Croatia Pressures Bosnia Over Lost Power Plant Investment

Croatia's power company, HEP, has written to Bosnia's tripartite presidency, state government, foreign ministry and attorney general, demanding resolution of its pre-war investment in the Gacko power plant in eastern Bosnia, either through amicable settlement or by international arbitration.

Officials from the attorney general's office told BIRN on Wednesday that Croatia would almost certainly press an international lawsuit unless the government of Bosnia's Serb-dominated entity, Republika Srpska, which now runs the Gacko power plant, reaches an amicable settlement.

The letter, obtained by BIRN, settles the Croatian claim at around a hundred million euros. The date on the letter says it was sent on May 11 but Bosnian officials remained quiet about it until Tuesday, when some media reported about it.

The claim derives from before the breakup of former Yugoslavia, while Bosnia and Croatia were still part of the same country.

According to the letter, the former Yugoslav Republic of Croatia "invested funds for the construction of energy facilities, among others and specifically for a thermal power plant with accompanying coal mine facilities in Gacko (RiTE Gacko), located in territory that is now part of the Bosnian Serb entity of Republika Srpska".

Construction of the power plant facilities was completed in 1983 and their regular operation commenced on 1 January, 1985.

According to the letter, the agreement signed in 1986 established that this investment would be repaid through "one-third of produced coal, electricity and power", which HEP would receive for at least 25 years.

Despite war breaking out in Croatia in 1991 and then in Bosnia in 1992, RiTE Gacko continued to deliver electricity to HEP until...