SARAJEVO (Bosnia and Herzegovina), November 26 (SeeNews) – Bosnia's government said it has approved the borrowing of 15 million euro ($16.5 million) from German development bank KfW to finance the modernisation of the Capljina hydro power plant (HPP).
The draft agreement for taking out the loan will be now submitted to Bosnia's collective tripartite presidency for approval, the Council of Ministers said in a statement on Friday.
The loan will mature in 15 years, including a five-year grace period.
The project aims to extend the lifespan of the pumped-storage HPP Capljina by upgrading and replacing its 40-year old equipment. The upgrade is expected to increase Capljina's electricity output and widen its capabilities to provide additional services to the power supply systems of Bosnia and neighbouring Serbia and Croatia.
On behalf of Bosnia, the KfW loan agreement will be signed by the state-level finance ministry as well as by the finance ministry of Bosnia's Federation entity and its power utility Elektroprivreda HZHB, which manages the Capljina plant, the statement said.
The 420 megawatt Capljina plant is located on the Trebisnjica river, in the Federation, one of Bosnia's two constituent entities. The other entity is the Serb Republic.