Germany stops funding infrastructure projects in Bosnia’s secessionist Serb entity

Germany stops funding infrastructure projects in Bosnia’s secessionist Serb entity
Republika Srpska's parliament voted in June to reject the authority of the state-level Constitutional Court. /
By Iulian Ernst in Bucharest August 10, 2023

The German government has shut down the financing of four infrastructure projects worth €105mn in Bosnia & Herzegovina’s autonomous Republika Srpska over the secessionist aims of its president, Milorad Dodik, according to a statement by the German embassy.

The projects are Republika Srpska’s first wind farm, called Hrgud, as well as two revitalisation projects at the Trebinje hydropower plant (HPP) and the construction of a wastewater treatment plant in Gradiska.

The funding was initially suspended in April 2022 after Dodik moved to pull the Bosnian Serb entity out of state institutions, triggering Bosnia’s gravest political crisis since its 1992-1995 war. In June this year, the region’s parliament voted to conditionally suspend the rulings of Bosnia’s Constitutional Court and decisions by the international peace envoy in Bosnia, triggering US sanctions against senior Bosnian Serb officials.

Dodik has accused Washington of being biased against Serbs.

He warned that if Germany decides to cancel the loan, the entity will seek financing for the Hrgud wind farm — the largest of the four projects called off by Germany — from China.

The projected installed capacity of Hrgud, with 16 turbines, is 48 MW, while its average annual output would be 126 GWh of electricity.

The German development bank KfW had approved a €60mn loan for the Hrgud wind farm project, while the rest of the funding, €4mn, was to be provided by the entity’s public power utility Elektroprivreda Republike Srpske (ERS).

The financing of phase 3 of the Trebinje HPP revitalisation project includes a €4mn grant from the German government and a €6mn loan from KfW.  

The project in Gradiska includes upgrading and expanding the town’s sewer network and building a wastewater treatment plant. KfW has approved a €10.3mn loan for this purpose, while Switzerland’s government is expected to provide a €4.3mn grant.