Bosnia and Herzegovina strengthened its position as a regional electricity exporter during the first half of 2026, supported by stronger hydropower production and continued growth in renewable generation. The country produced 7.44 TWh of electricity, representing a 3.5% increase compared with the same period a year earlier. Domestic electricity consumption remained stable at approximately 6.15 TWh, while hydropower output increased significantly by 32.4% to 3.13 TWh. Generation from transmission-connected wind and solar projects also continued its upward trend, rising 16.1% to 0.64 TWh. As a result, Bosnia and Herzegovina achieved a net export surplus of 1.44 TWh, up 28.6%, reinforcing its role as one of Southeast Europe’s important electricity suppliers.
However, the sector’s financial performance presents a more complicated picture. Thermal power generation declined by 16.9% to 3.07 TWh due to ongoing coal supply challenges, ageing infrastructure and reduced availability of several generating units. Despite exporting higher electricity volumes, Bosnia and Herzegovina recorded a 16.2% decline in export revenues to EUR 168 million, while the electricity trade surplus dropped to only EUR 23 million. The results demonstrate that increased physical exports do not necessarily translate into stronger financial performance, as electricity prices, hydrological conditions, generation costs and the need to replace unavailable thermal capacity continue to shape sector profitability.
The difficulties at the Ugljevik thermal power plant highlight the wider structural problems affecting Bosnia and Herzegovina’s coal-based electricity system. Shortly after completing a 60-day emergency overhaul, the plant was forced into another shutdown due to poor coal quality and unresolved technical issues. The associated mine requires approximately 35 haul trucks for normal operations, but only around 20 are currently available, with many maintained through the reuse of components from other vehicles. Analysts estimate that the plant needs at least 220 MW of generation capacity to avoid losses and around 270 MW to operate profitably, while output before the latest outage had fallen to approximately 160 MW. The financial impact has been significant, with RiTE Ugljevik reporting losses of around EUR 14 million in 2025 and an additional EUR 18 million in the first quarter of 2026.
The challenges facing the sector extend beyond individual power plants. Elektroprivreda Bosne i Hercegovine (EPBiH) continues to face growing financial pressure from ageing coal assets, weak mine performance and regulated electricity prices that remain below the real cost of production. Since 2024, the utility has invested approximately EUR 92 million in thermal facilities, following EUR 72 million invested between 2015 and 2023. A financial review also revised the company’s inherited 2023 loss from EUR 28.2 million to EUR 169.5 million, while coal mines within the group accumulated combined losses of around EUR 540 million. Declining coal availability, rising operating costs and increased exposure to electricity market purchases are reducing the financial resources available for future energy transition investments.
Borrowing conditions further demonstrate the market’s concerns about the financial sustainability of coal-based generation. RiTE Gacko secured an EUR 11.3 million state-guaranteed loan with a fixed interest rate of 6.9% and a processing fee of 2.97%, equal to approximately EUR 330,000. Although the state guarantee lowered the lender’s credit risk, the relatively high financing cost reflects continued concerns over governance, operational reliability and execution risks within the coal power sector.
At the same time, Bosnia and Herzegovina is developing opportunities for cleaner energy investment. The Development Bank of the Federation of Bosnia and Herzegovina has launched a EUR 7.9 million green financing programme for small and medium-sized enterprises, offering loans with maturities of up to 10 years, a fixed interest rate of 2.5% and a 0.5% processing fee. Renewable energy generation is expanding, and favourable hydrological conditions continue to strengthen the country’s export potential. However, the gradual introduction of the Carbon Border Adjustment Mechanism (CBAM) in the European Union is expected to increase pressure on carbon-intensive electricity exports unless producers can demonstrate lower emissions intensity and clearer electricity origin tracking.
Bosnia and Herzegovina’s future energy strategy will depend on balancing system reliability with long-term decarbonisation goals. The country needs two parallel programmes. The first should focus on the operational recovery of coal mines and thermal power plants, including transparent decisions on which facilities justify further investment and which should move toward retirement. The second must establish a credible pipeline of renewable energy projects covering wind, solar, hydropower modernisation, battery storage and grid expansion.
Maintaining reliable electricity supply during the transition will require careful coordination between these two approaches. Without stabilising existing generation assets, Bosnia and Herzegovina risks facing reliability challenges before replacement capacity is available. However, delaying investment in modern low-carbon infrastructure would increase dependence on ageing facilities whose maintenance costs, operational risks and carbon-related liabilities are becoming increasingly difficult to justify economically.
