The House of Peoples of the Parliament of Federation of Bosnia and Herzegovina has adopted the amendments of the Law on Electricity (the “Law”) which prohibits the development of small hydropower plants with installed capacity under 10 MW.
The adoption of the amendments of the Law by the House of Peoples, made the ban official and final as the amendments of the Law were initially adopted by the House of Representatives of the Parliament of Federation of Bosnia and Herzegovina in June 2020.
Apart for the general ban of development and construction of small hydropower plants, the amendments of the Law also envisage the suspension of issuance of Energy Permits for small hydropower plants, except for those on gravity water mains. Investors which have already obtained concessions for development of small hydro powerplants have been left with a three-year deadline to obtain the required documents and complete relevant procedures required for issuing the Energy Permit for their projects. If the investors fail to complete the necessary steps within the prescribed three-year period, they will not be able to complete the development phase and will ultimately be forced to abandon their small hydropower plant projects.
This puts great pressure on investors which are currently in early project development stages, and it’s expected that a significant number of currently active projects will be abandoned due to the adoption of the ban.
The adoption of amendments of the Law which introduced the ban of development of small hydropower plants came after a long struggle by activists and residents of local communities who opposed the construction of small hydropower plants by protesting and documenting the negative impact of the constructed small hydropower plants on river ecosystems. It is estimated that the ban has prevented future development of approx. 60 small hydropower plant on 11 rivers in Federation of Bosnia and Herzegovina and that the suspension of issuing the Energy Permit will hinder the development of tens of hydropower plants which are currently in early development phases.
The amendments of the Law will enter into force in 8 days after their publication in the Official Gazette, which is expected by the end of July 2022.
The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.
