Republika Srpska President Milorad Dodik and Minister of Industry, Energy and Mining Petar Djokic agreed with representatives of the Chinese Poly Group Corporation to form a joint enterprise for building a new thermal power plant in Gacko, which would replace the old facility in the foreseeable future.
Dodik told reporters after the meeting in Belgrade that the Chinese partners will own 51 percent of shares and Republika Srpska 49 percent of shares in the company, and that the Government of Republika Srpska is expected to make a decision within the next two weeks on the formation of the joint company in order to execute the agreement.
He noted that talks had already been going on for quite some time about the details of potential cooperation with the Chinese partners on the Gacko 2 thermal power plant project and the jointly owned company, where the Chinese would develop all aspects concerning the financing, design and construction of the TPP.
“Bearing in mind the present condition of the TPP in Gacko, we find it very important to approach the new investment and believe that the Chinese partner is highly credible and that we can discuss the details. What we have agreed here today is part of the stage we have already finished. We negotiated various models over the past year or so after my visit to China, when we agreed to do this,” said Dodik.
He noted that various models had been examined and that they arrived at the conclusion that the best model was the one of a joint company agreed on Tuesday, where each side will secure the money necessary for the construction, in order to speed up the procedures and resolve the issue of the design.
Dodik pointed out that Poly Group is a leading consortium in the construction of energy systems and one of the biggest ones in China itself.
“This is a part of the talks we have already had and it’s been successful. It is up to the Government to make the decision on the establishment of the joint company within the next fortnight so that we can bring this agreement to fruition,” said Dodik.
Minister of Industry, Energy and Mining Petar Djokic said the Gacko 2 would be an extremely important project for Republika Srpska and that the Tuesday talks were possibly the most important talks with Chinese partners about the project so far.
Construction of Gacko 2 is part of the activities defined in the scope of the implementation of the Energy Development Strategy, which includes the construction of new facilities and is crucial for Republika Srpska.
“This facility would replace the existing one, which has been in operation since 1983. Such a plant has its life expectancy and we have to think about developing our energy sector and capacities further, especially in the part of Herzegovina where we still have sufficient quantities of coal reserves that could be utilised by the new thermal power plant,” Djokic said.
He added that all other important details would be discussed in the future stages of the negotiations.
“It is very important that the Chinese side is completely open and willing to support all Republika Srpska’s activities and we feel the same because those efforts will help us realise this project fully,” said Djokic.
The minister stated that the plan is for the existing Thermal Power Plant Gacko to close down and for Gacko 2 to take over as the producer of electricity, but could not say when this might happen.
“This is definitely the plan. If it wasn’t for everything that had happened in BiH over time, we would have already had finished replacement facilities both in Gacko and in Ugljevik,” Djokic told reporters after the meeting which took place at Hotel Crowne Plaza Belgrade.