Power sector in Bosnia & Herzegovina

An Expert's View about Energy in Bosnia and Herzegovina

Posted on: 28 Sep 2010

Following the post-war reconstruction projects, total electricity production has been restored to near pre-war levels, collections are above 90% of invoiced bills and grid connection is nearly universal.

POWER SECTOR - Bosnia and Herzegovina Sector Report POWER SECTOR IN BOSNIA AND HERZEGOVINA Produced by: Alma Kadunic, Trade and Investment Manager British Embassy Sarajevo June, 2009 Whereas every effort has been made to ensure that the information given herein is accurate, UK Trade & Investment or its sponsoring Departments, the Departments of Trade & Industry and Foreign & Commonwealth Office, accept no responsibility for any errors, omissions or misleading statements in that information and no warranty is given or responsibility is accepted as to the standing of any firm, company or individual mentioned. www.uktradeinvest.gov.uk 1 POWER SECTOR - Bosnia and Herzegovina TABLE OF CONTENTS OVERVIEW 3 OPPORTUNITIES FOR UK COMPANIES 4 INTERNATIONAL FINANCIAL INSTITUTIONS 5 KEY METHODS OF DOING BUISNESS 5 PUBLIC PROCUREMENT 6 EVENTS AND CONTACT LIST 6 MORE DETAILED SECTOR REPORTS 8 www.uktradeinvest.gov.uk 2 POWER SECTOR - Bosnia and Herzegovina OVERVIEW Following the post-war reconstruction projects, total electricity production has been restored to near pre-war levels, collections are above 90% of invoiced bills and grid connection is nearly universal. The country's sources of power are balanced between thermal and hydro (56% and 44% respectively in 2006 or 13749 GWh in total). The available hydro potential is estimated at approximately 7330.5 GWh and 1813 GWh for small HPP with coal reserves of over 4 billion tons. Other renewable energy resources estimated reserves: solar 70.5 mil.GWh/year, wind 900-2000 MW, geothermal 90.2 MWt, and biomass 1 million m3/year. Electricity production in BiH is state controlled with three independent companies (Elektroprivreda BIH, Elektroprivreda RS and Elektroprivreda HZ) involved in generation and distribution. There are also other companies present in the energy market and interested in the construction of new generation facilities (Elektroprivreda Srbije, Russian Inter Rao, EFT Ltd, Norwegian Stratcraft, Intrade doo, Bobar doo). Local governments have embarked on ambitious new plans to modernise their existing capacity and also to build substantial new capacity with the views of putting BiH in a leading position for electricity generation in the region. All three companies, as well as some private sector local and international investors, have announced plans for investments in 32 new power plants (thermal 2.830 MW, hydro 1716 MW and wind 610 MW) in the period from 2006-2012. www.uktradeinvest.gov.uk 3 POWER SECTOR - Bosnia and Herzegovina By 2020 about Euro 279 million is likely to be invested in the development and rehabilitation of the transmission network. The largest part of investment is intended for the 110 kV electricity network. According to IAEA, the energy intensity of the BIH economy in nominal terms is four times higher than the EU - 25. The post-war modernisation of BIH Industrial sites as well as municipal infrastructure offers high potential for energy efficiency Regionally BiH is a modest electricity exporter - BiH utilities sold 12% of total power abroad in 2006. However this position is sensitive due to seasonal fluctuation in hydro conditions and recent growth in domestic demand for power (12% compounded growth rate in last three years). Nevertheless BiH has a significant export potential in energy sector through development of new generation capacities, both renewable and fossil with subsequent positive impact on energy export. Significant sector reforms have already been achieved with the establishment of a Single Transmission Company (Transco) and an Independent System Operator (ISO). Independent regulatory agencies at the state and entity levels are now fully operational and are responsible for licensing and tariff setting activities. Action plans for the restructuring, unbundling and eventual privatisation of the sector have been updated. Following the recent ratification of the Kyoto Protocol, the Government of BiH is set to investigate options for modernising carbon emission reduction arising from energy efficiency investments and the implementation of trading mechanisms (Clean