Bosnian power utility Elektroprivreda BiH said it has requested a government guarantee for a loan from China's Ex-Im Bank for the construction of a 450 MW unit at the existing Tuzla thermal power plant (TPP).
The finance and energy ministries of Bosnia's Federation are initiating the procedure towards negotiating the loan with Ex-Im Bank and the issuance of the guarantee, EPBiH said in a statement late on Friday.
The net contract price for the unit's construction is 722.35 million euro ($764.6 million). The loan being sought should cover 85% of the cost of the project, while EPBiH is to cover the remaining 15%.
In talks with representatives of the Chinese bank, an agreement has been reached for a loan term of 20 years with a grace period of 5 years and a repayment period of 15 years, EPBiH noted.
In 2014, Bosnia's Federation said it had selected a consortium of China's Gezhouba Group Company Limited and Gunagdong Electric Power Design Institute as the preferred bidder for the construction of Unit 7 at Tuzla coal-fired power plant.
Little progress has been made on the project's implementation to date. However, in November EPBiH said it has signed a framework deal for the construction of the unit with Ex-Im Bank.
According to Bosnian media reports, European Union credit institutions have declined to finance the project as it fails to meet the bloc's strict environmental requirements.
