When the Republika Srpska authorities signed contracts with the China Eximbank to finance the Dabar hydropower plant at the end of 2021, it seemed like the first and largest part of the Upper Horizons complex was a done deal. Today, more than four years later, obstacles are piling up for this controversial project, providing a much-needed opportunity to rethink the whole idea.

Earlier this month, Bankwatch joined the Center for Environment and a group of journalists on a visit to some of the regions under threat from the Upper Horizons hydropower system. The system would be built in the karst fields (poljes) of the Republika Srpska entity of Bosnia and Herzegovina, transferring water from the Neretva river basin to the Trebišnjica via three planned hydropower plants and a series of tunnels, reservoirs and channels.

The first to be built is the 160 megawatt (MW) Dabar hydropower plant, which would be the middle one in the system, and is currently under construction by China’s Gezhouba Group, with well-connected local companies Integral Inženjering and Elnost as sub-contractors. 

The lowest of the three hydropower plants, Bileća (32 MW), is at a much earlier stage, having had its environmental impact assessment approved in December 2025. The uppermost plant, Nevesinje (60 MW) would be the last one, and no concession has been issued for it yet.

Devastating, wide-ranging impacts on people and biodiversity

The system’s impacts would be devastating, not only in Republika Srpska but also in the Federation of Bosnia and Herzegovina and in the Neretva delta in Croatia.

The Dabar hydropower plant would drown the most fertile agricultural area of Nevesinjsko polje in Republika Srpska, while the whole complex would disrupt underground water flows and cave systems, whose unique flora and fauna – including several species of fish called Gaovica and found nowhere else in the world – depend on annual flooding and dry periods to complete their lifecycle. A planned channel across Dabarsko polje would partly drain the field, disrupting its well-preserved biodiversity.

Attempting to retain water in Republika Srpska’s karst fields would also lead to decreased underground water flows to the Buna, Bunica and Bregava rivers in the Federation of Bosnia and Herzegovina. These are not only highly attractive tourist destinations and sources of water for local people, but are also highly biodiverse. The Buna, for example, is a key site for the softmouth trout, considered vulnerable by the IUCN.

The Buna, Bunica and Bregava are key tributaries of the river Neretva, whose delta downstream in Croatia is an important agricultural area, especially for growing citrus fruits. It is a key site of the EU Natura 2000 network, has several ornithological reserves, and is protected under the Ramsar Convention. 

The delta has already been suffering from salination in recent years, as a result of reduced flow in the Neretva during drier periods. Diverting part of the Neretva’s flow to the Trebišnjica, as the Upper Horizons complex plans to do, would exacerbate this issue even further, denying people in the delta their livelihoods.

Republika Srpska keeps renewing Dabar’s environmental permits on the basis of an outdated and inadequate environmental impact assessment study from 2012, denying the public any chance to have a say in the intervening 13 years. After the Aarhus Center in Sarajevo managed to successfully challenge some of the project’s construction permits in court, the authorities just reissued them again, without addressing the deficiencies that led to the legal challenges.

Republika Srpska’s authorities may believe they are above the law, but even they cannot control the vagaries of the karst terrain where the project is planned. Building tunnels and reservoirs in karst is never a simple matter. You never know when you will disrupt an underground water flow or drill into a cave in this Swiss-cheese-like terrain. Holding water in a reservoir of over nine square kilometres – equal to 1266 football fields – in Nevesinjsko polje for the Dabar plant may prove to be mission impossible.

A particularly illustrative incident happened in 1964 on the Fatničko polje, at the Obod estavelle – a formation which functions both as a spring and as a sinkhole, depending on the season. An attempt was made to block the estavelle with concrete. Shortly afterwards, heavy rainfall resulted in springs appearing more than 100 metres above the plugged hole, endangering two villages. The concrete was destroyed with explosives and the previous water flows restored. 

The issues caused by Upper Horizons so far have been smaller-scale, but fatal. The construction of the 12-kilometre diversion tunnel from Nevesinjsko to Dabarsko polje, saw large-scale rockfalls in cavernous zones. In 2022, a worker died and two more were injured during a collapse. 

The drilling of the tunnel began in September 2016, and was carried out by Integral Inženjering. It was expected to take four and a half years, but so far it has taken almost ten. The actual drilling was completed in October 2025, but the concrete lining is still being completed. 

