BUSINESS

Charge d’Affaires of US Embassy in B&H: Lights Out on Power Grid Investment

Nicholas_HillGuest Blogger Charge d’Affaires Nicholas M. Hill on US Embassy to Sarajevo Blog:

I am seriously concerned about the proposed amendments to the Law on Elektroprenos, which could weaken the financial and operational stability of Elektroprenos.  In November 2012, both entities committed to fixing Elektroprenos before seeking to access any distribution of funds from Elektroprenos.   The entities pledged to adopt a long-term investment plan and approve audits of Elektroprenos’s accounts — and to appoint a functioning management and supervisory board.  This has not happened.  Yet, the Council of Ministers proposes an Elektroprenos amendment that removes existing protections against the misuse of the company’s funds – and sent it to Parliament in urgent procedure, which prevents the Parliament from adding improvements to the amendment.

It is premature to seek a distribution of Elektroprenos’s accumulated profits.  These funds were collected from the citizens of BiH and are intended to ensure that these same citizens have a stable and reliable supply of electricity and that investments are made in the power grid that could attract investment and spur job creation.  Diverting these funds to short-term budget needs, without first enacting the safeguards all responsible governments and ministries pledged to do, puts this at risk.

This is not a new problem.  The only reason these funds have not already been spent on their intended purpose of power grid maintenance and expansion is because the management board and the entities, which are Elektroprenos’s shareholders, could not agree on an investment plan or even to appoint qualified and experienced people to operate the company when board member mandates expired.  BiH leaders need to fulfill their commitments to fix these problems before stripping this company of its assets.

BiH’s electrical grid is outdated and in need of comprehensive investments.  To ignore the long-term importance of BiH’s energy sector as a driver of economic growth and job creation in order to focus on short-term budget gaps short-changes BiH’s youth, who continue to struggle with high levels of unemployment.  The citizens of BiH deserve more than this from their leaders.  It is vital for the future of BiH’s power grid and overall economy that leaders fix Elektroprenos before weakening the current law that protects these funds from misuse.

(Source: US Embassy Sarajevo)

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