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EU watchdog urges Bosnian lawmakers not to back Chinese energy loan

Staff Writer |
Reuters reported that EU energy watchdog urged a Bosnian regional parliament not to approve a government guarantee for a China Exim Bank loan that is designed to help power utility EPBiH add a new unit at its Tuzla coal-fired power plant.

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The guarantee covers 85 percent of the total value of the contract signed last November for the largest investment in Bosnia's postwar energy infrastructure. EPBiH's shareholders gave it the go-ahead this month but it must still be approved by the parliament of the autonomous Bosniak-Croat Federation.

The Energy Community, an international body established by the EU and eight aspiring member states to extend the bloc's energy policy to would-be members, said the guarantee may constitute illegal state aid and that the vote should be put on hold until the case has been properly investigated.

Head Janez Kopac said in a letter to lawmakers made available to Reuters that "Such approval could lead to lengthy and costly recovery procedures. Besides, the (Energy Community) Secretariat may have to open infringement procedures against Bosnia and Herzegovina.

The move follows a complaint from environmentalist groups opposed to the project. They accused the government of the Bosniak-Croat Federation of trying to rush the deal through the parliament before national and regional elections in Bosnia on Oct. 7.

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