SARAJEVO – The European Bank for Reconstruction and Development (EBRD) has arranged a €46-million financing package to replace a highly polluting coal-fired plant in the central Bosnian town of Zenica, the bank said on Friday.
The new combined gas-fired cogeneration plant, Toplana Zenica, will supply power and heat to Zenica and its largest employer, an ArcelorMittal steel plant, the bank said in a statement.
The ageing steelworks plant, which relies on coal for nearly half of its fuel input, has been the sole external provider of heating in the winter and a major source of pollution in Bosnia's fourth largest city.
ArcelorMittal Zenica will form a joint venture with the city of Zenica and two Finnish companies, KPA Unicon and Finnfund, to implement the project aimed at securing greener and more cost efficient energy production, the statement said.
The EBRD will provide a €28-million loan for the project and Banca Intesa Sanpaolo. a loan of €23-million.
"We are pleased to sign this investment today which combines our strength as a financial institution with our goal to promote the green economy," said Zsuzsanna Hargitai, the EBRD Director for the Western Balkans.
Environmentalist groups have urged European Union's policy makers to take a tougher stance on air pollution from the Western Balkan's coal power plants, blaming the fumes for 3 900 deaths across Europe and health costs of up to €11.5-billion a year.
Earlier this week, the European Union executive in charge of the bloc's enlargement policy criticised the Bosnian authorities for approving a Chinese loan guarantee for a new coal-fired power plant in Tuzla.