Croatia, Bosnia expect to sign Southern Interconnection agreement soon

The agreement, now in its final phase, is a prerequisite for the Southern Interconnection project, which involves building a gas pipeline in BiH connected to Croatia's network. Lakic told the Federation's public broadcaster the signing was planned for April in Dubrovnik and would take place at government level.

He said the full project must be completed by the end of 2027, when a European Union ban on imports of Russian gas is due to take effect. BiH is currently fully dependent on Russian gas supplies.

Lakic said amendments were being prepared to a law on the Southern Interconnection adopted by the Federation parliament last year, after political disputes over whether the project should be run by BH Gas in Sarajevo or a new company based in Mostar, as demanded by the HDZ BiH party. Following mediation by the US embassy, the project was ultimately assigned to a US private company.

“Politics has been removed from the Southern Interconnection. Professionals are now in charge,” Lakic said, adding he did not expect further political obstacles. The project will be implemented through a concession model under existing Federation law.

To ensure financial viability, there are plans to build three gas-fired power plants, including a new facility in Mostar and the conversion of coal plants in Kakanj and Tuzla, with total installed capacity of around 1,200 megawatts. Lakic said large gas consumers were needed to avoid passing infrastructure costs on to households.

US companies AAFS Infrastructure and Energy LLC and Bechtel have expressed interest in the projects. They are also interested in taking over the management of the Sarajevo and Mostar airports. Bechtel could also take part in building a key section of the pan-European Corridor Vc motorway between Sarajevo and Mostar, including a 10-kilometre tunnel through Mount Prenj.