Slovenian firm Elektrogospodarstvo Slovenije – razvoj in inženiring (EGS-RI) reached a settlement with struggling coal plant and mine operator Rudnik i termoelektrana Ugljevik (RiTE Ugljevik) and its parent company Elektroprivreda Republike Srpske (ERS). With the deal, they ended a dispute formally dating back to 2009, but for an investment from the Yugoslav era, in the early 1980s.
They signed an agreement on outstanding claims, EUR 37.4 million plus interest, Slovenian state-owned power utility Holding Slovenske elektrarne (HSE) said. Its subsidiary EGS-RI is tasked with recovering legacy investments and electricity rights. They have turned to arbitration over a share in the project for the Ugljevik complex.
The only unit in the combined heat and power (CHP) plant launched production in 1985. It is in northeastern Republic of Srpska, one of the two entities making up Bosnia and Herzegovina. The other one is called the Federation of BiH. The Republic of Srpska owns ERS.
HSE estimates total sum so far at EUR 230 million
All the agreements so far between the two sides regarding monetary compensation and the supply of electricity are estimated at EUR 230 million in total, according to HSE. Its CEO Tomaž Štokelj added that cash compensation amounts to more than EUR 188 million. In addition, RiTE Ugljevik is under obligation since February 2024 to supply a third of its output until it shuts down, he noted.
ERS and the Republic of Srpska have provided guarantees for the debt
With the new deal, the two sides ended the arbitration proceedings at the International Centre for Settlement of Investment Disputes (ICSID) in Washington DC. In 2023, an arbitration panel in Belgrade, Serbia, ruled that RiTE Ugljevik must pay EUR 67 million and EUR 58.2 million in interest for more than 5 TWh of electricity. HSE and the coal complex operator later regulated the principal sum of EUR 67 million, alongside a deal on EUR 65.2 million for undelivered electricity in the period from the beginning of 2022 to the end of January 2024.
Finally, in the new agreement, the companies determined the interest at EUR 37.4 million. They signed it in Ugljevik. ERS and the Republic of Srpska have provided guarantees.
Ugljevik coal plant to come back online within ten days
Acting Director of RiTE Ugljevik Žarko Novaković thanked the Government of the Republic of Srpska for its contribution to the deal. He said the next step is to negotiate the electricity price, and claimed it is too low. The agreement marks the end of a major issue for Ugljevik, after the one with the Comsar concession. The power plant has been shut down repeatedly over the previous few years, mostly because of the lack of coal.
Acting CEO of ERS Luka Petrović revealed that the first quantities have arrived from the Istok 2 open cast mine. He estimated that the facility would go back online within ten days.
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