Environmentalist groups demanded from the Republic of Srpska to scrap Comsar’s concession for coal-fired power plant project Ugljevik 3 after two previously unknown firms from China and Poland signed a contract for its construction.

China Electric and Polish-Chinese company Sunningwell International announced an engineering, procurement, and construction (EPC) deal for Ugljevik 3 in Bosnia and Herzegovina, prompting nongovernmental organizations to urge the authorities to clarify the plans for the coal-fired thermal power plant project.

The two firms’ involvement was previously unknown, though Capital.ba reported two years ago that a Polish-Chinese company was interested. The media outlet now learned from an anonymous source in the Government of the Republic of Srpska that Comsar Energy, the concessionaire, informed it discussions were underway about a “takeover.”

Concessionaire is in breach of deadlines

Comsar, controlled by Russian billionaire Rashid Serdarov, acknowledged only that it is negotiating with “strategic partners.” China Electric is a subsidiary of state-owned China National Electric Engineering Co. or CNEEC.

Discussions are underway about a “takeover,” according to an unnamed government source

In January, the government in Banja Luka extended the concession, signed in 2013, to 44 from 30 years even though Comsar breached deadlines. The plant was supposed to be finished already.

The Republic of Srpska, one of the two entities making up BiH, earlier allowed the company to expand the project by 100 MW to 700 MW, contrary to its Energy Development Strategy.

No sense to build coal plants

“The Ugljevik 3 project has plagued the energy sector for many years, and the authorities are tacitly allowing the investor to violate all possible contracts and laws. Suddenly a Chinese magic wand appears from nowhere for another project that was doomed from the start. We wonder why the Government of the Republic of Srpska has not yet terminated the contract with Comsar Energy, but also who is even considering new coal-fired thermal power plant projects in this era of the transition to renewable energy sources and the shutdown of thermal power plants,” said Majda Ibrakovi? from the Center for the Environment from Banja Luka.

Bankwatch and Just Finance International joined the call to cancel the concession.

The town of Ugljevik already hosts a privately-owned coal plant, one of five such facilities in BiH. The other four are run by government-controlled enterprises.

A coal plant project in Tuzla recently hit a wall as the Chinese contractor was left stranded when General Electric bailed out.