TPP Stanari “First ‘new generation’ TPP in SEE”

Location: about 70 km east of Banja Luka and 25 km west of Doboj

Government of Republika Srpska made decision on construction in May Concession on 30 years given on February to “EFT-mine and TPP Stanari” (merging on January ) – BOT model (build-operate-transfer). 5 years period planned for construction is included in the concession period. Concession fee is 3,6% of total income. Concession can be transferred to third parties. Government made decision that TPP is project of ‘public interest’. TPP

local from Stanari open-pit coal mine (9,1 MJ/kg, humidity 49%, sulphur 0,13%) Concession on coal mine is given on May to “EFT GROUP – Lignite mine Stanari”. Concession fee for mine is 3,4% of total income. Exploitation rate is about 3,5 mil tonnes/year (max 50 years of exploitation at this rate). COAL

1st scenario MW (3 TWh/year) Coal consumption: 375 tonnes/hour (about tonnes/year) One unit TPP Gross efficiency: 41-43% Planned investment is 666,1 mil EUR. No tendering procedure, but direct offer. France’s Alstom has been chosen as the best bidder for the construction. EBRD was considered to cover about 25% of total costs. Expected time for completion of TPP is during 2012

The feasibility study for the Stanari TPP has been revised to set the following key parameters: The generation unit has an installed capacity of 300 MW Net Power Capacity 265 MW Gross efficiency 38.5 % Expected annual Power Plant Production is MWh (at base-load operation) May EFT made deal with China’s Donfang Electric Corporation to build the plant. The plant is expected to enter commercial operation in the second half of “The total value of the [TPP] project is EUR 500 million, of which EFT will finance 25% from own equity and the rest will be covered from credit by a consortium of Chinese and European banks”, said EFT Group Chairman, Vuk Hamovic. 2nd scenario present

Environment and public relations CO2 emission: 1,010 kg/kg of coal EIA for TPP “BiH signed Kyoto, but to Annex I, so there is not need to cut GHG emissions” No direct discharge of technical, sanitary, cooling or atmospheric water from TPP --> it will be used for transport of ash. flue gas treatment system, indirect dry cooling system, process water and management system Public relation: learning from few bad experiences of investors in power sector, EFT putted a lot of effort to greenwash the project, like donation of library, computers and basketball court to primary school in Stanari, advertisement with famous comedians, etc.

IFIs involvement for 1st scenario EBRD was considered to cover about 25% of total costs. on Nov we send letter to EBRD “It is of great concern to us that the EBRD is considering a loan for Energy Financing Team (EFT), a company which is under continued investigation by the UK Serious Fraud Office (SFO) regarding its activities in Bosnia-Herzegovina.” “Therefore we request the EBRD to clearly and publicly state that no loan will be considered for Energy Financing Team until the investigation is concluded and EFT is either cleared or found guilty.”

“Can the EBRD confirm that EFT won the contract for Stanari as a result of open and transparent tender and licensing procedures?” “We would like to know how the EBRD plans to ensure that the project forms part of a coherent energy strategy approved by all relevant bodies at both the entity and state level?” “What are the expected economic impacts on the region and the country? What is the planned profitability of EFT on this project? Does the EBRD already have some idea what are the concession and tax payments to be paid by EFT?” “According to the project EIA the yearly CO2 emissions from the power plant would be tonnes, constituting a significant new source of emissions in an era when significant reductions are needed.”