Bosnia and Herzegovina’s state-owned power utility ERS has arranged an additional €2 million in short-term financing amid liquidity pressure linked to the shutdown of the Ugljevik coal-fired power plant. The new borrowing brings total fresh secured funding within days to €7 million. The latest arrangement is intended to support immediate operating requirements.
The financing is structured as an overdraft facility. Interest and associated costs are estimated at around €120,000. ERS also has a separate €5 million financing arrangement aimed at settling overdue supplier payments.
ERS has borrowed more than €50 million since the beginning of 2026. The additional reliance on external financing comes as domestic generation is under pressure. The immediate operational issue is production suspension at RiTE Ugljevik, one of Republika Srpska’s largest electricity producers.
The plant has suspended production due to insufficient coal supplies, reducing baseload generation available to the system. RiTE Ugljevik is also dealing with liquidity problems, including blocked bank accounts. The government has granted a 90-day delay for overdue tax payments.
Coal supply and tariff debate
Coal security remains the central unresolved issue affecting output. Authorities previously spent more than €120 million related to the Ugljevik East 2 concession in efforts to secure long-term supply. Mining difficulties have continued, and the plant has struggled to maintain regular output.
The financial strain has also revived debate over electricity tariffs. Reports have suggested household prices could rise significantly, although no increase of the scale discussed publicly has been formally confirmed. Short-term loans are intended to help ERS meet immediate obligations while coal shortages and weak plant availability persist.
The combination of coal shortages, limited plant availability, and accumulated liabilities leaves ERS’s underlying financial position exposed.