The EBRD is considering a loan of up to €19 million to BH-Gas d.o.o. Sarajevo to finance the construction of new 40km high-pressured natural gas transport pipeline to enable natural gas supply to four municipalities in Central Bosnia Canton providing a clean and efficient alternative fuel supply for industry, district heating and households in the towns of Travnik, Vitez, Busovaca and Novi Travnik.
This project is designed to continue to support reforms in the natural gas sector in Bosnia and Herzegovina and to support the development of natural gas transmission and distribution networks, which should bring considerable environmental benefits through pollution reduction by switching from heating oil, coal and wood burning to a cleaner and more efficient fuel. The transition impact objectives are:
(i) fostering institutions and policies that promote market efficiency by working on the first steps for a phased unbundling of transmission system operators in the context of the natural gas sector reform in the country, as well as by preparing the establishment of an independent regulator for the natural gas distribution market in the Federation of Bosnia and Herzegovina;
(ii) setting standards for environmental, health and safety management and procurement by introducing international public sector procurement rules and improving tendering procedures; and
(iii) expand the competitive environment by playing an active role with local authorities to open tenders for the attribution of natural gas distribution concessions to private companies.
Registered in 1997, BH-Gas d.o.o. Sarajevo is a limited liability company active in transport and wholesale of natural gas in the Federation of Bosnia and Herzegovina. The company is the only transmission system operator of natural gas in the Federation of Bosnia and Herzegovina and is owned by its Government.
The EBRD would provide a senior loan of up to €19 million directly to BH-Gas d.o.o. Sarajevo with a tenor of 15 years. The State of Bosnia and Herzegovina will provide a sovereign guarantee.
The project is expected to cost up to €23.5 million.
The proposed high pressure gas transport pipeline will transport natural gas from Zenica to Travnik, enabling the gasification of 4 municipalities in the Central Bosnia Canton. Construction is expected to begin in September 2009, and the 41.386 km long pipeline is expected to become operational in March 2011. The gas pipeline route will be divided between the following municipalities:
- Zenica 7.175 km (Zenica-Doboj Canton)
- Busovaca 9.294 km (Central Bosnia Canton)
- Vitez 10.140 km (Central Bosnia Canton)
- Novi Travnik 1.795 km (Central Bosnia Canton)
- Travnik 12.982 km (Central Bosnia Canton).
The potential environmental and social impacts of the project are site specific and can be readily addressed through mitigation measures. Therefore, the project has been screened B/0 in accordance with the EBRD Environmental Policy (2003).
Environmental and social issues
An Environmental and Social Analysis has been carried out by independent consultants. The study concluded that the construction of the proposed Zenica - Travnik gas pipeline will not result in any long-term adverse environmental impacts except the footprint that will remain in the forest areas. In the forest areas there will be a 10 m safety zone which can not be planted with trees. Other potential impacts will be short-term and temporary in nature. These will include:
- Noise emissions and vibrations associated with construction activities (i.e. blasting, horizontal directional drilling, earthmoving works, the use of heavy vehicles etc.);
- Traffic impacts during construction; and
- Potential disputes related to land access and land use, which may result in impacts to the livelihoods of persons within the pipeline route.
Environmental and social opportunities
The project is expected to result in some positive social impacts including the potential for supplying locally sourced goods and services to the Project, during pipeline construction; and future opportunities for employment in the gas distribution sector following construction. The pipeline is also an important element in securing future energy supplies for the Northern and Central regions of Bosnia and Herzegovina, thereby providing an alternative clean and efficient energy source and a reduction in greenhouse gas emissions.
Summary of Environmental and Social Action Plan
An Environmental and Social Action Plan (ESAP) which sets the mitigation measures for the avoidance/minimisation of potential impacts, timelines for these mitgation measures, and responsibilities has been prepared and agreed with the Client. ESAP requires the development of the following plans and procedures:
- Reinstatement Plan
- Site-specific Reinstatement Plan (for areas likely to undergo severe erosion)
- Hydrostatic Test Water Management Plan
- Horizontal Directional Drilling (HDD) Fluid Release Contingency Plan
- Blasting Management Plan
- Transport Management Plan
- Archaeological and Historical Chance Finds Procedure
- Waste Management Plan
- Hazardous Material Control procedure
- Spill Response Plan
- Emergency Response Plan
- Safety Awareness Program (developed for the local communities).
The following monitoring programs have also been proposed during pipeline construction and operation:
- Noise quality monitoring
- Air quality monitoring
- Surface and groundwater monitoring
- Monitoring of polluted soil
- Hydrostatic test water discharges
Technical cooperation funding will be mobilized to hire a consultant to assist BH-Gas d.o.o. Sarajevo in the procurement and monitoring of the project. The consultant’s assignment will be aimed at ensuring that the project is successfully implemented within the planned time schedule, within the budget and to an acceptable quality. The Consultant will prepare the tender documents for the selection of contractors, assist the company to manage and conduct the procurement process, and monitor and audit the performance of the contractors.
For business opportunities or procurement, contact the client company.
EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
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Text of the PIP