Memorandum of Understanding Signed on Financing the Construction of Block 7

The Government of the Federation of BiH and the Export-Import Bank of China (EximBank) have concluded a Memorandum of Understanding on financing the construction of Block 7-450 MW Project at the Tuzla Thermal Power Plant, it was announced from JP Elektroprivreda BiH, reports the BiH news agency Patria.

The Memorandum of Understanding was signed at the Third Summit of Heads of Government of the People's Republic of China and Central and Eastern European Countries, held on December 16 and 17, 2014, in Belgrade, by Ante Krajina, Federal Minister of Finance, and Li Ruogu, Governor of Exim Bank. The signing ceremony was attended by Elvedin Grabovica, General Director of Elektroprivreda BiH, and Amil Kamenica, Executive Director for Capital Investments.

The Memorandum of Understanding represents a continuation of activities undertaken by the Government of FBiH aimed at securing credit for the construction of Block 7 at the Tuzla Thermal Power Plant and forms the basis for accelerating the approval process for the loan application, which JP Elektroprivreda BiH submitted to Exim Bank for the amount of 667.8 million euros, representing 85% of the value of the Contract for the construction of Block 7. The loan was requested within the funds allocated by the Chinese Government for Central and Eastern European countries.

Block 7 at the Tuzla Thermal Power Plant is a high-priority implementation project supported by the Council of Ministers of BiH, playing a key role in the development of BiH's power sector, electricity production, and enhancing economic and trade cooperation between the People's Republic of China and BiH, as stated in the Memorandum.

Exim Bank is currently conducting an assessment of the project and the loan application, for which the Government of FBiH is the guarantor. In the coming period, a joint working group, the formation of which is foreseen by the signed Memorandum, will work on harmonizing the details of the loan agreement.

The construction of Block 7 will commence after the Government of FBiH and the Parliament of BiH give their consent to the loan agreement.