Bosnia and Herzegovina: Last years’ termination of 22 concession agreements

, SEE Energy News

Republic of Srpska (RS) terminated a total of 22 concession agreements in 2020 most of which are related to the construction of small hydropower plants (SHPP).

The agreements were most often terminated due to non-fulfillment or breach of contractual obligations by the concessionaire or due to exhausted financial possibilities of the concessionaire for the completion of the concession project.

The report of the RS Concessions Commission shows that contracts for SHPPs are often not respected, and as many as half of them are annexed. About 50 % of concession agreements concluded for the purpose of construction and operation of small hydropower plants from the moment of conclusion until the end of last year, underwent changes in terms of concession fee, length of phases of construction, deadlines for the completion of construction and other changes.

Also, a number of concession agreements were terminated, either unilaterally by the RS Government or by mutual agreement, because it was noticed that they did not provide satisfactory realization in previous years, compared to economic feasibility studies and concession projects. The largest number of concessions from the mentioned contracts was awarded in 2006.

The report states that, out of 73 active projects for the construction and operation of small hydro power plants by the end of 2020, 29 SHPPs have been put into commercial operation, while 11 facilities are in the construction phase. Since 2004, when the first SHPP concession agreement was concluded, until the end of last year, a total of 62 contracts have been terminated.

The Commission reiterates the need for a comprehensive analysis of the implementation of the concession agreement for the construction and operation of small hydropower plants, and the termination of those agreements where the concessionaires, without good reason, did not implement the essential provisions of the agreement.