Home >> Our Work >> Projects >> Banovici lignite power plant, Bosnia and Herzegovina

Banovici lignite power plant, Bosnia and Herzegovina

The 350 MW Banovići coal power plant project is being developed alongside the existing Banovići mine just a few kilometres away from Tuzla by the predominantly state-owned RMU Banovići (Banovići Brown Coal Mines). The power plant would be a greenfield facility and a cement plant is also planned nearby. This project is in direct competition with the Tuzla 7 lignite power plant.

The Banovići brown coal power plant is planned at the site of the existing Banovići mine and is to be built by China’s Dongfang, the same company which built the Stanari plant. Banovići started as a 300 MW project but halfway through the tender it was changed to 350 MW.

Mystery economics

The project’s economics have been kept under wraps and no feasibility study is publicly available. Banovići’s Director stated in a July 2016 interview that the generation cost would be EUR 50/MWh. However, former EPBIH Director Amer Jerlagić cast doubt on this figure and stated that neither the Banovići nor the Tuzla 7 plants appear feasible given the low prices on the European electricity wholesale market. This opinion has also been confirmed by the current Director of EP BIH, Bajazit Jašarević, who admitted that both the Tuzla 7 and Banovići plants are currently unfeasible.

Financing has not been confirmed but is being sought from the Industrial and Commercial Bank of China (ICBC). The project is supposed to cost EUR 405 million. It also appears that a guarantee by the Federation of BiH government would be required, raising questions about compliance with state aid rules under the Energy Community Treaty.

Compliance with Industrial Emissions Directive not ensured by the environmental permit

A second environmental permit was issued for the Banovići power plant in early 2016, but failed to cover numerous issues and prescribe precise mitigation measures.

NGO Ekotim therefore filed a court case seeking to annul the environmental permit in April 2016.

The permit also failed to specify that the EU Industrial Emissions Directive - obligatory for new plants under the Energy Community Treaty - needs to be followed by the new plant. Ekotim therefore also submitted a complaint to the Energy Community Secretariat in July 2016.

Scarce water resources

For Banovici it is planned to expand the existing Ramići lake into a larger reservoir. However the lake is small and would need significant expansion, and it is not clear that the runoff from the surrounding hills could provide enough water. Another issue is the structural soundness of the earth dam which is planned to hold back the water at Ramići.

Initial proposals included using water from the Turija river to fill the reservoir during dry periods, however this would then deprive Modrac, and thus the Tuzla power plant and the people of Tuzla, of a significant source of water.

More recent proposals have focused on taking water from Lake Breštica which is located in the Spreča river basin, but this would have the same result. The issue remains unsolved. For this reason Ekotim filed a court complaint against the environmental permit for the reservoir in April 2016.

An AlJazeera report on the situation of the "Hostages of Coal" infrastructure in Tuzla and Banovici (local language ony).


Latest developments


Blog entry | August 17, 2017

New EU rules entering into force today, to limit pollution from power plants, will also apply in most Western Balkan countries. But the region’s governments are so far acting like they don’t exist.

Blog entry | June 16, 2017

Almost all the countries in the Balkan region are planning to build new coal power plants, but there has been virtually no mention of the need for them to comply with new pollution standards.

Press release | June 14, 2017

Almost none of the new coal power plants planned in the Western Balkans will meet new, stricter EU pollution standards, according to a new analysis by CEE Bankwatch Network, released today.

Download the analysis as pdf.

Blog entry | June 1, 2017

The European Union’s and China’s joint commitment to climate action is tarnished by Chinese support for and the EU’s neglect of coal projects in the Balkans, as a new briefing shows. But it is still not too late to change course.

Press release | April 28, 2017

The European Union has today approved an updated set of binding standards for power plants, which include new, stricter pollution limits.


Study | June 14, 2017

The new reference document on Best Available Techniques for Large Combustion Plants (LCP BREF) and its implications for new coal.

Briefing | June 1, 2017

Bosnia and Herzegovina, Serbia, Montenegro and Romania all plan new lignite power plants during the next few years. In contrast, most EU countries are giving up building new coal plants and seven EU states are already coal-free. Since the European Investment Bank, the European Bank for Reconstruction and Development and the World Bank have virtually halted lending for new coal power plants, most of them are due to be financed by Chinese state banks – ExIm Bank and the China Development Bank.

Briefing | March 29, 2017

This briefing analyses ten coal-fired power plant projects across the Western Balkans and finds that, once the cost of carbon emissions allowances are factored in, they could become a serious liability for both the companies involved and the public.

Briefing | November 14, 2016

Coal is the single biggest contributor to global climate change. But governments and investors planning new coal capacities have a range of flimsy arguments why coal would be the best or the only alternative. This briefing busts a number of myths surrounding coal, such as "coal is cheap", "alleviates poverty" or "coal is clean".

Study | November 14, 2016

This report reveals how and why promises for new jobs in south-east Europe’s coal sector are exaggerated. Hardly any coal operations across the region are economically viable, and as a result many coal workers, especially in the mines, are set to lose their jobs, even if the plans for countless new power plants materialise. Governments, coal workers and their wider communities need to work together towards a just transition.

Available languages: