EU signs €70 million Financing Agreement for Energy Support Package for BiH

The European Commission has signed and sent to Bosnia and Herzegovina the Financing Agreement for the Energy Support Package worth EUR 70 million that will provide assistance to Bosnia and Herzegovina’s most vulnerable households to cope with rising prices and support energy transition.

The Council of Ministers of Bosnia and Herzegovina will now need to approve and countersign the Agreement, to receive the first tranche of the allocated funds, around EUR 63 million. Before the money is disbursed, BiH is expected to receive a positive assessment from the European Commission on progress in implementing the Action Plan that was approved by the BiH Council of Ministers on 22 December 2022. This Action Plan lists the measures that the BiH authorities will take to use the funds from the Energy Support Package and enable the country’s energy transition.

“Russia’s war of aggression in Ukraine has led to significant increases in prices for households, including energy bills. The European Union is a loyal friend and partner of Bosnia and Herzegovina, and the Energy Support Package has been designed to assist this country meet the current challenges. The most vulnerable families will receive more than two thirds of all the funds allocated to BiH. The rest will go to improving energy efficiency in households and businesses, which comes as an investment into the future and will bring further savings,” said Head of the EU Delegation/EU Special Representative in Bosnia and Herzegovina, Ambassador Johann Sattler.

The Energy Support Package for the Western Balkans was announced by European Commission President Ursula von der Leyen during her visit to the region in October 2022. It allocates a total of EUR 1 billion for the region – EUR 500 million in immediate assistance, and EUR 500 million in medium to long-term support.

Of the EUR 70 million in immediate assistance allocated to Bosnia and Herzegovina, EUR 50 million has been earmarked to mitigate the impact of high prices. The most vulnerable families should receive a cash payment through the FBiH, RS and Brcko District institutions that are responsible for social welfare. A further 10 million euro will be disbursed to improve the energy efficiency of 4000 residential buildings, while another 10 million euro has been allocated for around 400 Micro, Small and Medium Enterprises that are facing challenges as a result of the energy crisis.

The medium to long-term support will be available in grants through the EU’s Economic and Investment Plan (EIP) for the Western Balkans. These grants will support energy transition through support for the construction of renewable energy projects and the upgrading of energy transmission systems, district heating and schemes for energy efficiency for old apartment buildings. It will also support energy security, through improving gas and electricity infrastructure, including interconnectors. The Energy Support Package can be a starting point for BiH’s energy transition and BiH authorities should use the coming period to design projects to fully benefit from the available funds.