Bosnia’s $ 1.1 billion China-backed coal-fired power plant deal at risk
SARAJEVO (Reuters) – A China-backed deal to help Bosnian utility EPBiH expand its coal-fired power plant in Tuzla has encountered problems after General Electric pulled out of the project, a senior Bosnian official told Reuters on Thursday.
Nermin Dzindic, Minister of Industry and Energy in the government of the Autonomous Bosnian-Croat Federation of Bosnia, made the comments following the publication of documents on the $ 1.1 billion project on the portal. information from Sarajevo Klix last week.
EPBiH selected China Gezhouba Group and Guandong Electric Power Design in 2014 to build a 450 megawatt (MW) unit in Tuzla at a cost of 1.8 billion Bosnian marks ($ 1.1 billion) to replace three aging units of the 715 MW power plant.
Documents released by Klix indicated that the Chinese partners had informed EPBiH in January that GE was abandoning and offering alternative subcontractors, but EPBiH rejected the proposed replacement companies.
“In this way, the contractor was left without the designated subcontractor for the boiler, turbine and generator,” said Dzindic, adding that the government had passed the information to Parliament to decide on the next steps.
GE did not immediately respond to requests for comment on the Bosnian project.
GE announced in September that it would stop manufacturing coal-fired power plants, with the U.S. industrial conglomerate focusing more on renewable sources of power generation.
According to the same documents released by Klix, EPBiH said it would break the contract, which is believed to be the biggest post-war energy investment in Bosnia, unless the government and parliament come up with a different solution.
Chinese donors had offered two Shanghai-based companies to provide the equipment that GE would have brought.
EPBiH officials declined to answer Reuters questions on the matter.
Chinese bank Exim has agreed to finance 85% of the project, with EPBiH taking over the remaining 15%. Construction was scheduled to start in July of last year, but was delayed due to the coronavirus pandemic.
Balkan countries that rely heavily on coal for power generation are increasingly turning to China for funding as the European Union, World Bank and other institutions cut funding for grassroots projects. of coal.
Additional reporting by Ivana Sekularac in Belgrade; Editing by David Clarke