Bosnia adopts long-term energy strategy key to unlocking EU funds

SARAJEVO, Aug 29 (Reuters) - Bosnia’s central government adopted a long-term energy strategy on Wednesday after years of political wrangling between its two regions, paving the way for major funding from the European Union and other investors.

“With this act, we completed the adoption of a package of four most important strategies for economic reforms,” said Bosnia’s Prime Minister Denis Zvizdic.

“We stopped a negative trend that meant we could not apply for energy projects and lost hundreds of millions of euros of investments and grants,” Zvizdic told a news conference.

Bosnia, which aspires to join the EU, has long struggled to adopt strategies for transportation, agriculture, the environment and energy, which are requirements of receiving funding for these sectors from the wealthy bloc.

The country’s two autonomous regions, the Serb Republic and the Federation dominated by Muslim Bosniaks and Croats, failed to harmonise their regional sectoral strategies with the one proposed by the central government.

“This document opens the prospect of development of the energy sector, competition, and unlocks the EU pre-accession funds and grants from the Western Balkans Investment Fund,” said Foreign Trade Minister Mirko Sarovic.

He said the framework strategy for 2018-2035, drafted under EU sponsorship and designed to secure electricity supply and a transition to green energy, anticipated an investment of about 9 billion Bosnian marka ($5.4 billion).

But Bosnia still needs to change its regulations to meet terms set by the European Energy Community, Sarovic added.

Unlike its Balkan neighbours, which rely on imports to meet much of their energy demand, Bosnia is able to export power thanks partly to its hydro power capacity, which provides 40 percent of its electricity. The rest of its power comes from coal-fired plants.

Separately, the Serb Republic and Serbia agreed on Wednesday to jointly build two hydro power plants with a total capacity of 95 megawatts on the Drina river that runs along the border between Bosnia and Serbia, to help diversify their energy mix.

The Prime Minister of the Serb Republic Zeljka Cvijanovic said after a joint session of the two governments in the southeastern Bosnian town of Trebinje that the hydro power plants Foca and Paunci were expected to cost about 200 million euros ($233.2 million).

1$ = 1.670 Bosnian marka Reporting by Daria Sito-Sucic; Editing by Kirsten Donovan