The war in Ukraine and reactionary Western sanctions imposed on Russia have sharpened the focus on energy security. European cities and regions have suddenly had to consider reducing their reliance on Russian fossil fuels and the viability of alternative energy supplies.
In Bosnia and Herzegovina (B&H), which sources all of its natural gas from Russia, decades of investment have focused on expanding the use of natural gas in electricity generation, industry and district heating.
Edin Forto, the prime minister of Canton Sarajevo, B&H’s capital region, says the conflict has made him consider whether it is best for the Balkan country to “skip the whole expansion of gas” and shift towards newer technologies, such as heat pumps and solar energy.
“Up until recently, I was a big proponent of expanding our reliance on natural gas, because we already have the infrastructure and can build on it,” he tells fDi, noting the importance of natural gas in the transition to renewable energy sources.
“But now I’m not sure. This is a much bigger decision than Canton Sarajevo’s [as it is made by B&H’s national government]. I think we have to consider our best option and whether to diversify our gas sources.”
A proposed project to build a gas pipeline connecting B&H with Croatia’s gas network could enable some diversification. However, the planned route, which will run from the Croatian city of Split to Travnik and Mostar in B&H, is not expected to commence operations until 2024.
Mr Forto is hopeful this new connection may provide a route for liquified natural gas to come from sources other than Russia. But in the immediate term, Russian natural gas looks likely to remain in use.
B&H’s major gas importer Energoinvest extended a deal with Russia’s Gazprom on May 31 to supply natural gas up until the end of 2022, when a new contract will be negotiated.
China-backed thermal electric plant
Another alternative to Russian gas is the expansion of B&H’s existing coal-fired power plants, which currently generate 70% of the Balkan country’s electricity. But major projects have faced hurdles as banks have turned away from financing coal projects.
For instance, a China-backed deal to help local electric utility EPBiH modernise and expand its 715-megawatt coal-fired power station in the city of Tuzla has stalled for years. US conglomerate General Electric, which was due to provide equipment for the $1.1bn coal plant, withdrew from the project in July 2021 amid opposition from the EU.
For Mr Forto, these developments underline the importance of shifting towards renewables. “We need much more investment in sustainable energy sources,” he says.
Beyond issues of energy security, Mr Forto is keen to stress Sarajevo’s growing IT sector and his aim to boost investment in the city’s transportation, technology and creative sectors.
“Sarajevo used to be the regional hub, where everyone wanted to come and create,” says Mr Forto, noting the city’s bustling community for fine art, theatre and film production before the Bosnian war, which lasted from 1992 to 1995.
“We need to bring that back with investment in cultural infrastructure and incentives for creative people to move to Sarajevo,” he adds. The cultural scene is showcased at the Sarajevo film festival, which attracts creatives from across Central and Eastern Europe to the city every year.
“The festival has succeeded in bringing the industry back to Sarajevo for at least a week in the summer,” says Mr Forto. “We need to have that year-round. To create this environment, we have to make sure that Sarajevo is an exciting city to live in.”
This article first appeared in the June/July 2022 edition of fDi Intelligence. Read the online edition of the magazine here.