Page 90 - SE Outlook Regions 2024

5.2.4 Major Sectors & Companies
Bosnia's economy relies mainly on electricity generation, mining and
the processing sector.
Tourism is becoming increasingly important for Bosnia’s economy and is attracting attention by international institutions and investors. In the first ten months of 2023, the tourist arrivals increased by 18.7% y/y, mainly thanks to foreign visitors whose number increased by an impressive 31.8% y/y to 802,982.
At the end of 2022, Bosna Bank International (BBI) and USAID joined forces to support the development of local tourism, providing funds to SMEs. The cooperation with USAID aims to secure easier access to financing to SMEs working in the tourism industry and will help them increase revenues and open new jobs through 2023 and the following years.
Bosnia is the sole electricity exporter in the Balkans. Traditionally, the country exports about 25% of its electricity, which is mainly produced by local coal-fired and hydropower plants. Two thirds of the exports are to Croatia, Serbia and Slovenia. However, in 2023 the exports slowed down due to increased domestic consumption. As the country will be unable to invest quickly in new generation facilities, in 2024 exports could fall further.
At the same time, one significant project for increasing Bosnia’s electricity production capacity – the Tuzla 7 coal-fired unit – will most likely be scrapped or the procedure will restart from scratch as the Federation’s government mulled ending the contract with a Chinese consortium between China Gezhouba Group Company Ltd. and China Energy Engineering Group Guangdong Electric Power Desing Institute Co. Ltd. on its construction.
On the other hand, China’s AVIC – China National Aero-Technology International Engineering Corporation will participate in the construction of the Bileca hydropower plant (HPP) in Bosnia & Herzegovina’s Republika Srpska, under a memorandum of understanding signed with the entity’s Energy and Mining Minister Petar Djokic. The hydropower plant will be located in Bileca and will have an annual output of around 121.6 GWh.
The construction sector in Bosnia was unable to recover in 2023 after the downward trend in the previous year. In the first nine months of 2023, construction output fell by 0.2% y/y, according to statistics office data. Civil engineering has been decreasing, by 0.9% y/y in January-September, but building construction rose by 0.8% y/y.
Looking ahead, Bosnia and Montenegro have agreed to start the construction of a bridge over the Tara river connecting the two countries at the Scepan Polje location. The two countries have sent a joint request for grants to the World Bank and the European Bank for Reconstruction and Development in order to finance the project.
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