Reacting to EU protests over Bosnia’s acceptance of a Chinese loan for the construction of a thermal power plant in Tuzla, Bosnian leaders said on Thursday that the Europeans could have also offered to invest and that the alternative to the power plant right now is having no electricity.
The parliament of the Bosniak-Croat majority Federation (FBiH), adopted last week several decisions needed for the beginning of the construction of the thermal power plant Block 7 in Tuzla, which is supposed to substitute the outdated blocks 1, 2, 3 and 4, scheduled to be gradually shut down by 2027.
But the EU is trying to go green as much as possible and plans to gradually get rid of coal-dependent energy.
According to the EU-Commissioner for European Neighbourhood and Enlargement Negotiations, Johannes Hahn, the acceptance of a Chinese loan for building a thermal plant raises serious questions “not only about Bosnia's commitment to international treaties and European rules under the Energy Community Treaty but also about the choice of the energy technology as well as about a sound cost-benefit analysis in a responsible and transparent manner.”
The EU is concerned that outdated technology will be installed in the new plant but Bosnia’s officials insist the technology will be imported from the United States.
“I am sure FBIH representatives have good reasons for their majority decision and will be able to explain this to their citizens,” Hahn tweeted, noting that issues like environmental impact assessments, state aid and public procurement procedures will certainly be closely looked at during EU’s assessment of Bosnia’s readiness to join the Union.
The 450 MW Block 7 will cost the FBiH a whopping €870 million, of which 614 million will be coming from a loan granted by China’s Exim bank.
This appears to be additionally worrying the EU as Russia is seen as already having the upper hand in the other Bosnian semi-autonomous region, Republika Srpska (RS). Now China is entering the FBiH with lower interest-rates and highly favourable repayment conditions than the ones the EU banks are offering.
What could happen next is a clash between Chinese and Russian interests in the energy sector on the territory of Bosnia and Herzegovina, although the two could also find a common interest, claims security expert, Ahmed Kico.
FBiH Prime Minister, Fadil Novalic, said the FBiH entity has no alternative because the scenario of it running out of power by 2027 is real.
This would compromise the entire energy system of the country, and the consequences of this scenario would be devastating for the country.
“Let me cite a Brussels speaker I heard once in Slovenia,” Novalic said. “He said that new thermal plants on coal are not the best thing in the world, but much worse are old thermal plants and the worst is not to have electricity at all.”
Lawmaker Zlatko Miletic, said he understands the concerns of the EU about a number of projects China is financing in Eastern Europe “but if they are really concerned that much, then the gentlemen from the EU should have reacted earlier and offered the money themselves.”