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Austria to build 350 mln euro hydro plants in Bosnia

Date: 26-May-03
Country: BOSNIA
Author: Daria Sito-Sucic

The projects would go ahead once Bosnia signs a memorandum proposed by Austria and based on the Kyoto protocol on cutting polluting greenhouse gases, said Michael Scherz, the commercial counsellor at the Austrian embassy in Sarajevo.

"If we have this in place, Austria would finance in a soft loan mostly environmental projects in Bosnia...which will be hydro power projects," Scherz told Reuters in an interview.

The 1997 Kyoto protocol aims to stop global warming through cutbacks in emissions of gases widely believed to cause it.

Scherz said the protocol allowed wealthy countries such as Austria to meet part of their targets by carrying out projects in less developed countries such as Bosnia.

He said Austrian companies had already identified eight possible locations for hydro power plants in Bosnia's two regions, the Muslim-Croat federation and the Serb Republic, and it was realistic to expect up to five stations to be built.

The value of the projects, planned to be implemented over the next four to five years, would be 350 million euro, he said.

Scherz said Bosnian authorities had begun preparations for the agreement, which is expected to be signed by summer.

He said 60-70 percent of the work would be done by local companies in projects that would create a few thousand jobs, stimulating a local economy, poor by Western standards.

"We would like to widen it with other infrastructure projects," Scherz said of Austria's involvement. "This is just the first step."

But he cautioned that Bosnia had to ratify the Kyoto protocol for the plan to go ahead.

Due in part to historical ties and geographical proximity, Austrian firms have been prominent investors in postwar Bosnia. Scherz said businesses had expressed fresh interest in the Balkan state since economic reforms quickened in recent months.

"Everybody is suddenly so interested in Bosnia. The companies that we could not motivate at least to come here to see what is possible suddenly are very interested," Scherz said.

"I think the real big influx (of investors) will start next year," he added.

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