Bosnia and Herzegovina Energy Hungary

Hungary could fund Bosnian energy projects in wake of German pullout

| 2023-08-28 2 min read

Hungary could fund Bosnian energy projects in wake of German pullout

Reading Time: 2 minutes

Hungary will send money to Republika Srpska (RS) to cover funds that Germany withdrew earlier this year due to the separatist policies of President Milorad Dodik, according to the leader of the majority-Serb entity of Bosnia and Herzegovina (BiH).

After visiting Budapest last weekend, Dodik held a press conference and told reporters that the Hungarian government will send EUR 118mn to RS. The Hungarian government has been providing assistance to the Bosnian Serbs, including a similarly-sized, favourable, loan to BiH through Hungary’s official export bank Eximbank.

A pledge of EUR 110mn in economic development funds from Hungarian public money was also made in November 2021, although none of this funding has materialized yet, according to Hungarian media.

Of this, EUR 70mn will reportedly be used to compensate for the funds that were cancelled by Germany, while EUR 18mn will go towards agricultural machinery. It is not clear whether this is the funding previously promised by the Hungarian state.

Energy projects may still go ahead

Prime Minister’s Office Minister Gergely Gulyas told reporters at a press conference that ‘since the Germans left (RS) better and better economic opportunities have opened up, and it may actually be worth investing even more.”

BiH ambassador to Hungary, Biljana Gutic-Bjelica, informed Bosnian Serb TV that “previously discussed projects have been confirmed, and new projects have been agreed upon. A council, led by Orban and Dodik, will oversee these projects, “highlighting their significance”, she commented.

Local Hungarian media reported that Dodik has asked Orban for funding for the planned hydroelectric plant in Mrsovo, south-eastern Bosnia, and the ongoing Ugljevik 3 thermal power plant project, even offering co-ownership in return.

Dodik closer and closer to Orban

Speaking at the press conference, Dodik did not mention recent charges brought against him by the Federal Prosecutor’s Office in BiH for snubbing decisions made by BiH High Representative Christian Schmidt.

Dodik did however namecheck the leaders he had met during his trip to Hungary: Turkish President Recep Tayyip Erdogan, Azerbaijani President Ilham Aliyev, and Serbian President Aleksandar Vucic.

The RS leader said the RS has problems, but they are being solved by “sharing the burden with friends”.

He added that “this year, we have settled obligations of BAM 740mn (EUR 378. 36mn) and withdrawn money from the market to the tune of BAM 350mn (EUR 178.95mn).”

BiH Presidency Chairwoman Zeljka Cvijanovic was also present and added that she is grateful to Hungary for understanding the situation in the country and that cooperation between RS and the ORban government is ongoing.