EBRD secures greener energy for Bosnian city of Zenica

By Axel  Reiserer

River Bosna, Zenica, Bosnia & Hercegovina

  • EBRD arranges €46 million financing package
  • New combined heat and power plant in Zenica to replace coal-fired plant
  • New joint venture “Toplana Zenica“ formed by ArcelorMittal Zenica, City of Zenica , KPA Unicon (Finland) and Finnfund (Finland) to implement project

Air quality in the Bosnian city of Zenica is set to improve significantly thanks to an investment led by the EBRD in a new local heat and power plant that will no longer rely on heavily polluting coal.

The new combined heat and power (CHP) plant, Toplana Zenica, will supply power to Zenica, the fourth largest city in Bosnia and Herzegovina with a population of over 160,000, and also to its largest employer, the ArcelorMittal steel plant.

The project will be implemented by a joint venture formed by ArcelorMittal Zenica, the City of Zenica, KPA Unicon (Finland) and Finnfund (Finland) and result in major environmental improvements as well as more cost efficient production of energy.  

It is being financed with a €46 million loan package, comprising a €28 million loan for the EBRD’s own account and a loan of up to €18 million provided by Banca Intesa Sanpaolo S.p.A. The EBRD portion includes €23 million from  the Bank and €5 million of concessional financing from the International Cooperation and Development Fund (TaiwanICDF).

The steelworks’ CHP plant is Zenica’s sole external provider of heating in the winter. It relies on coal for nearly half its fuel input. It is a major source of SO2 pollution in the city, aggravated by the city’s weather conditions and geographical location in a natural basin.

In addition, the outdated equipment suffers frequent disruptions. The plant’s existing coal boilers will now be replaced by modern EU-compliant gas-fired boilers and an old steam-driven blower will be replaced by a modern high-efficiency electric blower. This will result in a cost-effective and efficient use of resources as the new steam boilers will run exclusively on recovery gases from the steelmaking plant, while coal will be phased out completely.

Zsuzsanna Hargitai, EBRD Director, Western Balkans, said: We are pleased to sign this investment today which combines our strength as a financial institution with our goal to promote the green economy. It is also an excellent example of how improvements of economic and environmental performance can, and have to, go hand in hand.“

TaiwanICDF announced that as a donor it was pleased to support the project and congratulated the city of Zenica and ArcelorMittal Zenica for becoming cleaner and more energy efficient.

Zenica has already benefitted from EBRD support in several projects. The Bank is investing in improving energy efficiency in the city’s main hospital. Zenica also joined EBRD Green Cities, a programme to build a better and more sustainable future for cities and their residents.

The EBRD is a major investor in Bosnia and Herzegovina. Since the beginning of its operations in the country, the Bank has invested €2.3 billion in more than 155 projects. The 2019 EBRD Annual Meeting will take place in Sarajevo on 8 and 9 May.