Czech utility CEZ and Serbian power firm Elektroprivreda RS have signed an implementation agreement to jointly modernize the Gacko I power plant and construct a new coal-fired power plant, to be known as Gacko II, in Bosnia and Herzegovina.
The companies will also expand the mining activities in a mine adjacent to the power plants, which will supply the coal-powered facilities. CEZ said that the investments in the Gacko project will reach around E1.4 billion.
CEZ and Elektroprivreda RS (ERS) will form the joint venture company Nove Elektrarne RS (NERS) to implement the Gacko projects. CEZ will hold a 51% in this company. ERS will invest the Gacko I plant and the coal mine in the company, while CEZ will raise NERS’ share capital to E400 million.
The new coal-fired power plant will have a planned capacity of between 600 and 700MW. The existing facility has a capacity of 300MW.
The planned investment into the construction of the plant in Bosnia and Herzegovina is another step towards the fulfillment of our vision of becoming the leader in the electricity market in central and eastern Europe, said Martin Roman, chairman of the board of directors and CEO of CEZ.
Mr Roman also revealed that the E1.4 billion investment will be the largest foreign investment in Bosnia and Herzegovina to date.