Member Article

TheSarajevo Business Forum2016(SBF) was, among hosting a number of lectures and discussions, a platform for one of the largest post-war investments in the energy sector in Bosnia & Herzegovina (BiH). The reason for this can be found in the latest reports that an agreement was reached for the EUR 722 million construction of Thermal Power Plant Tuzla's Block 7 betweenElektroprivreda BiHand theChina Gezhouba Group Corporation, with the official MoU signing taking place on the first day of the SBF 2016. The project financier for the deal in question will be theExport Import Bank of China(EXIM), and the repayment period – together with a five-year grace period, is reported to be 15 years.

A number of analysts have weighed in on the issue, many of whom are in agreement that this is a good deal for BiH, especially when taking into consideration the heavy involvement of Chinese companies worldwide in the construction of energy infrastructure. The Prime Minister of BiH further remarked that the agreement with China Gezhouba Group Corporation represents the beginning of a long investment cycle with China, which is anticipated to help the overall economic development of the country through a higher employment rate and better global business connectedness. On a more specific level, the upgrade of the Tuzla Thermal Power Plant is expected to increase the competitiveness of BiH electricity on the European market, while at the same time provide a significant number of job openings for miners in Tuzla for years to come.

Looking at the timeline of the project, those on the optimistic side hope for the preconditions to be met by the end of 2016, with the prospect of the first Chinese workers then arriving in Tuzla during spring of next year to begin the process of construction.