Bosnia's Banja Luka prepares to build biomass-fired heating plant

SARAJEVO (Bosnia and Herzegovina), May 31 (SeeNews) – Preparatory works for construction of a new, biomass-fired heating plant in Bosnia's Banja Luka are due to begin on June 1, spelling an end to the city's years-long heating issue, the municipal government has said.

The mayor of Banja Luka, Igor Radojicic, signed on Tuesday a deal with the CEO of the local Institute for Energy and Environment (IEE), Dragisa Zecevic, to establish a new company, Eco Heating Plant Banja Luka, paving the way for the plant's construction, the municipal government said in a statement following the ceremony.

The local government said earlier it would be participating with a 15 million marka investment in the project.

"Finally we are getting a reliable and quality heating system in Banja Luka. Reliable, because we will have a heating plant that will be able to function normally. Quality, because we will have heat around the clock at the same price as before", Radojicic said in the statement.

Previously, the city was paying between 10 to 20 million marka ($5.7-11.4 million/5.1-10.2 million euro) to source oil fuel outside of the country. The new plant will mean biomass will be purchased on the local market for 15 to 20 million marka per heating season.

Additionally, Banja Luka will be receiving a profitable new company, Radojicic said.

"We will receive a profitable company that will bring in gains, unlike the current company that has only brought losses", he noted.

District heating company Toplana AD Banja Luka posted a net loss of 4.4 million marka in 2015 befores swinging to a slim profit of 374,500 marka in 2016, according to bourse data.

IEE was chosen to build Banja Luka's new heating plant via a public tender. The new plant should be completed in seven months from the start of construction.

Toplana AD Banja Luka will continue to operate, but with less employees once the new plant comes on stream.

Banja Luka is is the largest city of the Serb Republic, one of the two entities that make up Bosnia and Herzegovina. The other is the Federation.

(1 euro= 1.95583 marka)

Choose your newsletter by Renewables Now. Join for free!