects in Bosnia and Herzegovina (BiH) will apparently not be implemented. The land prepared for the construction of Block 7 of the Thermal Power Plant in Tuzla is empty, the new purpose has not been determined, and one of the proposals is the creation of a solar power plant.
Also, the issue of responsibility for the long-announced investment fiasco is open. But let’s from the beginning.
Although Elektroprivreda BiH has not yet officially announced the decision to terminate the contract with the Chinese partner, all the unofficial information collected so far indicates that the construction of Block 7 of the Tuzla Thermal Power Plant will not take place.
Environmentalists have been saying from the very beginning that this is an investment that is doomed to fail, primarily due to the trends that are happening in Europe and the world, which exclude coal from use.
“Even if that project had been implemented, the block would have been closed even before the loan for its construction would have been repaid. Also, in order for the block to pay off the investment, it must work for at least 40 years, which is not possible. Therefore, terminating the contract is the best thing we can do can happen, so that we don’t throw away those 700 thousand or one billion euros,” said Denis Zisko from the Aarhus Center.
The decision to build Block 7 of the Thermal Power Plant in Tuzla was made in 2014, and it was to be built by a consortium of Chinese companies China Gezhouba Company and China Energy Engineering Group Guangdong Electric Power Designing Institute.
The decision to build was made a decade ago
The intention was to finance the construction with a loan from the Chinese state bank Eximbank for Elektroprivreda BiH in the amount of 1.5 billion BAM. The Energy Community has warned several times that the state guarantee for this loan represents illegal state aid.
In the meantime, 300 million BAM has already been spent for the realization of this project, of which 200 million BAM was given only as an advance. A significant problem occurred when the American company General Electric withdrew from this project, whose equipment (boiler, turbine and generator as key equipment) was supposed to be in Block 7.
General Electric has pulled back after withdrawing from coal-based projects in 2020. A consortium of two Chinese companies offered to change the contract – to supply the key equipment to Chinese manufacturers with European technology or a license. However, Elektroprivreda BiH opposed this, claiming that it was protecting its interests.
Federal representative Admir Cavalic from Elektroprivreda BiH has not yet received an official answer on whether the contract has been terminated. He emphasizes that this is justified by the fact that in this case it will most likely go to arbitration proceedings and that each party tries to say as little as possible about the project, which, according to him, has obviously failed.
“Here we have a question of fiscal responsibility, due to 200 or 300 million BAM from taxpayers, because Elektroprivreda BiH was indirectly supported from the federal budget. Where is that money, what about the 20 or 30 million BAM spent on preparatory works, and what about all the money that was also spent on promotional activities,” Cavalic wonders.
He states that there is still no one responsible, that is, the culprit for the project that apparently failed.
“The question is whether they will ever respond. The Federal Parliament was used skillfully when it was necessary, conditionally speaking, to create the back for Block 7, on the other hand, the Government of the Federation of BiH (FBiH)and Elektroprivreda BiH did it discreetly without the recommendations of representatives of the European Union (EU) and other international organizations,” adds Cavalic.
A solar power plant instead of a coal block?
At this moment alone, BiH needlessly invested between 20 and 30 million BAM, which was spent on preparatory works. However, so that the money would not be completely lost, one of the proposals is to change the purpose of the developed land on which Block 7 was supposed to be formed.
“That lot is extremely favorable for solar. It’s level, the connection is there, and even if they put up a solar power plant temporarily it would pay off for them. Instead of growing weeds, they can put up solar panels until they finally figure out what to do next,” points out Zisko.
Tuzla Block 7 was supposed to have a capacity of 450 MW of electricity and 270 MW of thermal energy, and was rated as the largest post-war project of Elektroprivreda BiH and one of the largest investments in our country, Klix.ba writes.
E.Dz.
