Parliament Adopts 130 Million Credit Agreement, with Approval of Committee for Economic and Development Policy, Finance and Budget of FBiH Parliament’s House of Peoples

On May 15, 2014, the Committee on economic and development policy, finance and budget of the House of Peoples of the Federation of Bosnia and Herzegovina took under parliamentary consideration the proposals of decisions on credit agreements between the Federation of Bosnia and Herzegovina and the KfW Development Bank, for the purpose of funding two projects. The proposals were adopted today, on June 16, 2014, during the session of the House of Peoples of the FBiH Parliament.

The agenda for today’s continued session from the beginning of June, contained two proposals for decisions on debt agreements for projects concerning building two hydropower plants in the Federation, as follows:

– Proposal of the decision on debt agreement pursuant to the Agreement on loan and project between the (German) KfW development bank, Bosnia and Herzegovina, Federation of Bosnia and Herzegovina and the JP Elektroprivreda BiH d.d. Sarajevo, for implementing the project of building the Vrilo pumped-storage hydropower plant, and

– Proposal of the decision on debt agreement pursuant to the Agreement on loan and project between the (German) KfW development bank, Bosnia and Herzegovina, Federation of Bosnia and Herzegovina and the JP Elektroprivreda BiH d.d. Sarajevo, for implementing the project of building the Janji?i hydropower plant.

Both proposals were adopted, with the debt amounting to 130 million EUR (the costs of building the Vrilo and Janji?i hydropower plants are 100 million EUR and 30 million EUR, respectively). The credit agreements, with the duration of 15 years and a 4-year grace period, include interest rates based on actual expenses of refinancing, of the KfW Development Bank on the capital market (based on the Euro).

The Federal Ministry of Finance deemed the debtors credit-worthy. Feasibility studies showed that projects are feasible ecologically, technically, economically and financially. The feasibility study for the project of building the pumped-storage hydropower plant Vrilo set the projected deadline to 20-25 years, and 8 years for building the Janji?i hydropower plant.