The investment cost of the Bistrica hydropower project in Bosnia and Herzegovina has risen by about two-thirds, according to shareholder records cited in connection with a new round of funding. The project’s estimated value increased from an original €102.5 million to more than €171 million, an increase of roughly 66%. The higher figure is linked to construction risk, capital requirements and the financial exposure of state-controlled electricity companies.
The latest step follows approval of an additional €11 million recapitalisation of project company HE Bistrica by shareholders representing state capital. The transaction is intended to convert previously extended loans into equity, enabling construction to continue under a contract with Chinese engineering contractor AVIC. It comes after a separate €7 million capital increase approved at the end of February 2026.
Recapitalisation structure and timing of additional funding
Construction on the Bistrica project began in late 2021, with earlier financial support preceding the February 2026 decision. The additional €7 million capital increase was approved at the end of February 2026, adding to the funding already provided. The most recent recapitalisation approved by state-capital shareholders is described as part of continued financing while construction remains ongoing.
The additional expenditure was expected to be reflected in Hidroelektrane na Drini’s 2026 business plan. However, the plan had not yet been formally adopted or reviewed when shareholders made their decision. This timing issue was raised alongside questions about how the latest recapitalisation was authorised.
Cost escalation drivers and unresolved explanations
The escalating investment cost has become a central issue for the project, with shareholder records pointing to additional construction requirements. Works associated with landslide remediation are cited as contributing to the increase in costs. At the same time, shareholder records indicate that a complete explanation for the higher project cost had not yet been clearly established.
The uncertainty is described as particularly important 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 authorise the latest recapitalisation. Updated cost estimates and supporting documentation are therefore highlighted as relevant when budgets rise substantially.
Ownership history and implications for project oversight
The project’s ownership history is also part of the financing debate around HE Bistrica. 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 increased construction costs have drawn renewed attention to cumulative financial commitments tied to the development. For electricity sector investors and lenders, the case is presented as illustrating challenges in controlling capital expenditure on hydropower projects affected by geological conditions, changing construction requirements and extended implementation schedules.
The material impact of cost escalation on project economics is linked to higher investment requirements that must be recovered through electricity sales, while delays postpone operating cash flow. The project is also described as showing why financial oversight needs to extend beyond the original construction contract with AVIC. Updated cost estimates, documented variations and geological risk assessments are identified as increasingly important alongside clearly approved financing plans.
Bistrica remains under construction, but the latest recapitalisation does not establish a final investment cost on its own. That distinction is described as remaining central to assessments of the project’s financial viability.
