A financing package has been signed for the development of a 160-megawatt hydroelectric plant in Bosnia and Herzegovina, featuring the longest-ever insurance coverage provided by Sinosure.

Export-Import Bank of China is providing a €190 million (US$214.9 million) loan for the  Dabar Hydroelectric Power Plant, which is insured for 20 years by China Export & Credit Insurance Corporation (Sinosure).

The facility, located in the Republic of Srpska, is Central and Eastern Europe’s largest such project to date. It is owned by Hidroelektrana Dabar, and will be built by China Gezhouba Group. It will be part of the planned Gornji Horizonti hydropower complex, which will include two smaller hydro plants.

China Gezhouba won an international tender, which included proposals for 85% debt financing. HPP Dabar will be owned and operated by Hidroelektrane na Trebisnjici (HET), which is itself majority-owned by state-owned power utility Elektroprivreda Republike Srpske (ERS). Exim Bank of China was advised in the deal by law firm Milbank. 

"The transaction presented a number of challenges as it required meticulous navigation of rigorous compliance requirements for the Republic of Srpska and Bosnia and Herzegovina and managing potential implications arising from the country’s proposed accession to the European Union, while also satisfying Sinosure policy requirements,” says Aled Davies, global project energy and infrastructure finance partner at Milbank in Tokyo.