– Srpska guaranteed the loan for HPP “Bistrica”
– The government sought the approval of the Council for State Aid, but she did not wait for his decision
– Ristić: Any state aid granted without a decision of the Council is illegal
BANJALUKA – The Government of the Republika Srpska gave state guarantees to the Chinese “Exim Bank” for a loan of 75 million euros with which “Hydroelektrane na Drina” will finance the construction of hydropower plants on the Bistrica River near Foča, without the consent of the Council for State Aid, the portal reveals. CAPITAL.
More precisely, the Government sought the consent of this body, but did not wait for its decision, which it was obliged to do by law, but issued a guarantee to the Chinese that it would pay all obligations if the company within the “Electricity of Republika Srpska” was unable to do so.
Even if the Council subsequently assesses that it is a legal state aid, consent cannot be given retroactively, that is, on an already given guarantee, so that the financing of this entire project is called into question.
The Council for State Aid confirmed to us that on December 2, the Ministry of Finance of Republika Srpska received an application for state aid related to the aforementioned loan.
„The Council has not yet made a final decision regarding the aforementioned application. The deadline for making a decision is 60 days from the receipt of a complete and orderly application. Also, the Council requested the submission of additional documentation in the specific case“, he confirmed for CAPITAL expert advisor for state aid Aleksandar Ristić.
He notes that according to Article 12 of the Law on the State Aid System in BiH, the provider of state aid can grant state aid to the beneficiary only after the Council approves it.
„Any state aid awarded contrary to Article 12 of the law, i.e. awarded without a decision of the Council, is illegal and subject to repaymentRistić said.
Knowledgeable source CAPITAL– and does not rule out the possibility that this behavior of the Government of Republika Srpska provokes a reaction from the Energy Community.
He recalls the case of “Elektroprivreda BiH” to which the Government of FBiH gave guarantees for a loan from the same “EXIM” bank for the construction of Block 7 in Tuzla, which is why the Energy Community initiated proceedings against BiH.
„By issuing the aforementioned guarantee, the Government of the RS will almost certainly provoke a reaction from the Energy Community, which will stop the aforementioned project due to the violation of an international agreement – the Agreement on the Establishment of the Energy Community“, he assesses.
Frivolous and childish
Economist Igor Gavran assesses that the Government’s behavior is frivolous and childish.
„We can speculate whether this is frivolity or they know in advance that they do not meet the criteria and will receive a negative opinion, so they avoid it“, says Gavran.
According to him, if at some point the implementation of the project is suspended, it is clear that it will be to the detriment of Republika Srpska, and certainly not to the creditor, who will be protected in any case.
„It is impossible to forecast all possible scenarios, but certainly this behavior unnecessarily jeopardizes projects and creates affairs that no one needs. The real intentions and character of these contracts are also called into question“, Gavran concluded.
Established practice of breaking the law
By the way, this is not the only case of the Government ignoring its legal obligations.
The “Olympic Center of Jahorina”, which is often blocked due to debts, has repeatedly received guarantees from the Government of the RS for loans with which they patched financial holes and which could eventually be returned by the citizens of the Republika Srpska.
The approval of the State Aid Council was not requested for any of these loans, the Council confirmed to us.
Portal Spin.info he wrote in June 2023 that the contract for the construction of the Banjaluka – Prijedor highway was drawn up in favor of Chinese investors and that the Council for State Aid was ignored here as well.
This body can ex officio examine the legality of state aid, but as far as we know, in this case there is a tacit political agreement not to do so.
The reason for this can be found in their organization and method of appointment.
By law, the Council consists of eight members. Three representatives are appointed by the Council of Ministers of BiH, two representatives are appointed each by the Government of Republika Srpska and the Federation of BiH, and one is appointed by the Government of Brčko District of BiH.
Although they should be independent in their work, they are under great external pressure to which some of the members are not immune.
We remind you that the establishment of this body and the adoption of the Law on the State Aid System are prescribed by the Agreement on Stabilization and Association of Bosnia and Herzegovina.
The Council came into the public’s focus in 2023, when it overturned state decisions related to exempting companies from paying tolls on fuel used by mining machinery.
Not only was this form of aid abolished, but the ITA was asked to return the over 30 million marks that they had saved in this way to the companies.
Almost every procedure that was initiated before the Council in connection with the guarantees of the Government of Republika Srpska ended with the determination of illegal state aid.
Guarantees represent a specific instrument for granting state aid, where state aid is reflected in the fact that the state assumes the risk associated with the guarantee, and for that risk acceptance by the state, an appropriate fee, a market premium, should be paid.
RS Guarantee Fund
It is interesting that Republika Srpska has an institution for providing guarantees, namely the Guarantee Fund. However, due to legal restrictions, its role is minimized.
Namely, according to current legislation, they can issue guarantees in the maximum amount of up to 1.5 million KM.
Until the publication of this text, we did not receive an answer from the RS Ministry of Finance as to whether the Government calculates this fee.
Back in 2021, the Council canceled the guarantees given by the Republika Srpska to “Elektroprivreda RS” for a loan for the purchase of shares in the company “Ruding” Ugljevik and for the overhaul of the thermal power plant in Gacko.
The council came to the conclusion that the state aid granted in the form of a guarantee to the parent company ERS is not in accordance with the Law on the state aid system in BiH.
ERS was ordered to pay the market premium for the issued guarantee within 90 days and submit proof of this to the Council.
In the last few years, the Government of Srpska has guaranteed the repayment of the RS Health Insurance Fund loan in the amount of 35 million KM, as well as the Olympic Center “Jahorina” in the amount of 55.6 million KM.
Also, in 2021, Republika Srpska was the guarantor for the indebtedness of “Gradska Toplana” from Doboj in the amount of 1.5 million KM, but also for the hospital from Gradiška for a loan of 4.94 million KM. We were unable to obtain information on whether the Council’s consent was sought in these cases.
By the way, according to the decision of the Government, which was confirmed by the National Assembly of the Republic of Srpska, Srpska will give guarantees in the amount of 800 million marks in the next year.
In general, the total exposure of Republika Srpska in terms of issued guarantees, according to preliminary data until October 31 of this year, was 1.28 billion marks. The balance of debt based on these loans amounts to 919.75 million marks.
In accordance with this decision, it is planned to provide guarantees for liabilities in the trade and tourism sector, environmental protection, health and other subjects of local self-government and public sector institutions.
Downloading parts of the text or the text as a whole is allowed, but with a mandatory reference to the source and a link to the original text at www.capital.ba
Source: capital.ba
