The European Investment Bank (EIB) lends EUR 103 million for the rehabilitation of hydropower plants and electric power distribution systems in Bosnia-Herzegovina.

The EIB loan will finance measures leading to a more rational usage of energy through the reduction of losses, improvement of energy efficiency, reducing operation and maintenance costs as well as increasing quality and reliability of power supply of the energy system across the country.

The project consists of the design, supply and installation of facilities in the power distribution system and in eight hydropower plants with a total installed capacity of about 2800 MWe, where it will raise the safety of respective dams.

Bosnia and Herzegovina will be the borrower that will on-lend the EIB funds to the beneficiaries: Republika Srpska and the Federation of Bosnia and Herzegovina.

The promoters are the country's three electric power companies EPRS, EPBiH and EPHZHB, and the Independent System Operator ISO. This is the second EIB loan provided to the energy sector in Bosnia and Herzegovina. In 2000, the Bank granted a loan of EUR 60 million for the rehabilitation of electricity power networks in the country.

The priority of the EIB, the European Union's financing institution, is to contribute to the integration, balanced development and economic and social cohesion of the Member States. Outside the Union, the EIB implements the financial components of agreements concluded under European development aid and cooperation policies.

EIB financing in Bosnia and Herzegovina has reached almost EUR 600 million since 2000, including the above-mentioned loan. EIB lending in the Western Balkans, including Bosnia and Herzegovina, helps the countries of the region to meet EU accession criteria and harmonise with the economic developments of the EU. The Bank has gradually developed lending activities in this region. Since 1995, the EIB has provided loans in the Western Balkans amounting to some EUR 2.2 billion.