Bosnia and Herzegovina could face an arbitration claim worth about €700 million at the International Centre for Settlement of Investment Disputes (ICSID) in Washington if authorities fail to resolve long‑standing debt disputes tied to pre‑war investments by a Slovenian power company, officials said.
The case stems from investments made by Elektrogospodarstvo Slovenije (EGS) in the coal mine and Ugljevik thermal power plant in what is now the northeastern Republika Srpska (RS) entity during the former Socialist Federal Republic of Yugoslavia. Under the original arrangement, the Slovenian company financed construction in exchange for a share of electricity output. Deliveries stopped in the early 1990s after the outbreak of war.
RS authorities have until Feb. 6 to reach a settlement with EGS to avert the arbitration, a government source said. If no deal is reached, the ICSID process, currently suspended to allow negotiations, could resume.
EGS has already pursued legal claims in two forums, seeking compensation for its investments and undelivered power. In a commercial arbitration in Belgrade, a tribunal ruled in favour of the Slovenian company and ordered the Ugljevik plant, majority‑owned by the RS electricity utility, to pay about €190 million in damages and interest.
Under ICSID rules, the larger claim is formally lodged against the state of Bosnia and Herzegovina because the centre’s mandate applies only to sovereign states. EGS has not publicly commented on the status of negotiations.
Officials in the RS government said they were close to an agreement but did not provide details. Economic analysts warned that regardless of the outcome, the financial burden could ultimately fall on consumers and businesses through higher electricity prices or taxes.
The Ugljevik plant supplies about 30% of electricity in the RS and has also been grappling with coal shortages. Electricity tariffs for households are set to rise by about 10% from Feb. 1 due to increased grid charges, adding pressure on consumers.