Development Mechanism). The Government priorities for the next three years: ? implementation of the existing projects in the power sector ? completion of works on power distribution networks ? reorganisation of power distribution activities ? improve sector efficiency ? increase the capacity of the grid ? award, development and operation of new capacities in partnership with the private sector ? construction of new thermal plants with strategic developers ? construction of small and medium size hydro power plants with existing power utilities ? development of wind farm projects in south-east OPPORTUNITIES FOR UK COMPANIES Many opportunities exist for UK companies to participate in the continued expansion of this sector, as developers, suppliers or service providers for ? consultancy services IFI-funded projects and local companies ? JI into power plants ? equipment ? transmission network upgrades ? renewable technologies ? heat and electricity production systems www.uktradeinvest.gov.uk 4 POWER SECTOR - Bosnia and Herzegovina UKTI publishes international business opportunities gathered by our network of British Embassies, High Commissions and Consulates Worldwide. These opportunities appear in the Opportunities portlet on the relevant sector and country pages on the UKTI website. The registration to UKTI website, which is straightforward and free, will also give you the possibility to receive alerts when relevant new opportunities are published. INTERNATIONAL FINANCIAL INSTITUTIONS Ongoing IFI-financed projects continue to address problems associated with under- investment in the years following the war and changes in demand patterns. World Bank The WB-lead Power IV project valued at USD 265 million is aimed at developing capacities in BiH to ensure compliance with the Energy Community Treaty that BiH ratified in October 2005. EBRD The Bank will continue to support best practices for the award, development and operation of new capacity in partnership with the private sector. The investment projects currently under consideration: construction of new thermal power plant in Stanari, construction of small and medium size hydro-power plants with existing power companies and development of a wind farm project. Further investments will be considered in distribution sector on public but non-sovereign basis in order to improve sector efficiency and in power transmission in order to increase the capacity of the grid. Other donors actively supporting the reform and development of the sector are: EIB, EC, USAID. KEY METHODS OF DOING BUSINESS In order to launch products/services on the Bosnian market, British companies should first identify appropriate local business partners who would be interested in distributing the companies' products in Bosnia and Herzegovina. In some cases direct contact with potential end users may be considered. The British Embassy Trade and Investment Team can help in identifying relevant potential partners/end-users through UK Trade & Investment chargeable services, which are now delivered exclusively on-line (www.ukti.gov.uk). The most popular payment methods are prepayment and cash against documents and Letter of Credit. When considering doing business in Bosnia and Herzegovina, it is essential to obtain legal, financial and taxation advice. A useful contact list of lawyers and other relevant professional bodies in the country is available from Trade and Investment Team in Sarajevo. www.uktradeinvest.gov.uk 5 POWER SECTOR - Bosnia and Herzegovina PUBLIC PROCUREMENT Public procurement rules apply to a number of companies in the power sector. The Bosnian Public Procurement Act passed in 2004 is harmonised with the EU legislation on public procurement. The act regulates governmental and public orders for goods, services and construction projects. The purchase of goods or services and construction projects fall into the category of public procurement if the values exceed a certain minimum as defined in the act. The Act requires governmental bodies, state-owned companies and other public bodies, including public utilities having a certain natural monopoly, to order products for the same project at the same time and if possible from the same supplier. The Act explicitly forbids the division of orders to avoid the application of the Act. Public procurement is usually made in the form of open tenders. Calls for tenders are published in The Official Gazettes