Bosnia and Herzegovina, ERS will issue bonds on the Vienna Stock Exchange28.Oct 2021.
The Minister of Finance of the Republic of Srpska (RS) Zora Vidovic said that state-owned power utility ERS will issue bonds on the Vienna Stock Exchange.
Minister Vidovic said that the bond issue is good for the company, rejecting the allegations of providing state guarantees for the issue. These are the bonds in the amount of 140 million euros, intended to provide funding for the construction of hydropower plants Dabar and Bistrica, for which ERS has already signed contracts with Chinese companies.
Under the signed contracts, ERS is obliged to provide 15 % of the funding in order to start construction works. However, the details regarding the bond issue has not been revealed.
The decision has been criticized by financial experts. According to them, If the money is used to finance a capital investment that is planned in the next 5 to 10 years and the return of investment is up to 50 years, then the Vienna Stock Exchange is not a place to go and borrow short-term funds, because it will be difficult to return them in such a short time.
In December 2019, RS Government signed an agreement worth 100 million euros with Chinese company AVIC for the construction of three hydropower plants on the Bistrica river with combined installed capacity of 34.1 MW. 166 MW HPP Dabar should be built by China Energy Gezhouba Group. Estimated construction cost for HPP Dabar has increased from 180 to over 330 million euros in the past few years.