RES as development opportunity - BiH planning strong increase in capacity and investment in green energy

Analyzes indicate that this investment cycle could have a significant economic effect. Estimates by the International Renewable Energy Agency (IRENA) show that investments in RES could generate around 8,300 new full-time jobs. At the same time, the average annual investment growth is expected to increase by around 4.7 percentage points, with a moderate increase in imports and an average annual GDP growth of about 0.3 percentage points.

Special focus was placed on the development of the prosumer model, i.e. electricity production for households` own needs. Support models have already been defined in the Federation of BiH, according to which households can obtain a grant of up to EUR 3,500, i.e. up to 60 percent of the investment for solar systems with an average power of around 6 kW. The total direct fiscal cost of this measure is estimated at around EUR 102 million.

Nevertheless, indirect fiscal effects are expected to largely neutralize these expenditures. Through the growth of economic activity and tax revenues, in the period 2026-2028 a cumulative increase in public revenues of around EUR 97 million is predicted, whereby the net fiscal cost of the reform would amount to only around five million euros.

Namely, Elektroprivreda BiH plans to build new solar power plants - Gračanica 1 and 2, with a planned capacity of 45 MW with an annual production of more than 66 GWh, whose realization is supported by credit arrangements with the European Bank for Reconstruction and Development.

It is especially important that the use of mining areas and land owned by energy companies for the construction of solar power plants is planned, which further encourages energy transition and conversion of existing resources.

At the same time, the company will continue its investments in coal mines with the aim of maintaining stable production for the needs of thermal power plants. Environmental projects are also planned, including flue gas desulphurization and denitrification plants in the Tuzla and Kakanj thermal power plants, as well as modernization of the existing energy capacities.

The plan also foresees the reorganization of the distribution sector through the establishment of a distribution system operator, in accordance with the legal solutions in force in the Federation of BiH.

When it comes to the Republika Srpska, the focus is increasingly shifting from planning to concrete project implementation. Namely, Elektroprivreda Republika Srpska should soon begin the construction of the solar power plant Trebinje 3 and the wind farm Hrgud, which confirms the continuation of the investment cycle in this entity.

Although institutional projects are progressing, the situation in the private sector is significantly more complex. According to Petrović, the Republika Srpska Concession Commission has awarded more than 1,200 MW of capacity for solar power plants to private investors, but the implementation of those projects is still missing.

On the other hand, Petrovic said, Elektroprivreda RS, through its subsidiaries, already has a developed portfolio of ready-to-build projects, thus maintaining a key role in the energy transition process in this part of the country.

Planned investments in renewable energy sources represent one of the key development opportunities for Bosnia and Herzegovina. Apart from contributing to decarbonisation and alignment with EU policies, this investment cycle could significantly improve energy security, create new jobs and boost the overall economic growth of the country.