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Bosnia and Herzegovina: Buk Bijela hydropower project deadline extended amid legal disputes

The Government of the Republic of Srpska (RS) has approved an extension for the construction timeline of the Buk Bijela hydropower plant on the Drina River near Foča. The decision was formalized through Annex II of the concession agreement, which also increases the planned capacity of the plant.

Under the revised schedule, the preparatory phase—which includes project documentation, permits, and preliminary works—will span 30 months from the entry into force of the annex. Following this, 66 months are allocated for construction and trial operations. As a result, major construction is not expected to begin before March 2028, with project completion anticipated by the end of 2033. Preparatory works are estimated at €11 million, while construction costs are projected at €238 million.

Buk Bijela is a joint venture between the state-owned power utility ERS and Serbian EPS, forming part of the Upper Drina hydropower system, which includes three plants in total. Financing will be divided according to ownership, with 51% covered by EPS and 49% by ERS through the joint company HES Gornja Drina. Although the cornerstone was laid in 2021, little progress has been made since then.

The project has been delayed by two legal disputes. The first involves a case before the Constitutional Court of Bosnia and Herzegovina, where a group of MPs argued that concession rights for interstate projects should be granted by state-level institutions rather than RS. The matter has been referred to the BiH Commission for Concessions, which has yet to issue a ruling. The second dispute involves UNESCO, following Montenegro’s concerns that the plant could affect the protected Durmitor area.

These uncertainties have deterred investors. Three Chinese companies initially submitted bids and were expected to provide financing, but they withdrew after refusing to extend bank guarantees due to unresolved legal issues, leading to the annulment of the tender.

The revised annex adjusts project documentation to reflect the increased output of 115 MW. An environmental impact assessment is nearing completion in line with UNESCO requirements, though cooperation with Montenegro has been limited, as relevant data has not been shared. Project representatives maintain that the study will show no significant cross-border impact.

The Upper Drina hydropower system, including Buk Bijela and two other plants, is valued at approximately €520 million, with Buk Bijela alone accounting for around €250 million.

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