Europe against Chinese money in Block 7, Elektroprivreda BiH says it is a strategic project

SARAJevo, (Patria) - Commissioner for European Neighbourhood Policy and Enlargement Negotiations Johannes Hahn said in an interview with the Financial Times that he is concerned that some countries are taking very large loans from China to pay for infrastructure, thereby increasing the risk of long-term damage to their fragile economies. According to him, the EU would be a fairer partner.

Hahn's statements suggest concern that Beijing's influence could become an additional source of instability, the newspaper states.

- Perhaps we overestimated Russia and underestimated China, and both should be given their due place - said Hahn.

The Financial Times states that China has been investing significantly in the Balkans recently, which is part of the so-called 16+1 format, which includes 11 EU countries and five non-EU countries - Albania, Bosnia and Herzegovina, North Macedonia, Montenegro, and Serbia.

Hahn says that the European Commission would pay much more attention to issues such as public procurement, competition, and environmental standards when assessing countries' readiness for accession to the Union.

The European Commissioner criticized the EU's decision to finance 80 percent of a bridge in Croatia built by a Chinese company which, according to him, most likely receives subsidies at home.

The Financial Times also states that BiH leaders are preparing to sign a loan guarantee covering 100 percent of a EUR 614 million loan from China Exim Bank to finance a coal-fired power plant.

The Energy Community, which includes EU member states and neighbors, has called on MPs not to approve it, considering it to be illegal state aid under EU law.

Today, Elektroprivreda BiH also issued a statement on the matter, stating that since the Decision on declaring the public interest and proceeding with the preparation and construction of power facilities of FBiH in 2010 until today, all Governments of the Federation of BiH and all convocations of the Parliament of FBiH have continuously supported the Project for the construction of Block 7 – 450 MW at the Tuzla Thermal Power Plant in all its phases, as a Project of strategic interest for the Federation of BiH and which, as such, has no alternative.

"The commitment of the Federation of BiH to the Project for the construction of Block 7-450 MW at the Tuzla Thermal Power Plant stems from the need of the Federation of BiH for: long-term security of electricity supply to meet its own needs, covering future electricity and power deficits that will arise as a result of the imminent shutdown of existing thermal blocks, and ensuring the position of the Federation of BiH in the internal and regional electricity market," the statement said.

By the Decision of the Government of the Federation of BiH, the implementer of activities on the preparation and construction of Block 7 is JP Elektroprivreda BiH d.d.-Sarajevo.

"Activities on the preparation for the construction of Block 7 are being finalized with the adoption of the Decision of the Government of the Federation of BiH on providing a guarantee for Block 7 and the submission of a set of documents for decision-making to the House of Representatives of the Federation of BiH," said Elektroprivreda BiH.

The Decision of the Government of the Federation of BiH on issuing the guarantee was made after the Decision of the Council for State Aid of BiH, based on the valid laws of BiH and made in compliance with the legal acquis of the Energy Community.

Following the appeal of non-governmental organizations requesting an examination of the existence of state aid, Janez Kopač, Director of the Energy Community Secretariat, sent a letter to the MPs of the Parliament of the Federation of BiH, urging them not to adopt the issued guarantee because, as he stated, it "may contain illegal state aid".

"Mr. Kopač, by directly addressing the MPs in Parliament in this way, has exceeded the scope of his competencies, violating the established procedures stipulated by the Energy Community Treaty, to which BiH is a signatory. The expression of support for the Block 7 Project by approving the Decision on issuing the guarantee of the Federation of BiH in the Parliament of FBiH cannot cause any harmful consequences for Bosnia and Herzegovina. Harmful consequences for the Federation of BiH and the state of BiH will be inevitable in case of withdrawal from the Project, which has been declared a public interest and is of crucial importance for the stability of the power sector and the energy independence of the Federation of BiH and the state of BiH," stated Elektroprivreda BiH.