Bosnia and Herzegovina, Chinese loans unavailable for TPP Ugljevik 3 project

, SEE Energy News

Loans from Chinese banks will not be available for the construction of coal-fired thermal power plant Ugljevik 3, confirmed Sunningwell International, a company that should be the contractor for the construction of the plant together with the Chinese National Electric Engineering Company (CNEEC).

In June 2021, Chinese companies Sunningwell International and CNEEC announced that they have signed an agreement on the construction of TPP Ugljevik 3 in the Republic of Srpska (RS), which would be their first project in the European market. The concession for the plant has been granted to Russian Comsar Energy.

However, the construction became uncertain after Chinese President Xi Jinping told the United Nations General Assembly in September 2021 that China would no longer build new coal-fired energy projects, both home and abroad. Sunningwell International said that they are now looking for alternative sources of financing for TPP Ugljevik 3.

In March 2011, Government of RS has approved a letter of intent submitted by Comsar Energy Limited regarding construction of second unit in TPP Ugljevik. The investor was selected based on unsolicited bid, without publishing public invitation. TPP Ugljevik 3 will have two 300 MW units and overall cost of the project is estimated at 750 million euros.

The joint venture agreement for construction of TPP Ugljevik 3 was signed in July 2011 by the RS Government and Comsar Energy. Comsar Energy is obliged to invest 90 % of the funds, while the coalmine and TPP (RiTE) Ugljevik should invest 10 % of the necessary funds. The government will hold 10 % stake in the joint venture company, by investing the land and existing infrastructure at the site of TPP Ugljevik, while CE will own 90 % stake. TPP Ugljevik 3 would export its entire output to foreign markets and it will not be competitor to local power utility ERS. The construction of the plant has not started yet.

In 2018, Russian company asked RS Government to extend the concession granted for the construction of TPP Ugljevik 3 for an additional 15
year or the company will give up the investment. The request includes the extension of the concession period from 30 to 45 years, because the current concession period of 30 years is deemed unprofitable due to lower electricity prices. At the same time, Comsar Energy requested to reduce the power output of the future plant from 600 to 350 MW. However, in early 2020, Comsar Energy requested that the installed capacity should be increased to 700 MW.

In early 2021, RS Government once again met the request of Comsar Energy and extended the deadline for the construction and usage of coalfired thermal power plant Ugljevik 3 to 44 years. Previously, Comsar Energy requested for its concession to be extended from 30 to 45 years.