China Development Bank pledges $42 million loan for 34.6 MW Ulog Hydroelectric Dam Project

In November 2009, the Government of the Republic of Srpska granted a 33.5-year concession to EFT HE Ulog d.o.o — a project company and special purpose vehicle that is owned by a private British company called Energy Financing Team (EFT) Group — for the construction and operation of the Ulog Hydropower Plant Project (HPP) on the Neretva river. The concession period includes a 3.5 year preparatory period and a 30 year construction and operation period. The concession is extendable by an additional period of 15 years. Then, on June 20, 2012, EFT Group and Sinohydro Corporation Limited signed an EPC contract and it was announced that the CDB would issue a loan to EFT HE Ulog d.o.o. to partially finance the EPC contract. The Ulog Hydroelectric Dam Project involves the construction and operation of a hydropower plant with a total capacity of approximately 34.6 MW. The electricity will be fed into the grid over two 110 kV single system overhead transmission lines (Ulog OHTL) to the regional 110 kV OHTL Gacko-Nevesinje. The purpose of the project is the generation of green electricity through the construction and operation of a new greenfield hydropower plant with two main generating units — each having the installed capacity of approximately 17.22 MW — and one additional small generating unit with an installed capacity of 0.178MW, so an expected total capacity of approximately 34.618 MW. The project site is located in the upper course of the Neretva river, downstream from the Ulog settlement within the municipality of Kalinovik. The coordinates of the powerhouse are N 43.4756497° and E 18.3286871°. The project includes an Arch dam at Nedavić section, which is 53.00 meters high; a reservoir with a total storage capacity of 6.44 x 10⁶m³, which is designed for the normal water level elevation of 641.00 m asl; a derivation designed for the installed flow capacity of 35.00 m³/s; a powerhouse of the hydropower plant with two vertical Francis turbine units designed for the installed discharge of 2x17.5 m³/s, each having the installed capacity of 17.22 MW; 110 kV step up transformers located next to the powerhouse; a 110 kV switchyard located at the platform above the powerhouse of HPP Ulog; and a Small Hydro Power Plant (SHPP) located downstream near the dam, at the discharge of the guaranteed ecological flow, with an installed capacity of 0.178 MW. The electricity will be fed into the grid in two ways: (a) from the powerhouse over two 110 kV single system over head transmission lines (Ulog OHTL) which will be built to the regional 110 kV OHTL Gacko-Nevesinje. The length of the new Ulog OHTL system will be approximately 20 km. Electricity generation of the SHPP will be monitored by means of invoices/reports of the local distribution grid operator, based on meter readings at the point of delivery to the grid at “Jazici” substation. Electricity consumption will be provided through the same lines and will be monitored by the same meters. Additional consumption through a 10 kV back up supply line will be monitored by means of electricity invoices. The Ulog Hydroelectric Dam Project has been registered under the Clean Development Mechanism (CDM) in accordance with the criteria of United Nations Framework Convention on Climate Change. The CDM registration procedure confirmed that, by displacing fossil fuel-based electricity with electricity generated from a renewable source, the HPP Ulog project has the potential to result in reductions of 87,846 t CO2eq emissions per year that are real, measurable and give long-term benefits to the mitigation of climate change. Sinohydro Bureau 7 Co., Ltd. (中国水电七局) — a subsidiary of Sinohydro Corporation Limited — is the EPC contractor responsible for implementation of the Ulog Hydroelectric Dam Project. At the end of 2011, EFT commenced full-scale construction activities. It built 5 kilometers of access road on both banks of the Neretva River. It also commenced work on transmission infrastructure for the future Ulog HPP. A 35kV transmission line, measuring 16 kilometers in length, was also built by Eling, a local, Teslic-based company. The line will be used to supply electricity to the construction site. Then, in September 2017, Sinohydro Corporation Limited signed a revised EPC contract with EFT HE Ulog d.o.o.. Shortly thereafter, in March 2018, EFT HE Ulog d.o.o. signed a contract with Stucky Balkans — a member of the Swiss Gruner Group — for project consultancy and supervision services. Then, a project kickoff meeting between EFT Group, Stucky Balkans, and Sinohydro Bureau 7 Co., Ltd. (中国水电七局) took place on October 24-26, 2019 in Belgrade. The EPC contract between Sinohydro Bureau 7 Co., Ltd. and EFT HE Ulog d.o.o. entered into force on December 20, 2019. However, this project proceeded without funding from China Development Bank. A 2019 Republic of Srpska Concessions Committee report revealed that “negotiations with … CDB for obtaining financial resources did not yield results, and the concessionaire engaged its own financial resources to continue and intensify the construction of the facility.” EFT Group also confirmed to Radio Slobodna Evropa that "no agreement has been reached on financing the project with financial institutions from the People's Republic of China." The project is expected to achieve its commercial operation date in 2023.

Additional details

The Chinese title of the project is 波黑ULOG水电站项目. The Srpski project title is izgradnju HE Ulog. Some sources refer to the total cost of the project as EUR 70 million and other sources refer to EUR 65 million.

Number of official sources

14

Number of total sources

27