23 February 2019, Saravejo — The EU energy watchdog on Friday urged a Bosnian regional parliament to postpone next week’s vote on the approval of a government guarantee for a Chinese loan aimed at helping power utility EPBiH expand its Tuzla coal power plant.
The Energy Community, a body established by the EU to extend the bloc’s energy policy to would-be members, said it considered it likely that the guarantee constitutes state aid and had asked an independent law firm to verify its preliminary findings.
“In this situation, the (Energy Community) Secretariat urges the Parliament…to postpone its decision as there is a certain probability that such decision would bring the country in a state of non-compliance with Energy Community law,” it said.
The body said it planned to publish an independent assessment of the situation next week.
In 2017, EPBiH picked China Gezhouba Group and Guandong Electric Power Design to build a 450 megawatt (MW) unit in the city of Tuzla, at a cost of 1.8 billion Bosnian marka ($1.04 billion), to replace three outdated units at the 715 MW plant.
Western Balkan countries are increasingly turning to China for funding as the EU, World Bank and other lenders cut back on financing coal-based projects.
Chinese-funded projects in Bosnia alone are worth around 3.8 billion euros.
Environmentalists say Bosnia must follow EU rules on subsidies in the energy sector, objecting to coal-based projects which do not meet EU standards and expose the cash-strapped countries to costly plant upgrades once they join the bloc.
They have also urged EU policy makers to take a tougher stance on air pollution from the region’s coal power plants, blaming the fumes for 3,900 deaths across Europe and health costs of up to 11.5 billion euros a year. ($1 = 0.8820 euros)