Grabovica: I hope parliamentarians are aware of the importance of Block 7

The FBiH Government has sent the Parliament of the Federation of BiH Information on activities to select a project partner for joint investment in the construction of Block 7 (450 MW) at the Tuzla Thermal Power Plant, reports the news agency Patria.

As Elvedin Grabovica, General Director of "Elektroprivreda", told NAP in an interview, he expects approval from the FBiH Parliament as well as the final one, which should be, if everything goes according to plan, at the end of August, after which the contract realization, signing, and preparatory works would begin by the end of the year.

- We cannot specify the timing, but we respect all legal procedures and what the Government has imposed on us, and we expect the Parliament to support us, and we think we will complete the entire procedure by the end of August – says Grabovica, emphasizing that he sincerely hopes that the parliamentarians will recognize the significance of such an investment.

- We must say that this is the last chance to start, because our existing Blocks will start going out of use in 2018, and not a single new one has been built, nor can the existing ones be repaired to extend their lifespan. That is why this, in addition to creating jobs and generating the economy, also ensures the jobs of 3,000 miners from the "Kreka" mine. We have no alternative, and I hope the parliamentarians will recognize that. It is good that we have the support of the miners' union and that most people have recognized the importance of this project – added Grabovica.

On Wednesday, July 23, 2014, the Members of the House of Representatives of the FBiH will be presented with all the activities carried out so far in selecting a project partner, and at the same time, consent will be requested to continue activities until the final selection of a project partner according to the proposed model.

In the first phase of the tender procedure for selecting a project partner, let us recall, 11 companies and consortia were interested in the project of constructing Block 7 of the Tuzla Thermal Power Plant. The final offer was submitted by the Consortium Gezhouba Group Company Limited, China (CGGC) and Gunagdong Electric Power Desing Institute (GEDI), China. Mitsubishi Hitachi Power Systems Ltd. Japan withdrew its offer.

- Block 7 450 MW Tuzla Thermal Power Plant is the most valuable post-war investment in BiH. The realization of the project is of particular importance for the future stability of the power sector, especially due to the necessity of decommissioning the currently active blocks in the Tuzla Thermal Power Plant, the survival and future of the mines, and the economic development of the Federation and the state of Bosnia and Herzegovina – state EP BiH.

According to the principles of project partnership contained in the offer, JP Elektroprivreda BiH is the 100 percent owner of the constructed Block 7 with 100 percent rights to the power and electricity of the Block.

The CGGC and GEDI Consortium is the contractor on a "turnkey" basis. The offered price for the PBS (Preferential Buyer's Credit) option is EUR 785,650,000 (excluding VAT).

The proposed financing model includes 15 percent own contribution from EPBiH and 85 percent credit from EXIM Bank of China, under the most favorable credit model, Preferencial Buyer's Credit.

The consortium will actively participate and assist in applying for and approving the credit from EXIM Bank of China. The offered equipment is from renowned European manufacturers – boiler from Alstom, turbine and generator from Siemens. Otherwise, EPBiH claims, the offered technical solution is fully in line with European technical and environmental standards and harmonized with the Conceptual Design and the environmental permit secured for the construction of Block 7.

- The offered price is at the level of the estimated investment value from 2010, and according to the offer, it amounts to EUR 1.74 million/MW of total capacity. The construction cost of similar and comparable lignite-fired thermal power plants in the region and Europe ranges from EUR 1.55 to 2.42 million (TE Turrow Poland, TE Šoštanj Slovenia, TE Maritsa Iztok Bulgaria, TE Ptolemais V Greece) – it is stated.