How the EU Energy Support Package will be implemented – FBiH, RS and Brčko District institutions present their plans

On 20 April 2023, representatives of the European Union in Bosnia and Herzegovina and the Ministry of Finance and Treasury of Bosnia and Herzegovina met in Sarajevo with representatives of the relevant institutions of the Federation of BiH, Republika Srpska and the Brčko District of BiH, who presented to the media the methods and criteria for disbursement of funds, including the expected number of beneficiaries and the deadlines for the implementation of support under the EU Energy Support Package.

Immediate assistance to Bosnia and Herzegovina totals EUR 70 million, of which EUR 50 million are to assist vulnerable households, while the remaining EUR 20 million are allocated to support energy efficiency improvements. Authorities in the Federation of BiH, Republika Srpska and the Brčko District of BiH will work on the distribution of funds to end beneficiaries through Entity ministries and the Entity Environmental Protection Funds and administrative units of the Brčko District.

“The European Union has secured financial assistance to the citizens of Bosnia and Herzegovina to tackle the impacts of soaring prices, and the Energy Package offers support for energy efficiency improvement projects, as an investment in the future of this country. It is now up to the relevant government institutions in Bosnia and Herzegovina to ensure that this support reaches citizens, households and companies, and to fully implement this package. At the same time, the implementation of this package will provide important benchmarks for future direct EU budget support to Bosnia and Herzegovina,” said Stefano Ellero, Head of Cooperation with the EU Office in Bosnia and Herzegovina.

“As soon as the payment is made, the BiH Ministry of Finance and Treasury will transfer the funds to Entity institutions and Brčko District. The contribution of the BiH Ministry of Finance and Treasury involves technical and operational activities, including guarantees to the European Commission that the disbursement of funds will comply with the rules of stable and balanced financial management. The Energy Support Package has an additional element of importance since its successful implementation will also mean a recommendation to use budget support instruments in other areas as well,” stressed Sehija Mujkanović, Assistant Minister with the BiH Ministry of Finance and Treasury.

The component in support of vulnerable households to overcome the impacts of the energy crisis in the Federation of BiH will be implemented by the FBiH Ministry of Labour and Social Policy, while in Republika Srpska, the RS Ministry of Health and Social Protection will be in the lead on this component. Components related to energy efficiency support for households and micro, small and medium enterprises will be implemented by the FBiH Environmental Protection Fund and the RS Environmental Protection and Energy Efficiency Fund. All three components in the Brčko District of BiH will be implemented by the competent departments of the Government of the Brčko District. All institutions will submit information to the Ministry of Foreign Trade and Economic Relations of BiH, which, by the decision of the BiH Council of Ministers, is in charge of implementing and reporting on the implementation of the Action Plan, which maps the activities that BiH plans to implement during the implementation of the Energy Support Package.

Vladimir Makarić, Assistant Minister with the RS Ministry of Health and Social Protection, explained that support for vulnerable households will be implemented through public calls and that it is estimated that between 60.000 and 80.000 households will receive support, from around 32 million KM available for this component in Republika Srpska. Adnan Tatar from the FBiH Department for EU integration, said that in the Federation BiH 64 million KM have been allocated for this component, to provide for around 109.000 households, while categories of beneficiary households will be determined by the Expenditure Programme adopted by the Government of the Federation, and that applications will be submitted based on a public call. The Mayor Zijad Nišić, stated that around 12,500 citizens would potentially be covered by this component in Brčko District of BiH.

Zoran Lukač, Assistant Director for Project Management and International Cooperation with the RS Environmental Protection and Energy Efficiency Fund, as well as Tatar and Nišić, explained that the funds for improvement of energy efficiency will be available to implement measures such as replacing the building cladding or heating and cooling systems for the purpose of improving energy efficiency. The funds will be distributed through public calls and implemented by the entity funds for the protection of the environment, as well as the Brčko District Government.

Although the EU Energy Support Package for Bosnia and Herzegovina will be fully implemented by the relevant domestic institutions, the European Union will continue to support Bosnia and Herzegovina through technical assistance and audits of the expenditure of funds.

The President of the European Commission, Ursula von der Leyen, announced the Energy Support Package for the Western Balkans in late October last year, at the beginning of her visit to the region. The value of the total package amounts to one billion Euros in grants, including EUR 500 million intended as immediate assistance to the region. An additional EUR 500 million in grants is intended as medium- and long-term support for investments in energy efficiency and energy independence, through the improvement of gas and electric infrastructure and interconnectors, including LNG (liquefied natural gas).