BiH/Republika Srpska: Project TPP “Stanari” problems related to concession land ownership, nothing interferes the construction of TPP claim from EFT

3. September 2014. / SEE Energy News

A construction of thermal power plant “Stanari” in Republika Srpska officially has begun in May 2013th. Thermal power plant with capacity of 300 megawatts, which will annually produce 2,000 gigawatt hours of electricity, builds “EFT” group, headed by one of the most serious electricity retailers in the Balkans, Vuk Hamovic. The construction of the thermal power plant is funded by the China Development Bank, which provided a loan of 350 MEUR. In return, the bank received a company “EFT – Mine and Thermal Power Stanari” and all associated property rights in connection with the company. As stated by the Centre for Investigative Journalism (Cin.ba), the Government of Republika Srpska had to change certain bylaws because of this loan. In this way, the China Development Bank had the opportunity to dispose of the concession contract in the case that “EFT” cannot repay the loan.

“EFT” signed a contract with the Chinese company Dongfang Electric Corporation in May 2010th for construction of thermal power plant and equipment delivery. Thermal power plant “Stanari” is the first power plant built in the former Yugoslavia after thirty years and it is one of the most significant investments in the energy sector. However, many controversies follow this project from the very beginning to the construction of thermal power plants and doubtful possession of the land under which there is lignite worth about 3 billion EUR.

Lignite mine in Stanari was established in 1955th. After the war, as well as most state-owned enterprises, it has got financial problems. The company was transformed into a joint stock company in 2003rd and besides RS Government as the majority owner of shares, also the employees purchased the shares, as well as the Pension and Disability Insurance Fund and Restitution Fund. During 2004th, the mine has run into huge debts and it was decided to seek a strategic partner that will help the mine to solve financial problems. In 2005th, it was established a new joint venture “EFT group – Lignite Mine Stanari”, between AD Lignite Mine “Stanari” and “EFT” group. In the meantime, AD Lignite Mine “Stanari” changed its name into AD Nonmetal Mine “Stanari”. Soon after, it was decided that AD Nonmetal Mine “Stanari” got out of the co-ownership of the joint venture. The reasons were huge losses. In this way, “EFT” group becomes the sole owner of the company.

At this moment there is a legal battle for land in Stanari. Legal representatives of Joint Stock Company Nonmetal Mine “Stanari” have launched a lawsuit against the company “EFT – Mine and Thermal Power Stanari” for 267 acres of land that they took without fees. “EFT” is the owner of the land in Stanari. Below this area there are significant reserves of mineral resources. The company bought a part of the land of the residents, and 267 hectares, which is about half of the total land, they got completely free from previous owner – Joint Stock Company Nonmetal Mine “Stanari”. It is estimated that this land is worth about 24 million dollars and this amount would enable payment of debts of the former AD Nonmetal Mine “Stanari”.

According to the Center for Investigative Reporting, financial documentation of the Joint Stock Company shows that forensic experts reduced the value of the property at least three times. After assessment, the equipment and buildings became the property of the newly formed company “EFT Group – Lignite Mine Stanari”, but the land is not registered in the name of the new owner. Experts in the report indicated that the country is called overburden (earth above the coal), that is affected by technological process of excavation and there is not a land, and therefore it has no value.

Center for Investigative Reporting reveals that the expert witness as overburden also listed the land that is not affected by overburden, since it is located below the restaurant canteen. But the attorney representing AD Nonmetal Mine “Stanari” believes that experts customize findings in favor of EFT. In EFT, said that was a mistake and that the land was left to ex-partner. EFT Representatives consider this a good deal for both sides.

–          About 2 MEUR was invested in the revitalization of the company immediately after entering the mine. We purchased new conveyors, purchased additional equipment, perform construction and other works. “Mine remained without main means of work. They did not have discovered coal reserves, equipment was falling apart, there was no coal processing, the market was shut down, said Stevan Loncar, a representative of EFT, recently for CIN.

InEFT say that they annually produce one million tons of coal, but their plan is the production of 2.5 million tons per year. Of these, the thermal power plant built near the mine will waste 2.3 million tons of coal, and the rest will be sold on the open market.

TPP “Stanari” violates EU limits on pollution?

New coal power plants in countries towards the EU, approved by the Energy Community, risk the breaching of EU limits for harmful emissions if they would be built according to these plans, warned the company for legal advice from the EU. The members of Energy Community will have to comply with the provisions of European legislation on industrial emissions by 2018th, pollution, however, as seems now, the power plant “Kolubara B” in Serbia, “Pljevlja II” in Montenegro, “Tuzla 7”, “Stanari” and “Banovici” in Bosnia and Herzegovina (BiH) will probably break it. Experts say the technology at these plants have to be adapted to the last minute. (Euractiv.rs)

However, despite all the controversies and uncertainties that accompany the entire project in Stanari, “EFT” will soon begin to produce their own electricity in BiH after years of trading. For this it has the support of institutions in Republika Srpska. On site of thermal power plant, whose construction is well under way, are hired more than 900 people, of which more than half of local construction workers. During the biggest activities on the site work 1500-1600 workers. Completion of the new thermal power plant is scheduled for 2016th.

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