Republika Srpska, exclusive: Italian deal in the Balkans for green energy, Drina HPPs project, the analysis of the concessions

Published on 8. January 2014., SEE Energy News

The “Middle Drina” project, worth 665 MEUR which was signed by Republika Srpska, Serbia and Italy on the joint construction of three hydroelectric power plants on the river Drina, might leave a long-term negative consequences for the energy sector of Republika Srpska and might endanger the fulfillment of the obligations of Bosnia and Herzegovina under of the European Union Directive 2009/28/EC. Beside the concessions for the new hydro power plants Italians will take over from RS the energy from existing hydropower plants of total installed capacity of 449 MW, namely an annual production of 1241 GWh.

In the documents related to preliminary agreement on strategic partnership in the “Middle Drina” implementation and several letters of the Ministry of Industry, Energy and Mining it has been clearly indicated that Republika Srpska, and thus Bosnia and Herzegovina gave up all rights on the renewable energy sources in favor of the state of Italy.

The essence of the agreement with Italy is that RS and BiH recognize that all the energy produced in the new future power plants will be considered as it is produced in Italy, and will be counted as an achievement of the Italy national target in order to fulfill its obligations under EU directives. The problem is that such obligations also stand in front of the RS and BiH.

All electricity produced in the joint, but also in some hydropower plants already built about what the public has not been informed until now, will be counted as Italian national goal in accordance with commitments to the EU (Directive 2009/28/EC).

According this Directive, European Union needs to produce 20 percent of the electricity from the renewable resources by 2020th and all countries have certain obligations how to achieve this.

Same obligation also has Republika Srpska, namely BiH.

Besides, BiH needs to ensure that by 2020th as many as 40 percent of energy would be produced from renewable sources (hydro, wind or solar power plants).

BiH does not complete it even now, and by giving approval that the electricity produced in our hydro power plants to be calculated as the Italian share, the relationship will be even worse and will be so in the next 15 years.

The ratio of renewable and non-renewable energy will be even worse in the coming years in favor of “dirty” energy, because apart from hydropower plants on the Drina, the government has agreed to give all the energy in an additional nine small hydro power plants in BiH to the Italians, claims RS local media reports.
In addition, during the same period, while rent hydro power plants, two large power plants in RS will be put into operation – Ugljevik 3 (Comsar Energy) 300MW and TPP Stanari (EFT).

According to the preliminary calculations, in order to fulfill the EU requirements, BiH must build 1.300 MW of new capacities by 2020th, of which only RS 600 MW. Instead, RS will give 449 MW of renewable energy to the Italians.

The natural wealth of 12.2 of profit and management rights

Preliminary agreement on strategic partnership on the project “Middle Drina,” which was signed by the Power Utility Companies of Republika Srpska, Serbia and the SECI Energia Italy, provides the joint company establishment in which SECI Italy would have a 51 percent of stake, and Serbia and RS of 24.5 percent.

Republika Srpska agreed to leave a half of their share to BiH Federation in additional political agreement.

So a 12.25 percent of capital remains to RS in the newly formed company, which means that it will have the right to manage and participate in the income distribution in the same proportion. In return it gives its energy resources and of course bears the consequences that affect environment, flora and fauna, which logically follow the construction of hydropower facilities in the sinking land.

With the new ones RS also gives the existing HPP!

It is very interesting that Republika Srpska accepts, apart the hydropower plants that will build together on Drina, to give also several smaller hydro power plants already built to the Italians, and whose energy is also counted as achievement of Italian national target.

In the letter of RS Ministry of Industry, Energy and Mining, states that the power anticoincidence in produced energy has been made between the Statement of the Council of Ministers and List of projects.

Minister Zeljko Kovacevic explains that the difference has been made “due to constant changes about project reconciliation between Republika Srpska, Serbia and Italy.”

“In addition, the Republic of Italy additionally reduced the overall projects strength for which it may achieve right on stimulus, which again has resulted in projects correction”, states in the letter, which is in our possession.

The Ministry has amended the list with some hydropower plants already built, whose concessionaires, states, also signed a contract with the Italian partner.

Besides HPP Middle Drina (Rogacica and Tegare) with power of 117.5 MW, Italy will also take electricity from hydro-power plants from system Gornji horizonti (HPP Dabar, HPP Nevesinje and HPP Bileca) of total power of 250 MW, then HPP Ulog on the Neretva of 35 MW, and of nine small hydro power plants in the east of RS. These are two small HPPs on the Praca River in the municipality Rogatica, one small HPP on the Jabusnica River, Foca, two small HPP on the Sutjeska, one SHPP on the Bregava River in Berkovici and three small hydro power plants on the river Cehotina in Foca. Altogether has a total installed capacity of 46.5 MW.

According to the amended list, Italians will take over from RS the energy from hydropower plants of total installed capacity of 449 MW, namely an annual production of 1241 GWh.

Source; Serbia Energy See desk/RS media Capital