Bosnia And Herzegovina Ends Subsidies For Small Hydropower Projects

Bosnia And Herzegovina Ends Subsidies For Small Hydropower Projects
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In Response to Global Call to Protect Europe’s Last Wild Rivers, Federation of Bosnia and Herzegovina Ends Subsidies for Small Hydropower Projects

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Bosnia And Herzegovina To Cut Subsidies For Small Hydropower Plants

In a decision that could help set a precedent across the Balkans, the Federation of Bosnia and Herzegovina (FBiH) announced Nov. 26 that starting in 2021, the government would no longer provide subsidies that support the construction of small hydropower plants. The leading conservation organizations that in September urgently called on the government to ban new small hydropower plants applaud the government for taking this action, which is a first step toward helping protect thousands of kilometers of Bosnia and Herzegovina’s wild rivers and the people and wildlife that depend on these waterways.

More than 430 small hydropower plants have either recently been built, are under construction, or were planned in Bosnia and Herzegovina. Starting on January 1, 2021, the guaranteed subsidies for small hydropower plants will not be extended, and the funds provided for that will be redirected as incentives to renewable energy sources such as solar and wind. The new bylaws could help prevent the construction of at least 162 small hydropower projects on 79 rivers, but they are unlikely to be able to stop another 30 other projects on 20 rivers for which investors allegedly already have permits.

“It has been so inspiring to see how committed local environmental activism, complemented by international attention, has spurred widespread opposition to this devastating practice,” said Wes Sechrest, Global Wildlife Conservation chief scientist and CEO. “Now it is critical that the FBiH follow through on its promise not only to its people, but to the citizens of the world, who want to see the protection of the rivers of the Balkans, or Europe’s ‘blue heart’.”

Small hydropower plants bring with them the construction of access roads, tunnels, bridges, and transmission lines, with an influx of other human activities that also require tearing down the forests around the rivers and also threaten the communities and animals that live there.

Restricting Water Access

Hydropower plants also divert water, and restrict access to water for local communities for drinking and use in agricultural practices and other livelihoods. Across the country, local communities, such as those around the Neretvica and Kruščica rivers, have been rising up and holding protests, often forming human walls at construction sites to prevent bulldozers from starting the work. Many Bosnia and Herzegovina residents consider the rivers a part of their identity.

“A 15-year-old activist from the Neretvica River valley told me the river is the heart of his people,” said Marsela Pecanac, founder of Atelier for Community Transformation – ACT. “There is no stronger heart beating in the Balkans right now than the blue heart, and politicians and investors know it. In addition to the 109 hydropower plants recently built in BiH, there is talk of new river concessions for small hydropower in Jajce, the medieval capital of Bosnia located at the mouth of two beautiful rivers. While the activists applaud the newly announced Federation measures, they won’t stop until every river in Bosnia is safe from mindless destruction and our rivers run free again.”

In addition to calling for an end to subsidies to fund the construction of small hydropower plants, a group of local activists also asked the government to prohibit local municipalities from granting environmental permits, and vastly improving criteria and formation of commissions for environmental impact study analysis. The conservation organizations are also calling on the other government entity in Bosnia and Herzegovina, Republika Srpska, to take similar action. Republika Srpska had proposed a resolution earlier this year for a temporary ban of all small hydropower projects in Bosnia and Herzegovina, but eventually the National Assembly voted against it, despite significant local community pressure.

Dam Construction

“Cancelling the subsidies for hydropower is the most important step to save the rivers, because it limits the two root causes of dam construction: money and corruption,” said Ulrich Eichelmann, coordinator of the Blue Heart campaign from Riverwatch. “As long as you can make a fortune by destroying rivers, dams will be built. The FBiH can become a trend-setter for protection of rivers for the whole of Europe. While this step is fully in line with the EU Green Deal, the announcement must become reality. Dear FBiH government: Europe is watching you!”

Nearly all Balkan’s rivers are facing an onslaught of small hydropower plant construction, with plans for 3,000 dams to be constructed in the area--and more than 1,000 of those are planned within protected areas.

The projects have been driven by local and foreign investors, with diverse financial support, including subsidies for renewables. Some investors use the argument that hydropower can help Bosnia and Herzegovina meet its goal of 40 percent renewable energy (one of the highest targets in Europe) to get the country a step closer to joining the European Union. Although current small hydro plants in Bosnia and Herzegovina only produce around 3 percent of the country’s annual electricity production and come at a huge environmental cost, until now the government has continued to grant permits and subsidies for these new small and medium hydro projects that have a negligible “renewable energy” contribution.

Protection Of The Blue Heart Rivers

Activists across Europe are pushing for the protection of the continent’s “blue heart” rivers with a legal framework similar to the United States’ Wild and Scenic Rivers Act, which protects rivers with natural, cultural and recreational significance. They would also like to see the constitutional protection of water and the right to clean water.

The rivers between Slovenia and Albania, including those in Bosnia and Herzegovina, are considered the most important hotspot for threatened freshwater biodiversity in Europe. Sixty-nine fish species in these rivers live nowhere else in the world. The Balkan Rivers are home to marble, softmouth, Ohrid and prespa trout; the endangered huchen (or Danube) salmon; the endangered Balkan lynx; and the endangered white-clawed crayfish. They provide critical spawning habitat for many of the 113 endangered freshwater fish species in the Balkans. According to freshwater experts, if small hydropower projects are allowed to continue, at least 10 percent of all European freshwater fish species will go extinct or will be pushed to the brink of extinction.

The International Union for Conservation of Nature Freshwater Biodiversity Unit is currently reviewing proposals for 11 freshwater Key Biodiversity Areas in Bosnia and Herzegovina, with the potential for more, underscoring that these sites are globally important for the health of the planet and for the persistence of biodiversity.

The organizations that are part of this broad coalition include: 2020 Action, American Rivers, Arnika, Atelier for Community Transformation – ACT, CEE Bankwatch Network, the Coalition for the Protection of Rivers of Bosnia and Herzegovina, David Brower Center, EarthAction, Earth Law Center, EuroNatur Foundation, Freshwater Life, Global Wildlife Conservation, International Rivers, the International Union for Conservation of Nature Species Survival Commission Freshwater Fish Specialist Group, the IUCN SSC Freshwater Conservation Committee, Institute for Environmental Security, Rainforest Action Network, The Redford Center, Riverwatch, Save the Blue Heart of Europe, Shoal, the World Fish Migration Foundation, World Future Council, and WWF.

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Jacob Wolinsky is the founder of, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at) - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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