Elektrokrajina, the electricity distribution company in Bosnia and Herzegovina, is preparing to request a €38 million loan from the European Bank for Reconstruction and Development (EBRD). This financing aims to facilitate a significant upgrade of its distribution network while also addressing part of its existing debt. The proposal will be presented to shareholders during an upcoming assembly, where it requires their approval to proceed.
The proposed loan is structured to have a maturity of up to 20 years, which includes a four-year grace period. The interest rate is anticipated to be tied to the six-month Euribor plus 1%, aligning with typical market conditions for such financial arrangements. Additionally, the financing package includes a 1% approval fee and a commitment fee of 0.5% per annum on any undrawn funds.
Of the total loan amount, approximately €30 million is earmarked for the rehabilitation and reconstruction of medium- and low-voltage electricity infrastructure. This investment is viewed as crucial for modernizing the distribution network and enhancing overall system performance, which is expected to lead to improved reliability and quality of electricity supply for consumers.
Management at Elektrokrajina has underscored that this project represents one of its most significant infrastructure initiatives. The upgrades are designed to mitigate the frequency and duration of power outages while elevating service standards across its distribution area. Furthermore, the refinancing aspect of the loan is intended to fortify the company’s financial standing and promote long-term stability by restructuring existing liabilities.
Elektrokrajina asserts that pursuing this loan is economically justified due to the strategic necessity of modernizing its network, favorable financing terms, and anticipated operational benefits. The comprehensive investment program will span the entirety of its distribution network, positioning it as one of the most extensive utility modernization efforts currently planned within the Republic of Srpska.
