Secretariat requests the Parliament of the Federation of Bosnia and Herzegovina to postpone its vote on the Tuzla 7 guarantee

22 February 2019

On its website, the Parliament of the Federation of Bosnia and Herzegovina announces, at its session on 28 February 2019, a vote on the approval of the public guarantee granted in favor of the export-import bank of China for a loan by the latter to the public utility Elektroprivreda BiH d.d. Sarajevo. The loan is required for the construction of Block 7 of the Tuzla lignite power plant project.

The Secretariat is currently investigating the compliance of the guarantee on the Parliament’s agenda with the State aid rules enshrined in the Energy Community Treaty, and the decision by the State Aid Council of Bosnia and Herzegovina of July 2018 which cleared the guarantee. In these investigations, the Ministry of Finance of the Federation of Bosnia and Herzegovina, Elektroprivreda BiH d.d. Sarajevo and the State Aid Council agreed to cooperate with the Secretariat. The State Aid Council, in particular, declared its readiness to revise its earlier decision in case of new facts and evidence. The Secretariat, at this stage, considers it likely that the guarantee constitutes State aid and has asked an independent law firm to verify its preliminary findings. The independent assessment, which the Secretariat intends to publish, is expected by the end of next week.

In this situation, the Secretariat urges the Parliament of the Federation of Bosnia and Herzegovina to postpone its decision as there is a certain probability that such decision would bring the country in a state of non-compliance with Energy Community law, on which the Secretariat would have to follow-up by infringement procedures. The Secretariat, in line with its agreement with the institutions and companies of Bosnia and Herzegovina, commits to support a clear and final decision in line with Energy Community law, which would also restore legal certainty for the project.