The government of Republika Srpska has approved a €10 million loan guarantee for Hidroelektrane na Drini, a subsidiary of the state-owned electricity utility ERS. This financial backing comes from the Investiciono-razvojna banka (IRB) and is intended to alleviate ongoing financial pressures faced by the company, which is engaged in hydropower generation.
The loan agreement features an 18-month repayment period with a 6% interest rate. The funds are earmarked for capital investment projects within Hidroelektrane na Drini’s operational portfolio, reflecting a strategic move to bolster infrastructure amid fiscal constraints.
Under the terms of the guarantee, Republika Srpska has pledged to cover any overdue liabilities should Hidroelektrane na Drini and its parent company ERS fail to fulfill their repayment obligations. The guarantee mechanism ensures that any unpaid amounts will be drawn directly from the government’s budget resources, highlighting the state’s commitment to supporting its energy sector.
This financing decision follows statements from Petar Đokić, Republika Srpska’s Minister of Energy and Mining, who noted earlier this year that construction activities on the HPP Bistrica hydropower project had been curtailed due to financial limitations. Hidroelektrane na Drini is the primary investor in this project, which is critical for enhancing local energy production capabilities.
Financial results from the previous year indicate that Hidroelektrane na Drini experienced a net loss of approximately €1.2 million, underscoring the significant fiscal challenges within the hydropower sector. This context emphasizes the importance of state support through mechanisms like loan guarantees to ensure operational viability and continued investment in energy infrastructure.
