Oil Report

Swiss Alpiq bids for $1.1 bln Bosnia power unit

* Investment to be repaid in power

* Project is part of $6.7 bln investment in energy sector

SARAJEVO, Sept 21 (Reuters) - Swiss energy firm Alpiq ALPH.S has filed a bid to construct a new 450 MW block at Bosnia's coal-fired power plant, which is needed to help meet future demand, Bosnia's top utility said on Tuesday.

Elektroprivreda BiH (EPBiH) in March invited investors to express interest for the project, worth an estimated 840 million euros ($1.1 billion) including building, management and use of the power unit located in the northern town of Tuzla [nLDE62T06O].

“The official bid has arrived ten days before the deadline and its details will be made public on October 1,” EPBiH said in a statement.

EPBiH General Manager Amer Jerlagic has said that many utilities contacted EPBIH about the project but Alpiq was the only firm to have formaly expressed interest.

The Tuzla plant has six units with an installed capacity of 715 MW and an annual output of 3,100 gigawatt-hours. It was built in 1978 and urgently needs upgrades to boost output and meet European Union environmental standards.

The project is part of a proposed 10 billion Bosnian marka ($6.7 billion) energy plan from the Muslim-Croat federation, one of the Balkan country’s autonomous halves and home to EPBiH, which is owned 90 percent by the state.

The plan marks the biggest potential investment in the energy sector and would help the region avert outages predicted for coming years, stemming from expected overhauls of major thermal power plants.

For the new block at Tuzla, the federation aims to retain ownership and repay the strategic partner in power. “We will open Alpiq’s bid on Oct. 1 and analyse its conditions and than negotiate the principles of eventual partnership,” EPBiH said.

EPBiH operates two coal-fired power plants with a combined capacity of 1,165 MW and output of 6,661 gigawatt-hours and planned upgrades will boost their capacity to 1,500 MW by 2018. It also runs three hydropower plants.

Bosnia gets 40 percent of its electricity from hydropower plants and the rest from coal-fired plants. Unlike other nations in the region, which rely on imports to cover much of their consumption, Bosnia is able to export power due in part to its hydro power potential. (Reporting by Maja Zuvela; Editing by Vera Eckert)