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Bosnia and Herzegovina – ups and downs of 2009

Date: December 24^th 2009 Author: Mirsad Bajtarević, Sarajevo Category: Expert commentary
Topic: Electricity , Natural gas , Ecology

The project of merger of the seven mines in Federation BiH and the power utility Elektroprivreda BiH, and the formation of Elektroprivreda BiH concern was certainly the most important milestone in BiH in 2009 business year. The new company (concern) of some 16,000 employees has merged Elektroprivreda BiH and the mines Kakanj, Kreka, Breza, Durdevik, Zenica, Gracanica from Gornji Vakuf/Uskoplje and Abid Lolic from Bila near Travnik. Their foreseen revenues are to exceed half a billion Euros, which will rank the concern somewhere in the upper part of the ‘100 top SEE companies’ list. They expect that the concern will flourish early 2010 and after the consolidation of the respective mines, Elektroprivreda plans to invest 300 million Euros into restoration and modernisation of the mines before 2015.

Oil Refinery Bosanski Brod celebrated the first anniversary of its successful operation. At the ceremony which was held end November, the Russian owners of the Refinery – i.e. representatives of the company Zarubezhneft or to be more precise its subsidiary Neftegazinkor – confirmed their investment plans. Besides the

refineries at Bosanski Brod and Modric, Neftegazinkor is also the owner of Petrol who runs over a hundred pumping stations on the territory of Republika Srpska. Over the next five years, the Russian partner plans to invest one billion Euros in order to gain as much influence on the regional oil derivatives market as possible. Some 90 million Euros have already been invested into the Bosanski Brod refinery and approximately a ton of crude oil was processed in the first six months of 2009. They further announced that they were going to allocate 107 million Euros into modernisation of the machinery in 2010.

PHOTO: Ian Britton, FreeFoto.com

The largest downfall of 2009 was surely the blockage of the state company for power transmission Elektroprijenos Bosne i Hercegovine which is majority owned by Federation BiH with a 59-per-cent stake while the remaining 41 per cent is held by Republika Srpska. The blockage occurred owing to the fact that the members of the Management and the Board from Republika Srpska did not partake in any activities of either of the two bodies. As a result, some 65 million Euros is now deposited on the bank account of Elektroprijenos BiH instead of having been invested into building of power lines and transformer stations, which are urgent for operation of all three power utilities in Bosnia and Herzegovina, namely Elektroprivreda BiH, Elektroprivreda HZHB and Elektroprivreda RS. Elektroprijenos continued

its operation after High Representative of the International Community in BiH Valentin Inzko imposed certain decisions, in line with the mandate that had been awarded to him by the Management Board of the Peace Implementation Council. This took place in September, whereas later on, Prime Ministers of both entities – Mustafa Mujezinovic of Federation BiH and Milorad Dodik of Republika Srpska – agreed as shareholders on the principles for further operation of Elektroprijenos BiH.

The plan of the Party for Bosnia and Herzegovina and its Minister for Energy, Industry and Mining Vahid Heco was also a complete failure. The objective of the 3.5 billion Euro heavy scheme was to find a strategic partner for building several hydropower plants and new blocks to some of the thermal power plants. The project fell through due to difference of opinions with their coalition partner, the Party of Democratic Action, and due to disagreement with the way in which a partner would have been chosen. The Party for Bosnia and Herzegovina has already announced a new investment plan for the energy sector, worth five billion Euros.

PHOTO: © European Communities, 2009

Furthermore, the country faced some difficulties with gas supply early in 2009 when the entire Europe and therewith BiH experienced a shortage of gas due to the Russia-Ukraine row. They have managed to resolve the problem by means of cooperation between Sarajevo-based BH Gas and Srbijagas from Novi Sad. Additionally, they experienced certain difficulties in the operation of Federation BiH’s oil terminals at Ploce (Croatia). Although the respective terminals are currently operating, the issues regarding the ownership still remain unresolved.

To conclude with, Energetika.NET was a media sponsor of the Second Energy Council of BiH which was organised by the Sarajevo-based Centre for Economic, Environmental, and Technological Development (CETEOR) and held at Neum. It has been highlighted throughout the event that energy efficiency and renewable energies represented the future of the country’s development, yet also the problems of the future and therefore needed particular attention. Professor Aleksander Knezevic who also spoke of climate changes and vacillating politics told to Energetika.NET that Bosnia and Herzegovina was in the process of completing their first Climate Change Report which would be sent to the governments within BiH to ponder upon. He said that over the past 50 years, temperatures in Sarajevo had risen by one degree Celsius and those in Banja Luka by even two degrees. Rainfall regime had also changed, resulting in longer dry seasons and reduced snow cover thickness, Knezevic added.

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