March 15, 2019 / 12:16 PM / 11 days ago

EBRD arranges $52 million loan to replace coal-fired plant in Bosnia

FILE PHOTO: The headquarter of the European Bank for Reconstruction and Development (EBRD) is seen in London, Britain, November 22, Britain 2016. REUTERS/Stefan Wermuth

SARAJEVO (Reuters) - The European Bank for Reconstruction and Development (EBRD) has arranged a 46 million euro ($52.09 million) financing package to replace a highly polluting coal-fired plant in the central Bosnian town of Zenica, the bank said on Friday.

The new combined gas-fired co-generation plant, Toplana Zenica, will supply power and heat to Zenica and its largest employer, an ArcelorMittal steel plant, the bank said in a statement.

The aging steelworks plant, which relies on coal for nearly half of its fuel input, has been the sole external provider of heating in the winter and a major source of pollution in Bosnia’s fourth largest city.

ArcelorMittal Zenica will form a joint venture with the city of Zenica and two Finnish companies, KPA Unicon and Finnfund, to implement the project aimed at securing greener and more cost efficient energy production, the statement said.

The EBRD will provide a 28 million euro loan for the project and Banca Intesa Sanpaolo S.p.A. a loan of 23 million euros.

“We are pleased to sign this investment today which combines our strength as a financial institution with our goal to promote the green economy,” said Zsuzsanna Hargitai, the EBRD Director for the Western Balkans.

Environmentalist groups have urged European Union’s policy makers to take a tougher stance on air pollution from the Western Balkan’s coal power plants, blaming the fumes for 3,900 deaths across Europe and health costs of up to 11.5 billion euros a year.

Earlier this week, the European Union executive in charge of the bloc’s enlargement policy criticized the Bosnian authorities for approving a Chinese loan guarantee for a new coal-fired power plant in Tuzla.

Reporting by Daria Sito-Sucic; Editing by Kirsten Donovan

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