China considers US$1.2bn spend at Bosnian coal mine
Friday, Sep 22, 2017
State-owned China Energy Engineering Group (CEEF) is mulling a US$1.2 billion investment in the biggest coal project in the Balkans.

Countries in the region are eager to boost energy security using their untapped coal resources, with 2,800 MW of new coal-fired generation slated to come online within five years. Western development banks have largely steered clear of such projects because of climate change, therefore offering an opportunity for Chinese investors to step in.

According to local press, CEEF is due to make a final decision soon on whether to back a plan to build a 430-MW coal-fired thermal power plant (TPP) and develop the nearby Kamengrad coal mine. They are situated in the Bosniak-Croat Federation, one of two autonomous political entities in Bosnia.

FIPA, the Federation’s foreign investment agency, said in a statement on September 15 that a Chinese delegation had arrived for a fourth meeting to discuss the project. During the meeting, it was agreed that a technical team from China would inspect the site within ten days, after which a final investment deal is expected to be signed.

“Our technical team will visit the site next week and explore the quality of coal and other factors that have to be priced into the final project cost,” the vice president of CEEC, Yu Gang, told Reuters. The executive said talks were under way with private Bosnian developer Lager, which holds 30-year concession rights to the Kamengrad pit, located in Sanski Most in northeastern Bosnia.

The mine contains 115 million tonnes of proven and a further 400 million tonnes in probable coal reserves. Under the proposed deal, CEEC would fund virtually the entire project.

Countries in the Balkans have looked to their widely available supplies of coal as a cheap means of expanding electricity output. The region is too reliant on hydroelectric power, which has caused problems in recent months because of droughts. In Bosnia, hydroelectric dams account for around half of the generation.

The government listed the construction of the coal-fuelled TPP in Sanski Most as a strategic priority last year.

Chinese investors are involved at a number of energy projects in Bosnia and the wider Balkans area. Talks are under way with China Exim Bank and SINOSURE on funding for a 350-MW coal-fired TPP at Banovici, due online in 2021. In Republika Srpska, Bosnia’s other political entity, a joint venture was formed in July between local authorities and China Poly Group to build a similar 300-MW plant at Gacko.

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