The EU finances the Energy Support Package for BiH with 70 million euros

The European Commission signed and delivered to Bosnia and Herzegovina the Agreement on the financing of the Energy Support Package worth 70 million euros, which will provide assistance to the most vulnerable households in Bosnia and Herzegovina in dealing with rising prices and ensure support for the energy transition.

The first tranche of allocated funds of around 63 million euros requires the approval and signature of the Council of Ministers of Bosnia and Herzegovina. Before the funds are disbursed, BiH is expected to receive a positive assessment from the European Commission on the progress in implementing the Action Plan adopted by the BiH Council of Ministers on December 22, 2022. This Action Plan lists the measures that the local authorities will apply in order to use the funds from the Energy Support Package and enable the country’s energy transition.

“Russia’s war of aggression against Ukraine has led to a significant increase 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 is designed to help the country face its current challenges. The most vulnerable families will receive more than two-thirds of all funds allocated to BiH. The rest will go to improving energy efficiency in households and the private sector, which represents an investment in the future and brings additional savings,” emphasized the Head of the EU Delegation and EU Special Representative in Bosnia and Herzegovina, Ambassador Johann Sattler .

The package of energy support for the Western Balkans was announced by the President of the European Commission, Ursula von der Leyen, during her visit to the region in October 2022. It allocates a total of one billion euros for the region, half a billion euros in immediate aid and half a billion in medium- and long-term support.

Of the EUR 70 million in current aid allocated to Bosnia and Herzegovina, EUR 50 million is intended to mitigate the effects of high prices. The most vulnerable families should receive cash payments through social protection institutions in FBiH, RS and Brčko District. An additional 10 million euros will be paid to improve the energy efficiency of 4,000 residential buildings, while another 10 million euros is intended for around 400 micro, small and medium-sized enterprises that are facing challenges due to the energy crisis.

Medium and long-term support will be available through grants under the EU’s Economic and Investment Plan (EIP) for the Western Balkans. These grants will support the energy transition by supporting the construction of renewable energy projects and upgrading electricity transmission systems, central heating and energy efficiency schemes for old residential buildings. It will also support energy security, through the improvement of gas and electricity infrastructure, including interconnectors.

The energy support package can be the starting point for the energy transition in BiH and the local authorities should use the next period to design projects in order to fully utilize the available funds.