Chinese Group Approved for Bosnia Power Plant

The parliament of Bosnia's autonomous Bosniak-Croat Federation approved a Chinese consortium on Thursday as the preferred bidder to build a 450 megawatt coal-fired power generation unit worth 785.6 million euro ($1.06 billion).

The consortium, which includes China Gezhouba Group and Guandong Electric Power Design, was the only valid bidder after Hitachi (HTHIY) pulled out of the race. [ID: nL6N0NE3E0]

The project at the Tuzla power plant in northern Bosnia is one of the largest investments in the Balkan country's energy infrastructure, which needs upgrading as many of its coal-fired plants are past their prime.

"Now that we have the parliament's agreement, we shall start the negotiations with the final bidder and expect to sign contracts over the next two months," said Elvedin Grabovica, the general manager of Bosnia's top power utility EPBiH.

Grabovica told parliament the new unit at the Tuzla plant would remain fully owned by EPBiH, as well as its capacity and output. EPBiH is majority-owned by the Federation government.

He said the consortium will contract French and German engineering groups Alstom and Siemens (SIEMENS.NS) to provide the equipment. China's Exim bank would finance 85 percent of the project and EPBiH the remaining 15 percent.

The Tuzla plant currently has six units and produces around 3,000 gigawatt-hours (GWh) of electricity a year.

Hitachi withdrew its bid in April citing an unfavourable political situation in Bosnia, after violent protests over unemployment and corruption that started in Tuzla in February and then spread across the Federation. The protests have since died down.

($1 = 0.7418 Euros)

(Reporting by Daria Sito-Sucic; Editing by Zoran Radosavljevic and William Hardy)