Bosnia and Herzegovina’s foreign minister Elmedin Konakovic said that Croatian company Kermas Energija is likely to win its arbitration case against Bosnia and Herzegovina, specifically against the Republic of Srpska (RS), whose Government unilaterally terminated the company’s concession for a wind farm project in eastern Herzegovina.
Konakovic confirmed that the Council of Ministers reviewed information on ongoing arbitration proceedings launched over cancelled contracts, including Kermas Energija’s claim seeking 102 million euros in damages. He warned that these disputes represent a growing financial burden for RS and noted that although the Council discussed forming a negotiating team, he doubts it can achieve a result favorable to the defendant.
Kermas Energija owns 97 percent of the project company Eol Prvi. In October 2012, the company signed a concession agreement with the RS Government to build and operate the Trusina wind farm near Nevesinje. However, in 2019, the RS Government revoked the contract unilaterally, halting the project. As a result, the company is now pursuing compensation for the losses incurred. It is represented in the proceedings by the Banja Luka law firm Baros&Partners, which has proposed an out-of-court settlement.
The same law firm previously secured 56 million euros in compensation for Slovenian company Viaduct after the RS Government cancelled its concession for a hydropower project on the Vrbas river. Although Viaduct initially sued Bosnia and Herzegovina before the Washington-based arbitration tribunal, RS ultimately paid the damages after the High Representative redirected funds allocated to the entity from the Central Bank’s profit distribution.
Konakovic stated that he expects a similar outcome in the current case and emphasized that Bosnia and Herzegovina will not cover damages resulting from decisions made by the authorities in the Republic of Srpska.
