Gacko Thermal Power Plant

From Global Energy Monitor

Gacko Thermal Power Plant is a 300-megawatt (MW) coal-fired power station located near Gacko in Bosnia-Herzegovina. A second 350 MW unit was being considered at the same location.


The undated satellite photo below shows the power station in Gacko.

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The 300 MW plant began operating in 1983, and is owned and operated by Elektroprivreda Republike Srpske (ERS). It is a supercritical power station and sources 1.8 million tonnes of lignite coal a year from the nearby Gacko coal mine, which is operated by Gacko Mine and Power.[1]

Old Expansion plans

In 2006, the major Czech utility company CEZ reached an agreement with ERS to form a joint venture company, Nove Elektrarne Republike Srpske (NERS), which would upgrade the existing plant, built a second unit at the power station and expand the nearby Gacko coal mine. In return for investing €1.5 billion in the project, CEZ gained a 51% stake in the new joint venture company.[1]

In January 2009, CEZ pulled out of the deal stating that it was because of "repeated breach of the implementation contract by its partners in Bosnia and Hercegovina."[2]

In March 2022, the environmental permit for the mine project was cancelled by the District Court in Banja Luka. A lawsuit had been filed by the Center for the Environment after the mine's Environmental Impact Study was initially approved by the Ministry of Spatial Planning, Construction and Ecology.[3] The power plant expansion is presumably shelved.

2012 Energy Strategy

The proposed Gacko units were mentioned as one of two possibilities in the "2012 Energy Strategy of Republic of Srpska up to 2030." In this document, the project was described as a 300 MW replacement unit for the current Gacko station. The other possibility was that the lifetime of Gacko 1 would be extended to 2035 rather than 2020.[4]

Arbitration decision

In 2014, an arbitration panel imposed an obligation on Elektroprivreda RS to purchase from CEZ its equity stake in Nove Elektrane Republike Srpske for 2 million euros, plus contractually defined interest. In addition, CEZ was to receive the same amount of 2 million euros plus late-payment interest as liquidated damages, bringing the total amount that the Czech company will receive to approximately 7.5 million euros.[5]

In February 2015, the Minister of Mining and Energy of Republika Srpska in Bosnia and Herzegovina, Petar Đokić, restated the country's plans to build a new 300 MW thermal power plant in Gacko.[6]

MoU agreements

In May 2015, Bosnia's Serb Republic said it planned to sign a memorandum of understanding with China’s Dongfang Electric Corporation (DEC) for the construction of a 350 MW unit at Gacko plant. Construction on the new unit was expected to begin in spring 2015.[7] Dongfang would potentially secure 85% of the credit funds for the construction of the unit, possibly through a Chinese state-owned bank.[8]

In April 2017, the Bosnia Minister of Industry, Energy and Mining signed a MoU agreement for construction of Gacko 2 with Chinese companies China Investment & Development Company and China Machinery Engineering Corporation.[9]

In December 2017, state-owned utility Elektroprivreda Republike Srpske signed a MoU for the plant with China Machinery and Engineering Corporation (CMEC) and Emerging Markets Power Fund.[10]

Stranded asset analysis

Analysis of the project by economist Damir Miljević found that although the official feasibility study for Gacko II claimed it would generate profit of around EUR 23 million per year, more realistic input data on price and demand would lead to a loss of minimum EUR 1.15 million per year.[10]

New Expansion Plans

In August 2022, shelved expansions plans appeared to be revived. Due to energy security concerns in light of the war in Ukraine, reliance on coal was once again on the rise in the western Balkans.[11] According to the Government of the Republic of Srpska, private Czech company Witkowitz was interested in building a 350 MW Unit 2 at the Gacko plant. A Memorandum of Understanding was to be signed "soon", but there was no apparent news on the memorandum as of November 2022. The investment was valued at EUR 521 million.[12]

Expansion Project Details

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