Bosnia and Herzegovina (B&H) has experienced massive economic and political changes since the collapse of former Yugoslavia in 1992. Currently, the country is largely decentralized and consists of two state-like entities, the Federation of B&H (Federation), and the Republika Srpska (RS) and District Brcko. The Federation is further decentralized and made of ten “cantons”.


The complexity of political and organizational structures extends to the energy sector where the state-like entities own and oversee three electric power companies, an oil refinery, natural gas transmission and distribution utilities, and coal mines, while district heating facilities fall under the responsibility of municipal (RS) and cantonal governments (Federation). This is a unique arrangement that has emerged as a consequence of the complex political situation.

According to available data, neither production nor consumption of energy, nor the condition of energy infrastructure has reached the pre-war level. Energy spending at the current level of energy intensity comprises more than 20 percent of GDP. This is a clear indication that significantly more attention needs to be paid to energy efficiency. According to the estimates from year 2000, households and the commercial sector account for 50 percent of total energy consumption.

Bosnia and Herzegovina is exploiting its naturally fast-flowing mountain streams and powerful rivers through the encouragement of hydroelectric power production.
The basic sources of primary energy in BiH are coal and hydro-power, which cover over 62 % of the total consumption of primary energy.

The theoretical potential of hydropower in Bosnia and Herzegovina is calculated at 8000 MW, the technical potential 6800 MW and the economic potential 5600 MW. With an installed capacity of 2052 MW (53% of the total electricity generated), hydropower is highly significant in Bosnia and Herzegovina, although its potential is far from being fully exploited yet (37% of its economic potential).

The potential for investors in construction projects on the Drina, Neretva, Bosna, Una, Trebisnica and Vrbas rivers and in the development of more than 200 small hydroelectric power plants on other sites is enormous.

In addition, BiH possesses high potentials for exploitation of renewable sources of energy, such as wind energy, solar energy, bio-mass energy and geo-thermal energy.
BiH, especially its southern part, has been identified as an excellent region for construction of wind generation plants. According to recent research conducted by domestic and international experts, wind potential of Bosnia and Herzegovina has a 30% higher utility coefficient than the EU average and the highest potential in the Balkan region.

Furthermore, BiH has considerable reserves of brown coal, lignite and peat, which estimated quantities overcome 6 billion tones. Three major deposits of coal are in the Tuzla region, in centralBosnia and Herzegovina, and in the Gacko basin. The four thermal power plants in these areas, operating on domestically mined coal and lignite, are undergoing a full overhaul.

Identified reserves of brown coal, lignite and peat provide an array of opportunities to the investors in construction projects of the new coal mines and new thermal-power plants, as well as of the plants for production of liquid fuels from the peat.

In addition, preliminary research surveys of oil and gas had indicated the presence of promising deposits on a number of sites within BiH. Gas system in BiH includes 191 km of main gasline, with annual capacities of 1 billion m3, and well developed distribution system, particularly withinSarajevo. With respect to the long–term projected gas needs, the demand could reach amount of 2 – 3 billion m3. Therefore, further development of the gas sector in BiH is indisputable.