and are also available on the Internet (www.javnenabavke.ba). The complex procedures and especially the short deadlines, and also the language barrier of the whole procedure provide some advantage for local companies including local representatives of foreign manufacturers. Selected major calls for tender are regularly submitted to the UK Trade & Investment Business Opportunities service by the Trade and Investment Team Sarajevo for publication on the www.ukti.gov.uk website. EVENTS ZEPS (Zenica General Trade Show) 6-11 October 2009 Further details are available from: DD Poslovni sistem RMK Ku?ukovi?i 2/VI 72000 Zenica Tel: 00387 32 247 774 or 247 770 Webiste: www.zeps.com CONTACT LISTS Competent Government Authorities Department for naural resources, energy and environment MINISTRY OF FOREIGN TRADE AND ECONOMIC RELATIONS Musala 9 71 000 Sarajevo Tel: +387 33 206 141 Fax: +387 33 206 141 Email: vetcon@bih.net.ba www.uktradeinvest.gov.uk 6 POWER SECTOR - Bosnia and Herzegovina MINISTRY OF ECONOMY, ENERGY AND MINING OF RS Vuka Karadzica 4 78 000 Banja Luka Tel: + 387 51 331 710 Fax: + 387 51 331 702 Email: mer@mer.vladars.net Web: www.vladars.net MINISTRY OF ENERGY, MINING AND INDUSTRY OF FBiH Alipasina 41 71 000 Sarajevo Tel: + 387 33 663 779 or 36 513 800 Fax: + 387 33 220 619 Email: fmeri-sa@bih.net.ba Web: www.fbihvlada.gov.ba Regulating Agencies INDEPENDENT SYSTEM OPERATOR OF BIH Hamdije Cemerlica II/5 71 000 Sarajevo Tel: + 387 33 720 400 Fax: + 387 33 720 494 Email: info@nosbih.ba Web: www.nosbih.ba POWER REGULATORY COMMISSION OF BIH Miska Jovanovica 4/II 75 000 Tuzla Tel: + 387 35 302 070 Fax: + 387 35 302 077 Email: info@derk.ba Web: www.derk.ba BIH TRANSMISSION COMPANY Marije Bursac 7a 78 000 Banja Luka Tel: + 387 51 246 500 Fax: + 387 51 246 550 Email: dusan.mijatovic@elprenosbih.ba Web: www.elprenosbih.ba Main power companies JP ELEKTROPRIVREDA HZ H-B dd Mostar Mile Budaka 106 A 88 000 Mostar Tel: + 387 36 335 700 Fax: + 387 36 335 777 www.uktradeinvest.gov.uk 7 POWER SECTOR - Bosnia and Herzegovina Email: ured.gen.dir@ephzhb.ba Web: wwwephzhb.ba JP ELEKTROPRIVREDA BIH DD SARAJEVO Vilsonovo setaliste 15 71 000 Sarajevo Tel: + 387 33 751 000 Fax: + 387 33 751 008 Web: www.elektroprivreda.ba JP ELEKTROPRIVREDA RS Stepe Stepanovica 89 101 Trebinje Tel: + 387 59 277 101 Fax: + 387 59 277 120 Email: www.ers.ba Other Sector Contacts Association of Small Private Hydropower Stations (APEOR) In Trade doo Zmaja od Bosne 44 71 000 Sarajevo Tel: 00387 33 657 205 Fax: 00387 51 657 206 Email: dzenan.malovic@intrade.co.uk Website: www.apeorbih.com.ba MORE DETAILED SECTOR REPORTS Research is critical when considering new markets. UKTI provides market research services which can help UK companies doing business overseas including: ? Overseas Market Introduction Service (OMIS). Bespoke research into potential markets, and support during your visits overseas ? Export Marketing Research Scheme. In-depth and subsidised service administered by the British chambers of Commerce on behalf of UKTI UKTI?s International Trade Advisers can provide you with essential and impartial advice on all aspects of international trade. Every UK region also has dedicated sector specialists who can provide advice tailored to your industry. For new and inexperienced exporters, our Passport to Export process will take you through the mechanics of exporting. An International Trade Adviser will provide professional advice on a range of services, including financial subsidies, export documentation, contacts in overseas markets, overseas visits, translating marketing material, e-commerce, subsidised export training and market research. UKTI publishes international business opportunities gathered by our network of British Embassies, High Commissions and Consulates worldwide. These opportunities appear in the Opportunities portlet on the relevant sector and country pages on the UKTI website. By setting up a profile you can be alerted by email www.uktradeinvest.gov.uk 8 POWER SECTOR - Bosnia and Herzegovina when relevant new opportunities are published. New or updated alert profiles can be set in My Account on the website. For further information contact: Alma Kadunic Trade and Investment Manager British Embassy Sarajevo Petrakijina 11 71 000 Sarajevo Tel: + 387 33 282 237 Fax: + 387 33 282 265 Email: alma.kadunic@fco.gov.uk Web: https://ukinbih.gov.uk www.uktradeinvest.gov.uk 9
Posted: 28 September 2010