The estimated investment value of HE Bistrica has risen from an original €102.5 million to more than €171 million, an increase of roughly 66%. Shareholder records cited in the latest reporting indicate the cost has grown by approximately two-thirds. The change has been linked to construction risk, capital requirements and the financial exposure of state-controlled electricity companies.
€11 million recapitalization approved for HE Bistrica
The most recent step followed approval of an additional €11 million recapitalization of project company HE Bistrica. The transaction was approved by shareholders representing state capital. The recapitalization is intended to convert previously extended loans into equity. It is designed to support continued construction under a contract with Chinese engineering contractor AVIC.
A separate capital increase of €7 million was approved at the end of February 2026. That funding adds to earlier financial support since construction began in late 2021. The escalation in investment cost has become a central issue for the project.
Landslide remediation and planning basis raise questions
Additional construction requirements and works associated with landslide remediation have contributed to the increase in costs. However, shareholder records indicate that the full explanation for the higher project cost has not yet been clearly established. The uncertainty is described as significant because further financing is being committed while the final investment requirement remains open to question.
The Investment and Development Bank, representing state capital, also raised concerns about the planning basis used to authorize the latest recapitalization. The additional expenditure was expected to be reflected in Hidroelektrane na Drini’s 2026 business plan. At the time shareholders made their decision, that plan had not yet been formally adopted or reviewed.
State ownership changes and cumulative funding focus
The project’s ownership history has added another element to financing discussions. The state sold HE Bistrica to Kaldera Company for €3.5 million in 2008. It later reacquired the company in 2019 for more than €11 million.
The ongoing rise in construction costs has drawn renewed attention to cumulative financial commitments tied to the development. For electricity sector investors and lenders, the case highlights challenges in controlling capital expenditure on hydropower projects affected by geological conditions, changing construction requirements and extended implementation schedules. Cost escalation can materially alter project economics by increasing capital that must be recovered through electricity sales, while delays postpone operating cash flow.
The project is also presented as an example of why financial oversight may need to extend beyond the original construction contract. Updated cost estimates, documented variations, geological risk assessments and clearly approved financing plans are described as increasingly important when a project budget rises substantially. Bistrica remains under construction, but the latest recapitalization does not by itself establish a final investment cost.