In July 2025, the village of Berkovići and other nearby villages were also left without drinking water from the Vrijeka spring for several days after damage by works on the Dabar powerhouse. 

On the last day of 2021, a EUR 189.4 million loan agreement was signed for the Dabar hydropower plant by the China Eximbank, entity-owned utility Elektroprivreda Republika Srpska (ERS), and its special purpose vehicle HE Dabar d.o.o. This covers the part of the project led by Gezhouba, including the Pošćenje dam, the powerhouse and other infrastructure, although the details are unknown due to the opacity of the project. 

Despite all parties involved being public sector companies and banks, Republika Srpska has refused to disclose either the contract with Gezhouba or the loan contract. The Center for Environment is currently challenging this refusal at the Supreme Court.      

But the Eximbank loan doesn’t cover the whole amount needed. The contract with Gezhouba reportedly costs around EUR 224 million, with the roughly EUR 34 million not covered by the loan to come from ERS’ own funds. The diversion tunnel was also reportedly built from ERS’ own funds, amounting to around EUR 60 million by late 2025.

Another expense reportedly being borne by Republika Srpska is land expropriation. The process has been going on for several years in Nevesinjsko polje, but is far from complete. 

Since 2023 we’ve made successive visits to the area, but the situation remains as mixed as it was then. Some land owners, particularly those not living locally, received offers and agreed to sell it. Others challenged the expropriation in court – either due to the low prices offered or rejecting it altogether. Some have not received any expropriation papers at all, despite their land obviously being in the area to be flooded by the reservoir. 

What was new during our recent visit was mentions of delays with payment. Some people we spoke to had received and accepted offers, yet the money had not been transferred.

This chimes with media reports from late last year that lawyers involved in the expropriation process had not been paid for months and were threatening legal action to ensure payment. In April 2026 it was also reported that ERS was planning to borrow EUR 25 million more, among others to pay for expropriation. But it remains to be seen whether this will be enough to ensure.

China Eximbank withholding funds

In early May it was reported that as early as August last year, China Eximbank stopped disbursing funds for the Dabar hydropower plant and that Gezhouba had withdrawn most of its workers, only keeping up minimum maintenance on the building site. 

The main problem, according to the media, was the non-completion of the diversion tunnel, which was a condition for the disbursement of the next instalment from the bank.

Gezhouba’s presence had previously been proudly advertised at the building site on Dabarsko polje, but not any more. The flags have been removed, machinery is laying dormant, and only a few workers remain.

Republika Srpska’s authorities have admitted that the works on Dabar have slowed down and some financial issues need to be resolved. But they clearly believe this will happen.

The question is whether it should. The works so far have cut hideous scars into the landscape and used vast amounts of concrete and energy. But the main impacts of the Upper Horizons complex would occur only when the reservoirs are filled and the plants start operating. This can still be prevented even for Dabar, and certainly for Bileća and Nevesinje, which are at a much earlier stage.

More challenges to the Upper Horizons complex are pending. The Bern Convention on the conservation of European wildlife and natural habitats is currently examining a complaint on the plans, and in February the Croatian authorities announced they had submitted a complaint to the Espoo Convention on environmental impact assessment in a transboundary context. More such complaints can be expected as the complex progresses.

Every delay costs money, and just because money has already been spent, that doesn’t mean Republika Srpska should keep digging. Dabar’s capacity of 160 MW might sound impressive, but its expected electricity generation would only be 251 gigawatt hours per year. This is only twice as much as the modestly-sized Hrgud wind farm currently planned in Republika Srpska. And in reality, due to climate change, we expect even less. 

It’s not too late for Republika Srpska to cut its losses and pursue less damaging energy projects, and it should do exactly that.

The project benefits from the support of the Donors Initiative For Mediterranean Freshwater Ecosystems. 

This document was produced with the financial assistance of the Donors Initiative For Mediterranean Freshwater Ecosystems. The contents of this document are solely the liability of CEE Bankwatch Network and under no circumstances may be considered as a reflection of the Prince Albert II of Monaco Foundation or Donors Initiative For Mediterranean Freshwater Ecosystems’ position.