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Chinese funders pull out of
Bosnia’s Ugljevik III power project
CHINA POLISH-OWNED Sunningwell International ongoing, and there have been numerous neg-
Limited has said that Chinese bank loans will ative comments on the environmental impact
not be available to fund the 700 MW Ugljevik assessment for this project. We appeal to the
III coal power plant in Bosnia and Herzegovina. Government of Republika Srpska to realistically
The admission by the project developer consider all the negative consequences of the
means that the EPC contractor, China National project and refuse to issue any permits, because
Electric Engineering Company (CNEEC), is this investment is absolutely unclear, uncertain
now unlikely to begin building the plant. and finally very harmful for Republika Srpska
The news comes after China pledged to not entity and the country itself,” said Majda Ibrak-
build new coal-fired power plants abroad at both ović from Center for Environment in Republika
the UN General Assembly in September and the Srpska.
EU-China Climate Dialogue in October 2021. “The decision by Chinese banks to no longer
Sunningwell’s statement was issued in provide financing for the Ugljevik III project
response to an article in The Diplomat by Just demonstrates China’s rethinking of alternatives
Finance International, questioning how Chi- to coal for the region: since 2014 China has sin-
na’s commitment would be put into practice in glehandedly provided debt financing for new
reality. coal projects in the Balkans that OECD finan-
The project has been plagued by problems ciers consistently walked away from. It remains
over the past 10 years. A concession to build and to be seen whether China’s 2021 pledge to end
operate the plant was issued by the Republika its overseas coal project is serious – especially
Srpska authorities in 2013 to Comsar Energy, as Chinese state-owned enterprise (SOE)
owned by Russian billionaire Rashid Sardarov. CNEEC, an EPC contractor for the project, and
But the project has progressed slowly, with its other SOEs continue to pursue problematic
environmental permits being cancelled twice, in coal projects in Southeast Europe and glob-
2017 and 2019, following legal complaints by the ally,” said Wawa Wang, director of Just Finance
Center for Environment from Banja Luka being International.
upheld. “Chinese SOEs must exit these planned coal
Despite Comsar’s failure to build the plant, in projects for its 2021 pledge to have true climate
2020 the Republika Srpska authorities allowed saving impacts,” added Wang.
the project to move ahead with a capacity “This project has been plagued with legal vio-
increase of 100 MW, and in January 2021 they lations right from the outset and the Republika
increased the concession period to 44 years. Srpska Concession Commission has confirmed
This was followed by an announcement in that the concession-holder hasn’t fulfilled its
June 2021 that an engineering, procurement obligations. It’s time to end this charade once
and construction contract (EPC) for the project and for all, admit the plant won’t be built, and
had been signed by Sunningwell and the project’s turn towards sustainable forms of renewable
EPC contractor, China National Electric Engi- energy,” said Pippa Gallop of CEE Bankwatch
neering Company (CNEEC). Network.
“Obtaining permits for Ugljevik 3 is still
P6 www. NEWSBASE .com Week 03 19•January•2022
