Bosnia to Expand Coal-Fired Plant with China Exim Bank Loan

Bosnia will expand a coal-fired power plant with a loan of 668 million euros ($833 million) arranged with the Export-Import (Exim) Bank of China (BACHF) on Wednesday, local media reported.

Top power utility EPBiH plans to build a 450-megawatt unit at its Tuzla power plant, marking the biggest investment in a drive to address the country's creaking energy infrastructure.

Ante Krajina, prime minister of Bosnia's autonomous Bosniak-Croat Federation, signed a memorandum of understanding with visiting Exim Bank Chairman Li Ruogu on the sidelines of a summit in Belgrade between China and 16 central and eastern European states.

"The memorandum means the Federation government is ready to provide sovereign guarantees for the loan which will most likely be denominated in U.S. dollars," Krajina was quoted as saying by Bosnia's Fena news agency. He said the loan terms would be defined soon.

EPBiH has selected a consortium of China Gezhouba Group and China's Guandong Electric Power Design to carry out the project.

Chinese investors are boosting their presence in the Balkans, a potentially lucrative market with good links to the European Union and scope for price rises.

Bosnia generates 40 percent of its power from hydro and the rest from coal, making it one of the few countries in the Balkans able to export electricity.

Reporting by Maja Zuvela