Elektroprivreda BiH: It needs to be explained why Aluminij pays a price above market value

SARAJEVO, (Patria) - Public Company Elektroprivreda Bosne i Hercegovine d.d. – Sarajevo supplies electricity to Arcelor Mittal Zenica d.o.o. for 2019 at a contracted, annual price exceeding 50 euros/MWh depending on the achieved consumption diagram.

This was announced by Elektroprivreda BiH, which denies Božo Ljubić's claims that the electricity price for that company is 42 euros/MWh.

Elektroprivreda BiH also points out that Arcelor Mittal Zenica d.o.o. has never bought electricity from other suppliers, but exclusively from JP Elektroprivreda Bosne i Hercegovine d.d. – Sarajevo, regardless of the electricity prices on the market, and that it has fulfilled its obligations in this regard regularly and on time.

Božo Ljubić previously stated that it is absurd for the Government of the Federation of BiH, which owns Elektroprivreda, to provide electricity to the private company Arcelormittal from Zenica for 42 euros per kilowatt-hour, while Aluminij, owned by the Government of FBiH, has to procure the same electricity for 78 euros per kilowatt-hour.

“This fact alone speaks to who is responsible for the situation at Aluminij,” Ljubić concluded.

JP Elektroprivreda BiH announced that they do not have a contract for the supply of electricity to Aluminij d.d. Mostar for 2019.

“The contract that was concluded related to the first half of 2017 with prices: 38 euros/MWh for the first quarter of 2017, or 34 euros/MWh for the second quarter of 2017, which was within the then-prevailing electricity market prices,” Elektroprivreda reminded.

“The previous electricity supplier for Aluminij d.d. Mostar for 2019 is JP Elektroprivreda HZHB d.d., Mostar, and whether the price for electricity is 78 euros/MWh or some other price is a matter of the contractual relationship between these two companies,” Elektroprivreda BiH emphasized.

The company also points out that they conclude electricity supply contracts independently and without consultation with the Government of the Federation of BiH, and at prices that are the result of market conditions for electricity, taking into account their business operations, but also ensuring that all obligations from concluded contracts with partners are met – contracted electricity supply, as well as all payments from partners for delivered electricity.

They remind that the contract with Aluminij d.d. Mostar for the first half of 2017 was successfully implemented on these principles.

Elektroprivreda BiH warns that it is incorrect to link the Government of the Federation of BiH with JP Elektroprivreda BiH when it comes to selling electricity to any company, and especially to put the Government of FBiH and Elektroprivreda BiH in the context of responsibility for supplying Aluminij d.d. Mostar with electricity.

“The question remains that needs an answer. If the price of electricity for 2019 for Aluminij d.d. Mostar is 78 euros/MWh, and market prices for the first half of 2019 for electricity were significantly below these prices, especially for a consumption profile like Aluminij d.d. Mostar, then the situation in which Aluminij d.d. Mostar finds itself, at least when it comes to securing this energy source, should not be surprising,” stated Elektroprivreda BiH in their response.

Finally, they state that the Government of FBiH does not give instructions to any of the power companies, neither Elektroprivreda BiH Sarajevo nor Elektroprivreda HZHB Mostar, for the procurement of electricity to supply its consumers.

“Such authorities are exclusively within the competence of these power companies towards their consumers, taking into account the market principles of their business and fair prices for electricity for the general benefit of the economy in the Federation of BiH,” concluded JP Elektroprivreda BiH.

Aluminij Director Dražen Pandža announced that the Mostar-based factory will be shut down due to huge debts that it can no longer finance.

In the past few years, Aluminij has been operating at a loss, and the company's total debt is almost 400 million marks, of which more than half is debt for consumed electricity.

Aluminij workers took to the streets today, blocking some of the approaches to the city of Mostar.