Interview on Bosnia-Herzegovina energy market
Enerdata has just released the new Bosnia-Herzegovina energy report.
Why did you choose to provide a report on Bosnia-Herzegovina ?
The reason is that Bosnia Herzegovina put a foothold in the European Union in 2008. In June 2008, the country signed the Stabilisation and Association Agreement, and has been offered the opportunity to become Member State of the EU, once it would have fulfilled the required conditions. Moreover an Interim Agreement on Trade and Trade-related issues was signed the same day to increase exchanges with EU. Moreover, the country signed an Iterim Agreement on Trade and Trade-related issue which aims to increase exchanges with EU.
What is the impact of the EU integration objective on the country's energy policy ?
EU integration is clearly one of the main political objectives of Bosnia-Herzegovina. The country made a lot of changes in its law and on the structure of its energy sector to be in accordance with EU laws, in particular in the electricity sector. The electricity market has been opened to competition for professional customers since 1 January 2008 (57.5% of the market) and will be opened to all customers on 1st January 2015. An electricity regulator has been established in 2003: the State Electricity Regulator Commission (SERC). The transmission system has been unified; assets and authorities moved into two entity-owned joint stock companies operating at the state level (Transco and ISO). However a lot of work is still to be done, in particular the generation and the distribution assets of the three electricity companies are to be unbundled.
Is the post war reconstruction finished ?
A lot of work has been accomplished to reconstruct the country. Today, the country has just recovered its pre-war situation.
The Bosanski Brod refinery has just restarted production in 2008 after three years of blackout. This refinery, which was one of the leading companies in the 1970s and 1980s, has been seriously damaged during the war and has lost both its suppliers and markets.. After the war, the refinery struggled for years and piled up debts until it finally had to shut down production in 2005. As a result, Bosnia Herzegovina had to import all its oil products to meet its domestic demand. The production restarted through the privatization of the refinery and strong investments made by its new owner, the Russia's state oil giant, Zarubezhneft.
Although electricity production has returned to 90% of its pre-war levels,, the sector needs to receive further investments and to be restructured. As no power plant has been commissioned since 1995, the country needs new capacities. Around 2000 MW of new power plants are to be developed; the most important project being the construction of the Gacko II coal-fired power plant.