Bosnia scraps seven HPP contracts

25 April 2019, Week 16, Issue 957

Authorities in Bosnia’s Serb Republic territory have terminated concessions for the construction of seven small-sized hydropower plants (HPPs), citing violations of contractual terms.

The move comes as governments across the Balkans crack down on the development of hydroelectric dams, following a wave of protests over their perceived impact on the environment and local communities.

The Republic’s energy ministry confirmed to local business news portal last week that the government had cancelled the concessions for four projects along the River Vrbanja, along with one on the River Sokocnica, another on the River Medljanka and a final dam on the River Ponor. According to the ministry, the developers of these plants had failed to meet obligations set out in their concessions, even 13 years after signing them.

Specifically, the ministry said the operators had not prepared project documentation, resolved land property issues, secured necessary approvals, arranged financing or started construction.

The Balkans are rich in hydropower resources, and the region already draws a significant portion of its electricity from large-scale dams that were constructed decades ago. But faced with soaring demand for power and the need to phase out coal use, governments have looked to develop smaller-scale plants as well.

According to a study by Vienna-based consultancy Fluvius, there were 3,000 mostly small-sized dam projects underway in 2017, around 10% of which were sited in Bosnia. But these plans have drawn criticism from local communities and environmental activists. The Serb Republic’s decision to revoke concessions comes after authorities in Albania began terminating contracts for small-scale HPPs earlier this year.

In the Republic – one of two autonomous regions in Bosnia – hydropower development is mainly supported through the use of feed-in tariffs (FiTs). Tariffs vary depending on the size of projects, with plants less than 1 MW in size receiving 139.6 Bosnian marka (US$80) per MWh of produced power, while those with capacities up to 5 MW get 122.7 marka (US$70.30) per MWh and up to 10 MW, 118.6 marka (US$68).

Overall subsidies towards HPP projects amounted to 6 million euros (US$6.7 million) in 2018, compared with 4 million euros (US$4.5 million) in 2017 and around the same amount in 2016.

Joseph Murphy

Edited by

Joseph Murphy


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