New Construction market report from Business Monitor International: "Bosnia-Herzegovina Infrastructure Report Q1 2013"
Boston, MA -- (SBWIRE) -- 02/20/2013 -- BMI View: There is continued uncertainty for the construction and infrastructure sector in Bosnia and Herzegovina (BiH), with the eurozone crisis dampening confidence in the sector. Tensions between ethnic groups in Bosnia continue to weigh on the country's EU accession prospects, development potential and risk profile. Construction industry value is forecast to stand at US$0.7bn in 2013, rising only slightly by 2021, to US$1.2bn. Average year-on-year growth between 2013 and 2021 is expected to sit at 2.8%.
Key factors contributing to growth:
- Bosnia's state-owned utility Elektroprivreda BiH (EPBiH) shortlisted international companies and consortia for the second phase of participation in the development of a coal-fired unit at the Tuzla power plant. The winning company or consortia will work with EPBiH on the construction of the 450 megawatt (MW) unit at the latter's Tuzla plant, which annually generates approximately 3,100 gigawatt hours (GWh) at six units. The new unit is likely to involve a construction cost of nearly BAM1.5bn (US$997mn).
- Bosnian power utility Elektroprivreda Republike Srpske (EPRS) and Germany-based RWE's subsidiary RWE Innogy signed a joint venture (JV) deal for the construction of four run-of-theriver power plants on the Drina River of Bosnia. EPRS will hold a 40% stake in the JV. The hydropower plants, involving an estimated construction cost of EUR460mn (US$596.27mn), will have a combined power generation capacity of 210MW. The construction of the plants is expected to start from 2014, with the plants likely to become operational in 2019, Heil added. Once operational, the plants must produce 750GWh every year.
- Bosnia's Republic of Srpska signed a deal worth EUR180mn (US$230.4mn) with a consortium of companies from FYR Macedonia and Bosnia for the construction of a 36km section of motorway to form part of a 75km motorway linking Banja Luka with the Bosnian section of the pan-European highway, Corridor VC, in Doboj. The project to build the motorway between the northern towns of Prnjavor and Doboj will be financed with a EUR150mn (US$192mn) loan granted by the European Bank for Reconstruction and Development.
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Bosnia has secured a fresh two-year Stand-By Arrangement (SBA) from the International Monetary Fund (IMF), which had previously suspended loans as a result of slow progress on economic reforms and a lengthy spell of political stalemate. Although the SBA has improved short-term fiscal stability, we warn that with confidence intrinsically tied to the bailout programme and given the anaemic pace of reform, investor sentiment could turn sour quickly should the IMF suspend any outstanding loan tranches over the next few years.
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