Council of Ministers of Bosnia and Herzegovina Holds Its 85th Extraordinary, Phone, Session

KfW LOAN FOR DEVELOPMENT OF “POKLEČANI” WINDMILL

The Council of Ministers of BIH defined a Proposal Loan and Project Agreement between KfW, Frankfurt am Main (KfW) and Bosnia and Herzegovina, represented by the Ministry of Finance and treasury (Borrowr), and the Federation of Bosnia and Herzegovina, represented by the Federal Ministry of Finance, and Public Company Power Utility of the Croatian Community of Herzeg-Bosnia, Sct. Mostar (Project Implementation Unit), in amount of EUR 65 million for “Poklečani” Windmill, with a Platform for its conclusion.

The Project covers development of 20 wind turbines of 6.6 MW unit total installed force, and 132 MW total installed force, with expected annual generation of about 436.96 GWh of electric power.

The development of the “Poklečani” Windmill will improve distribution grid by way of development of transform facility, which should increase power supply security to consumers in the wider areas of Rakitina and Blidinje.

By the Project implementation, the Power Utility of Herzeg-Bosnia, Sct. Mostar will expand tis generation capacities for 14.6% and will increase annual generation for about 20%, simultaneously reducing dependence on hydrologic condition and market prices of electric power. It will increase economic competitiveness, by reaching more competitive prices of electric power.

The EUR 65 million loan will be allocated to the Federation of BIH, with 15 year-term and five year grace period, provided that the Agreement is signed by December 2026.

The Proposal Agreement with Platform for its conclusion will be sent to the BIH Presidency for further procedure, with a proposal for the Minister of Finance and Treasury to act as the BIH signatory thereof.

HIGH VOLTAGE AND LOW VOLTAGE NETWORKS IN AREA OF ODS POWER UTILITY, BANJA LUKA

The Council of Ministers of BIH defined a Proposal Loan Contract (Elektrokrajina Network Reconstruction and Upgrade) between Bosnia and Herzegovina and the European Bank for Reconstruction and Development in amount of EUR 38 million, with a Platform for its conclusion.

The Project includes rehabilitation and reconstruction of old high voltage and low voltage network in the area of Elekrokrajina, Sct. Banja Luka, the major ODS in Republika Srpska, covering five cities, 16 municipalities, and 8,890 m2 surface.

The planned rehabilitation and reconstruction will cover about 700 km of high voltage and 1000 km of low voltage network, including works on replacement of facilities, which should contribute considerably to reliability of supply, reduction of losses of electric power and increased energy effectiveness.

The undelaying target and purpose of the Project is an increased quality and reliability of supply to end users of distributive network; the Project implementation will contribute to increased capacities of distribution network to result in an improved capability for adding new users, and particularly additional distributive renewable sources of energy.

The EUR 38 million loan will be allocated to Republika Srpska – ODS Elektrokrajina, Sct. Banja Luka, with 20-year term, including four-year grace period. The Project is expected to be finalised by January 30, 2030.

The Proposal Contract with Platform for its conclusion will be sent to the BIH Presidency for further procedure, with a proposal for the Minister of Finance and Treasury to act as the BIH signatory thereof.

INITIATIVE ADOPTED: EUR 50 MILLION FOR IMPROVEMETN OF MAIN ROADS IN FBIH

The Council of Ministers of BIH adopted an initiative from the Ministry of Finance and Treasury of BIH and designated a negotiating team for conclusion of EUR 50 million Loan Agreement (Modernisation of Road Network in the Federation of Bosnia and Herzegovina) between Bosnia and Herzegovina and the European Bank for Reconstruction and Development

The main aim is improvement of highway infrastructure in the Federation of Bosnia and Herzegovina.

The investment programme covers three groups of projects, namely: construction and reconstruction, i.e. completion of new sections construction projects,, by-pass roads and reconstruction of the existing roads, which had started under the “Modernisation of Road Sector in BIH” (about KM 90,300,000); rehabilitation and repair of highways surface of total 1,305 km length in 74 sections (about KM 242,200,000); and consultancy   services and management improvement (about KM 19,600,000).

The costs of the overall operations programme in the Federation of BIH are estimated to amount about EUR 180 million (without technical assistance), and will be financed in parallel by the International Bank for Reconstruction and Development (IBRD) with EUR 70 million, European Investment Bank (EIB) with EUR 60 million, and EBRD with EUR 50 million. The Programme will be implemented by Public Company Roads of FBIH.

PROPOSED AMENDMENT LOAN AGREEMENT WITH IBRD

The Council of Ministers of BIH defined the Ministry of Finance and Treasury-proposed Proposal Amendments of Loan Agreement (Bosnia and Herzegovina – Health Systems Improvement Project, Loan No. 9351-BA) between Bosnia and Herzegovina and the International Bank for Reconstruction and Development, with Platform for its conclusion.

The Amendments of EUR 67.3 million Loan Agreement, proposed based on a request by the Ministry of Finance of Republika Srpska and the Ministry of Health and Social Welfare of Republika Srpska for project restructuring.

The Ministry of Finance and Treasury of BIH will send the Proposal Amendments to BIH Presidency for further procedure, with a proposal for the Minister of Finance and Treasury to act as the BIH signatory thereof.

EXTENDED COMPREHENSIVE PUBLIC FINANCE MANAGEMENT STRATEGY IN BIH

The Council of Ministers of BIH took note of a piece of information from the Ministry of Finance and Treasury of BIH and adopted an extension of a 2021-2015 Comprehensive Public Finance Management Strategy in Bosnia and Herzegovina.

The extension of the Comprehensive strategy is one of the mandatory criteria for disbursement of the second tranche of the Energy Package for Bosnia and Herzegovina (IPA 2023), in amount of EUR seven million.

The Ministry of Finance and Treasury of Bosnia and Herzegovina should continue its coordination activities on development of a new strategic framework of public finance management in Bosnia and Herzegovina for 2027-2031, in cooperation with international partners, for the aim of its final adoption by the end of 2026. (end)