Bosnia and Herzegovina strengthened its position as a regional electricity exporter during the first half of 2026, producing 7.44 TWh of electricity, an increase of 3.5% compared to the same period a year earlier. Domestic electricity consumption remained relatively stable at around 6.15 TWh, while hydropower generation climbed by an impressive 32.4% to 3.13 TWh. Electricity production from transmission-connected wind and solar power plants also continued to expand, rising 16.1% to 0.64 TWh. As a result, the country recorded a net electricity export surplus of 1.44 TWh, representing a 28.6% increase and reinforcing its role as an important electricity supplier in Southeast Europe.
Despite these encouraging production figures, the financial performance of the power sector tells a more challenging story. Electricity generated by thermal power plants declined 16.9% to 3.07 TWh, reflecting persistent coal supply shortages and reduced operational availability at several generating units. Although Bosnia and Herzegovina exported more electricity overall, export revenues fell 16.2% to EUR 168 million, while the electricity trade surplus narrowed to only EUR 23 million. The figures demonstrate that higher export volumes alone are insufficient to guarantee stronger financial performance, as market prices, hydrological conditions and the cost of replacing unavailable thermal generation continue to influence sector profitability.
The situation at the Ugljevik thermal power plant illustrates many of the structural challenges facing Bosnia’s coal-based generation fleet. Shortly after completing a 60-day emergency overhaul, the plant was forced to shut down again due to unsuitable coal quality and continuing technical problems. Normal mining operations require approximately 35 haul trucks, yet only around 20 remain available, many of them operating with components taken from other vehicles. Industry estimates suggest that the plant requires at least 220 MW of output to avoid financial losses and around 270 MW to operate profitably, while production before the latest outage had fallen to roughly 160 MW. Financial performance has deteriorated accordingly, with RiTE Ugljevik recording losses of approximately EUR 14 million in 2025 and a further EUR 18 million during the first quarter of 2026.
The challenges extend well beyond a single power station. Elektroprivreda Bosne i Hercegovine (EPBiH) continues to struggle with the financial burden of maintaining ageing coal-fired assets while operating under regulated electricity prices that remain below production costs. Since 2024, the utility has invested around EUR 92 million in thermal power plants, following an additional EUR 72 million invested between 2015 and 2023. At the same time, a financial review revised the company’s inherited 2023 loss from the previously reported EUR 28.2 million to EUR 169.5 million, while coal mines within the group accumulated combined losses of approximately EUR 540 million. Weak coal production, regulated tariffs and increased reliance on electricity purchases from the market continue to undermine the company’s financial position and its ability to fund the energy transition.
Financing conditions also reflect growing concerns about the sector’s long-term outlook. RiTE Gacko recently secured an EUR 11.3 million state-guaranteed loan carrying a fixed interest rate of 6.9%, together with a processing fee of 2.97%, equivalent to nearly EUR 330,000. While the government guarantee significantly reduced the lender’s credit risk, borrowing costs remained relatively high, highlighting continued market concerns regarding governance standards, operational performance and project execution within Bosnia and Herzegovina’s coal sector.
At the same time, the country continues to create opportunities for cleaner energy investment. The Development Bank of the Federation of Bosnia and Herzegovina has introduced a EUR 7.9 million green financing programme for small and medium-sized enterprises, offering loans with maturities of up to 10 years, a fixed interest rate of 2.5% and a processing fee of only 0.5%. Growing renewable electricity production, combined with stronger hydrological conditions, has already increased export potential. However, the gradual implementation of the Carbon Border Adjustment Mechanism (CBAM) is expected to reduce the competitiveness of carbon-intensive electricity exports to the European Union unless producers can clearly demonstrate lower emissions and the renewable origin of electricity supplied.
Looking ahead, Bosnia and Herzegovina faces the challenge of balancing energy security with long-term decarbonisation. The country will require two complementary strategies. The first is a comprehensive operational recovery programme for coal mines and thermal power plants, supported by transparent decisions on which facilities should be modernised and which should be gradually retired. The second is the development of a bankable pipeline of renewable energy investments, including wind farms, solar power plants, hydropower rehabilitation, battery storage and electricity grid upgrades. Without improvements to existing thermal assets, system reliability could deteriorate before replacement capacity becomes available. At the same time, delaying investment in modern low-carbon infrastructure risks directing public resources toward ageing assets whose maintenance costs and carbon liabilities are rising faster than their long-term economic value.
