The municipality of Glamoč sold a co-ownership stake in a company that had a concession for the “Dževa” and “Slovinj” wind farms, a project worth 250 million euros.
Junuza Duruta Street, no number, Municipality of Glamoč. At this address are located, in a two-story building, the headquarters of two companies that will implement one of the largest energy projects in Bosnia and Herzegovina, worth around 250 million euros.
According to the latest strategic documents of the Federation of Bosnia and Herzegovina, Glamoč is classified as an extremely underdeveloped municipality, with just over 4,000 inhabitants. Various winds, particularly political and historical ones, have influenced numerous displacements and devastations. However, other winds that dominate this geographical and administrative community will bring new energy projects to this region, as the construction of four wind farms is planned in the mentioned municipality area.
Construction project still on hold
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Among them are the power plants “Dževa” and “Slovinj,” and the concession for these projects was granted to the company “Vjetroelektrane” d.o.o. Glamoč, a company jointly founded in 2009 by the municipality of Glamoč and the company “Nova energija,” owned by Croatian businessman Franjo Pašalić.
The initial capital of the company at the time of its establishment was 10,000 KM, with 84 per cent ownership belonging to Pašalić and 16 per cent to the municipality of Glamoč. However, in 2021, representatives of the municipality of Glamoč decided to sell their stake.
Not only that, but they also agreed to the concessionaire's proposal for a compensation of 0.5 per cent, and to provide the land owned by the municipality for the needs of these wind farms free of charge.
Proposal “Nova energija”
In early June 2021, Deputy Director of “Nova energija,” Vlado Marić, sent a letter to the address of the municipality's mayor, Nebojša Radivojša, and the Municipal Council, requesting a modification of the Agreement on Cooperation, which defines the ownership relations in the company “Vjetroelektrane.”
In the letter, Marić proposes that the municipality's ownership stake be replaced with a mandatory compensation payment to the municipality of Glamoč, amounting to 0.5 per cent of the total electricity production generated by the company “Vjetroelektrane” through “Dževa” and “Slovinj.”
Interestingly, just a few months earlier, representatives of the same company had sent a letter to the municipal authorities offering 1% compensation of the generated electricity in exchange for the mentioned 16% ownership.
The newly proposed offer, which is worth half as much as the initial one, is justified in the letter by the condition imposed on them by Elektroprenos BiH, which required them to construct a 70 km transmission line. This was seen as a burden on their investment.
According to “Nova energija,” with the revised proposal, the municipality of Glamoč would receive an annual compensation of approximately 376,000 KM, 40,000 KM annually for access roads, and a one-time rent of 93,000 KM.
As an explanation for their proposal, they state that they need to secure 250 million euros for the investment and acknowledge that the municipality of Glamoč cannot provide funds proportional to their stake.
Soon after the letter, the municipal administration, led by Mayor Nebojša Radivojša (SNSD), prepared a new Business Cooperation Agreement, which was approved by the current coalition (SNSD-HDZ BiH) in November 2021.
The Agreement states, among other things, that the municipality of Glamoč also commits to providing the land owned by the municipality, where the construction of the wind parks “Slovinj” and “Dževa” is planned, to the company “Nova energija” for use without compensation for a period of 30 years, with the possibility of extension in accordance with the concession agreement.
Additionally, the municipality of Glamoč has undertaken to obtain the determination of public interest for the use of space and the construction of the wind park.
In the Decision on the determination of public interest made by the authorities in Glamoč, it is mentioned that the company “Vjetroelektrane” informed the municipal administration that, regardless of the estimated value of the land, it offered to pay 0.5 KM per square meter for the expropriated land and will deposit the total amount for land expropriation into the municipality's account at the mentioned price.
Sources from Gerila in Glamoč state that before this decision, a number of residents had directly sold their plots of land for the purpose of wind farm construction, between 2009 and 2018, at rates ranging up to 1 KM per square meter.
“They purchased that land and then made a decision on expropriation, initially proposing a price of 0.30 KM per square meter. They considered it too low and then increased it to 0.50 KM per square meter for that land. The company is responsible for providing the funds for expropriation. The municipality negotiated with “Nova energija”. After the decision on expropriation, citizens and some council members exerted pressure on them, stating that it was too little, and they agreed to 0.50 KM”, says a resident of Glamoč.
Just five days after receiving the letter from “Nova energija”, Mayor Nebojša Radivojša issued a Decision on determining the public interest for the construction of the wind park, allowing for the expropriation of properties owned by private individuals.
In November of the same year, a session of the Municipal Council was held, which approved the signing of this Agreement.
According to sources from Gerila, Franjo Pašalić himself attended the session and, in response to proposals from some council members to increase the compensation for the municipality, stated that he did not agree to that, and the demands of his company were adopted.
There has been a change in management within the company “Nova energija” in the meantime. The former director, Ivan Janković, stated in a brief telephone conversation with Gerila that he was dismissed a few months ago and was replaced by a certain Pero Perković.
However, the entire wind power project is being led by the deputy director, Vlado Marić, who emphasizes excellent cooperation with the municipality.
“Moreover, the municipality is collaborating in the implementation of this project. The municipality had 16 per cent ownership. Some negotiations are taking place regarding the distribution of ownership shares. The agreement that was initially made regarding the cooperation could not keep up with the investments, so the decision was made to allocate 0.5 per cent of the electricity production to the municipality,” says Marić to Gerila.
When asked about the fees and concessions that the company needs to pay, Marić says that everything is defined by the municipality, but each contract is considered a business secret.
