Energy Investment Activity
Total Funding: $5.47 million
Project Duration: September 2014 – 2019
Implementing Partner: Advanced Engineering Associates International
The energy sector is one of Bosnia and Herzegovina’s (BiH) most important export sectors and engines for economic growth. The sector also has key relevance for the country’s accession to the European Union (EU) and energy security in the Western Balkans. BiH could more than double its electricity production if it capitalized on its potential for hydroelectric power, used renewable energy sources, implemented energy efficiency measures and built more thermal power plants. To date, however, a number of obstacles – political and bureaucratic, and the absence of a market-oriented environment – have driven away even the most determined investors.
The main objectives of USAID’s Energy Investment Activity are to help the country attract investment and create jobs in the energy sector. Through this activity, USAID works to revise and align the permitting processes for construction of electricity generation facilities, so they are consistent, transparent and investor friendly throughout the country. The project will develop and recommend legislative measures, at all levels of government, that will stimulate investment in new power plants—especially renewable energy power plants and biomass cogeneration—in select regions of the country. It will also help establish a retail market in which electricity consumers can choose their supplier. It will work to improve energy efficiency among distribution system operators and suppliers to reduce CO2 emissions and energy costs. The project will also support the BiH Ministry of Foreign Trade and Economic Relations in its role of coordinating the country’s energy sector on its path to European Union accession. A strong public outreach and awareness program will ensure BiH citizens understand and benefit from the changes taking place in the energy sector.
Implementation and Expected Results
In partnership with local authorities, USAID’s Energy Investment Activity will ensure that the energy sector remains a profitable sector of the BiH economy by proposing and advocating for passage of transparent and investor-friendly legislation that will enable new generation plants to be built. The project is now identifying opportunities to stimulate investment in biomass power plants in the agriculture, wood processing and livestock farming sectors and then assist with their development. The project also works with energy regulators and govern-ment authorities to develop the necessary commercial processes that allow electricity customers to choose their suppliers according to the prices and services offered. Together with key energy stakeholders, the project will assist in drafting an “Energy Efficiency Obligation Scheme,” regulations that mandate energy efficiency measures for distribution system operators and include a financing mechanism for such upgrades. Implementation of these measures could eliminate the need for at least one thermal power plant and create jobs in the energy efficiency sector.