Bosnia and Herzegovina – Federal Republic of Germany: EUR 120 Million Financial Cooperation Agreement Signed for 2009



Deputy Chairman of the Council of Ministers and Minister of Finance and Treasury Drgan Vrankić and Ambassador of the Federal Republic of Germany in B-H Joachim Schmidt signed in Sarajevo today an Agreement between Bosnia and Herzegovina and the Federal Republic of Germany on Financial Cooperation for 2009, under which B-H was approved a Loan in amount to EUR 120 million within the state development cooperation. Under the Energy Sector Development Programme IV, the projects to be financed out from the Loan proceeds are the Vrilo Hydro-Power Plant Project (EUR 70.000.000) and Crijevna Hydro Power Plant Project III (EUR 50.000.000).

The “Vrilo” Project is closely connected to the Mesihovina Wind Mill, the power generated from which is used to fill the accumulation not needed in the grid. In cases of maximum burden or absence of wind, the power-plant would serve as an additional or substitute source of power, which increases considerably the safety of power supply, stated Minister Vrankić, adding that the second Project refers to development of “Crijevna III” Hydro Power Plant on the Bosna River, of MW 13.8 capacity, and it includes building of appropriate side embankment. The purpose of the Project is development of renewable sources of energy, which will contribute to sustainable economic growth in B-H, and that includes global environment protection concerns.

Minister Vrankić thanked to the Government of the Federal Republic of Germany for its support to Bosnia and Herzegovina, underlining that we were offered especially concessive conditions for economic development and social programmes. With the Agreement signed today, the total financial support to B-H by the Federal Republic of Germany exceeds EUR 400 million, said Minister Vrankić.

Ambassador Schmidt said that the Federal Republic of Germany undertakes measures to support infrastructure and economic potentials of B-H, with a special attention paid to environment protection.

-        Investment into ecologically harmless projects, that are renewable and long–term usable, includes certainly investments into hydro-potentials, which is an ultra modern and ecologically harmless source of energy. An investment like this bears a multiply importance for energy safety, stability of waste material production, economic boost, job creation and financial growth.

He also pointed at the increasing investment of the Government of the Federal Republic of Germany, growing from EUR 35 million in 2007 and EUR 56 million in 2008, to EUR 120 million in 2009.

Loan terms and conditions for both Projects will be defined in a special agreement with the German Credit Bank for Reconstruction and Development (KfW). Head of KfW Office in B-H Stephan Leudesdorff attended today’s signing of the Agreement.

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