Ugljevik III lignite power plant, Bosnia and Herzegovina
The concession for Ugljevik III near Bijeljina in Republika Srpska, Bosnia and Herzegovina, is held by Russian billionaire Rashid Sardarov’s Comsar Energy.

Stay informed
We closely follow international public finance and bring critical updates from the ground.
Background
The original plan was for 2 x 300 MW units which would take lignite from the open cast mines at Delici, Peljave-Tobut, Baljak and part of Ugljevik-Istok. But the capacity has been changed to 700 MW.
Chinese contractors – but no financing
The initial plan was for the plant to be built by the China Power Engineering and Consulting Group Corporation (CPECC). China Development Bank representatives were present at the signing of an agreement between CPECC and the Republika Srpska authorities, indicating that the bank may be interested in financing, however this was never confirmed and media reports indicate that CPECC has dropped out of the project.
A twist occurred in June 2021 when it was reported that China Electric and the Polish-Chinese Sunningwell International Ltd had signed a construction contract for the project, despite the fact these companies had not been previously named as part of the project.
This was expected to result in Chinese financing for the project. However, in September and October 2021 respectively, China pledged to not build new coal-fired power plants abroad at the UN General Assembly and the EU-China Climate Dialogue. In January 2021, in response to a Diplomat article, Sunningwell issued a statement confirming that Chinese loans would not be available for the project.
Despite the project companies putting on a brave face, it is now unclear who could finance the project as China has been the only one willing to back coal in the region in recent years.
A chronology of legal troubles
In July 2017 the project seemed to reach a dead end when the Supreme Court of the Republika Srpska Entity cancelled the environmental permit based on a court challenge by the Center for Environment from Banja Luka.
However, the Ministry of Spatial Planning, Construction and Ecology responded by issuing another permit without repeating the environmental impact assessment process. This second permit was also challenged in court by the Center for Environment, but the process was never concluded because the permit was annulled due to a complaint to the Energy Community.
The complaint was made in December 2014 because the environmental impact assessment was missing key information and the data on likely emissions of SO2, NOx and dust were false.
This led to the Energy Community opening a dispute settlement procedure, which in November 2018 resulted in Bosnia and Herzegovina agreeing not to use the environmental permit, and officially annulling it in June 2019.
However, a new environmental impact assessment process was started and as of January 2022 is still ongoing.
Concession shenanigans
In August 2018, local media reported that Comsar was threatening to give up the project unless an extension of the concession from 30 to 45 years was granted, together with a reduction of the capacity from 600 MW to 350 MW, because the plant would otherwise be unprofitable.
In June 2019 it was reported that Republika Srpska’s state-owned electricity company, Elektroprivreda Republike Srpske (ERS), planned to buy off Comsar Energy’s concession for Ugljevik III. The likely cost has been cited at around EUR 90 million. Quite why ERS would buy off the concession rather than the government simply annulling it is far from clear. But in February 2021 it was reported that the concession had been extended from 30 to 45 years instead, despite Comsar not fulfilling its part of the contract.
Latest news
NGOs hail Chinese banks’ exit from Bosnia’s controversial Ugljevik III coal plant project
Press release | 18 January, 2022Republika of Srpska and China National Electric Engineering Corporation urged to follow.
Read moreSecret Chinese deal on Bosnia-Herzegovina coal plant must be urgently stopped, say NGOs
Press release | 30 June, 2021Environmental organizations have today expressed concerns and called on the Government of Republika Srpska to clearly explain what is happening with the Ugljevik 3 coal power plant and to urgently cancel the concession for the project.
Read moreUgljevik coal power plant in BiH connects desulfurization unit
Bankwatch in the media | 29 October, 2020Regular desulfurization finally started in RiTE Ugljevik’s thermal power plant. The project was implemented by Mitsubishi Power, which recently received a similar order for the Nikola Tesla B coal-fired unit in Serbia.
Read moreRelated publications
The great coal jobs fraud – unrealistic employment claims in southeast Europe
Study | 14 November, 2016 | Download PDFThis 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.
Balkan energy projects with Chinese involvement – state of play
Briefing | 31 July, 2016 | Download PDFBosnia 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.
Western Balkans countries invest at least 2.4 times as much in coal as in wind power
Briefing | 26 May, 2016 | Download PDFAll the Western Balkans countries have committed to increase their share of renewable energy by 2020 to reach between 25 and 40 percent of their energy mix, as part of their obligations under the Energy Community Treaty. Yet this is far from obvious when examining their investment plans for new power generation capacity. Governments are actively planning to build 2800 MW of new coal plants with construction cost of at least EUR 4.5 billion. In contrast, these countries are only planning to build around 1166 MW of wind power plants, at an estimated cost of EUR 1.89 billion.