“The concession is separate, and the fees to the municipalities come later. We negotiate with the municipality to determine their share either in percentages or in energy. The concession fees are allocated to both the municipality and the canton or county. To be honest, I don't know the exact distribution of those fees, that is, how much belongs to the municipality and how much belongs to the county”, says Marić.
The cabinet of Minister Dijana Puzigaća is withholding information
Neither the Ministry of Economy in Canton 10 (Hercegbosanska županija) nor the cabinet of Minister Dijana Puzigaća wanted to respond to our inquiries regarding the concession fees and the contract for the mentioned wind power plants.
Despite multiple phone calls and emails, we haven't received a response from Minister Dijana Puzigaća's office for several months. Furthermore, we were informed over the phone that our inquiry was forwarded to Deputy Minister Mat Šiško and that we should contact him through his personal Gmail, but even that was unsuccessful.
However, according to available documents, Vjetroelektrane Glamoč obtained slightly more favourable conditions through the contract compared to other concessionaires involved in wind power generation.
On the other hand, during the past year, a contract was signed for the construction of two additional wind parks, Čadilj and Marino Brdo, which will be built in the Glamoč and Bosansko Grahovo area. The investor is the German company WPD.
According to the contract, the concessionaire has been granted a concession for the construction of the “Čadilj” wind park, located in the municipality of Glamoč, with a total installed capacity of 138 MW. A one-time concession fee of 62,236 marks (approximately 31,000 euros) has been determined for this concession. The annual concession fee will be calculated at 1.75% of the total gross revenue generated from electricity production.
For the concession to build the “Marino Brdo” wind park, which will be constructed in the municipality of Bosansko Grahovo with a capacity of 126 MW, a one-time concession fee of 56,330 marks (28,000 euros) has been determined. The annual concession fee will be calculated at 1.78% of the total gross revenue.
The mayor of the municipality, Nebojša Radivojša, also avoids answering questions about the wind parks. Initially, he answered our phone call and said to call him later, but he did not respond to our subsequent calls.
On the other hand, the president of the municipal council, Marko Damjanović, says that even the original contract with “Nova energija” from 2009 was not well done.
“The then mayor, the late Radovan Marković, as the executive authority, proposed such a contract or agreement with “Nova energija”, where the owner is Pašalić. The municipality's share would be 16 per cent in that arrangement. What was problematic for me at the time was that the company's assembly consisted of three individuals, with majority of decision-making power held by “Nova energija”. However, with an investment of several million euros, our stake would be reduced to less than one per cent. Take a capital of 10,000 KM and a capital of 3-4 million euros, and you will see how small our share is there. The agreement stated that we would receive funds from the profits. However, how can we control the profits? We cannot! My intention, while Radovan Marković was in office, was that this agreement was not good and that we should follow what everyone else does in the region, which is to have a fixed amount of the generated electricity in a certain percentage, whether it's 0.9, 0.7, or 0.5”, says Damjanović to Gerila.
Damjanović: We could have done better, I asked for a higher compensation for Glamoč
Damjanović says that more money could have been directed to the municipality from this and similar projects, but there was no agreement.
“We had given a similar contract to another company, I don't know if it's based in Banja Luka, I think it's called Vitorog, a year earlier. I just received a response from the Ministry of Economy regarding my question about the number of concessions in the Glamoč municipality. I was informed that there are four wind parks. Even then, I was not in favour of their proposal. My intention was to go with one per cent, as is the case in the surrounding area, but that meeting lasted longer than usual. My proposal did not pass; the municipal mayor had the majority and defined in the contract that it would be 0.5 per cent, and that's how it went. When the decision for Nova Energija came the following year, there was no reason to ask them for one per cent if we had given someone else 0.5 per cent under the same conditions. That's the real story of how we ended up with 0.5 per cent,” Damjanović adds.
He points out that, despite being part of the majority in the municipal council, he does not support decisions that are not rational and have negative effects on the local community.
“It's relatively insignificant that I was not in favour of it. Of course, more could have been requested if the executive power and the majority at the time insisted on at least 0.75 per cent. I even proposed that figure, but for some reason, it didn't go through, and I didn't vote for that decision. Those who voted at that time are recorded in the minutes. I am a member of HDZ, and we are coalition partners with SNSD and form the government in the municipal council, but it doesn't mean we agree on everything,” says Damjanović.
The construction project is still at a standstill
Despite the fact that the company Vjetroelektrane was established 14 years ago, the construction of the mentioned wind farms in the Glamoč area has still not started. A request for an “environmental permit” for the Slovinj wind farm project, consisting of 49 wind turbines with a total installed capacity of 130 MW, was sent to the Federal Ministry of Environment and Tourism back in 2016, but the permit was only issued in 2020.
On June 2, 2022, the Government of the Federation of Bosnia and Herzegovina adopted a piece of information on the activities in the process of issuing an Energy Permit and provided preliminary consent to the Federal Ministry of Energy, Mining, and Industry for the issuance of the permit. The same was done for the Dževa wind farm project in October of last year.
Deputy Director of Vjetroelektrane, Vlado Marić, stated that they are still waiting for all the necessary documents to start implementing the project. He mentioned that the delay is not on their part but due to the Parliament, which they have been waiting for a year and a half. They have submitted the request for the energy permit, and while they recently received it for Dževa, it was mistakenly omitted for Slovinj during the parliamentary session. They submitted it in 2021 and are still waiting. Marić expressed that they could have started 15 months ago if the Federation Parliament had been functioning.
Meanwhile, the two companies involved in the construction of the wind farms, Vjetroelektrane doo and Nova Energija, are experiencing significant financial losses. Despite both companies having only one employee each, their losses amount to hundreds of thousands of convertible marks.
GERILA info
