Bosnia’s energy transition undermined by "privileged" investors and corruption risks

The findings were detailed in Sarajevo ahead of the conference "Transparency in Transition: Prevention of Corruption in the Renewable Energy Sector (RES)," organized by Transparency International in Bosnia and Herzegovina (TI BiH).

Srdjan Traljic, the Public Relations Manager for TI BiH, emphasized that preventing corruption in this sector is a critical issue for the country. He noted that over the past decade, legal frameworks intended to support the energy transition have collected significant funds from citizens to encourage renewable electricity production.

According to a comprehensive analysis conducted by the organization, these funds have not always reached their intended targets.

"The analysis showed that a small number of large private investors, privileged producers, occupied most of the dynamic quotas, utilized the bulk of the incentives, and negotiated high purchase prices," Traljic said. "In such a situation, the very goal of the energy transition, to involve as many citizens as possible in renewable electricity production, was rendered meaningless."

This systemic practice, he explained, created significant corruption risks during the allocation of quotas and incentives. The fallout has led to a marked decline in investor confidence and a breakdown of public trust in state institutions.

Traljic warned that these risks have recently migrated toward the grid connection process. With interest in renewables surging, the infrastructure managed by Elektroprenos BiH (TRANSCO) and various distribution companies is struggling to keep pace.

"Distribution companies and Elektroprenos BiH simply do not have the capacity to handle such a large volume of requests," he said, noting that reports of corruption in the connection process have already surfaced.

To combat these issues, TI BiH has proposed two primary solutions:

• Transparent waiting lists: Both distribution companies and Elektroprenos BiH should be legally required to maintain and publicly disclose transparent waiting lists and data on available grid capacity.
• Legislative reform: Addressing the legal loopholes that allow for "project fragmentation."

Traljic highlighted that while new entity-level laws have been adopted, they fail to prevent investors from formally splitting large-scale facilities into smaller units of up to 150 kilowatts. While this no longer provides an advantage for incentives under the new system, it allows developers to bypass concession agreements.

"By splitting projects, some investors avoid concluding concession agreements. As a result, public budgets are damaged, and there is less revenue from public income," he warned.

Despite these legislative changes, substantial sums of money continue to be funneled into renewable subsidies through charges on citizens' electricity bills.

Slobodan Neskovic, representing the Swedish and Norwegian Chamber of Commerce, told reporters that a clear and precise legislative framework is the only way to eliminate arbitrary interpretations of the law. He added that the judiciary must serve as the ultimate deterrent.

"The judiciary plays a key role in combating corruption," Neskovic said. "Efficient prosecutors and courts are the most effective prevention mechanism."

He concluded that simplifying the financing models and the permitting process is essential, warning that overly complex and lengthy administrative procedures inherently create space for corrupt practices.