Bosnia and Herzegovina Secures World Bank Support for Just Energy Transition

On May 1st, the World Bank’s Board of Executive Directors approved a substantial financial package totaling EUR 82.79 million—comprising a EUR 79.90 million loan and a EUR 2.89 million grant—to assist Bosnia and Herzegovina (BiH) in implementing its National Energy and Climate Plan (NECP). This initiative is part of a larger effort to transition the country away from coal dependency toward a sustainable and low-carbon energy future.

The funding will be directed to the newly launched Just Transition in Select Coal Regions of Bosnia and Herzegovina Project, a landmark program designed to ensure that the shift from coal-based energy is both environmentally sound and socially equitable. The initiative is focused on revitalizing the coal mining regions of Banovići, Zenica, and Kreka, which have long been economic hubs for the country but are now facing the difficult challenge of industrial decline.

Supporting Mine Closures and Land Repurposing

One of the core components of the project involves the safe and responsible closure of underground mining operations in Zenica. This closure will be conducted in line with international best practices, ensuring minimal environmental impact and prioritizing the safety and health of affected workers and communities. Additionally, post-mining lands in Banovići, Zenica, and Kreka will be repurposed for alternative economic uses, such as green industries, agriculture, and community services.

This repurposing effort not only mitigates the environmental degradation caused by years of mining but also opens doors to new economic activities that can provide long-term sustainability for these communities.

Investing in Renewable Energy Infrastructure

In a major move towards clean energy, the project will support the installation of renewable energy systems at the Banovići and Kreka mining sites. These systems, including solar and potentially wind or biomass technologies, will be installed on former mining lands, transforming these areas into sources of clean energy generation.

Such investments are crucial for enhancing Bosnia and Herzegovina’s energy independence. By diversifying its energy mix and reducing reliance on imported fossil fuels, the country strengthens its energy security and aligns with the European Union’s Green Deal objectives.

Ensuring a Just Transition for Workers and Communities

Recognizing that the energy transition can have adverse socio-economic effects, especially on coal-dependent communities, the World Bank’s project includes social protection measures and skills development programs. These programs are targeted at displaced coal workers and community members seeking employment outside the coal sector.

Through retraining and reskilling initiatives, individuals will be equipped to take on new jobs in emerging industries such as renewable energy, construction, environmental services, and information technology. The project aims to ensure that no one is left behind during the transformation process.

“This new project is an opportunity to boost Bosnia and Herzegovina’s energy security while supporting communities, making sure no one is left behind,” said Christopher Sheldon, World Bank Country Manager for Bosnia and Herzegovina and Montenegro.

Commitment to Decarbonization by 2050

Bosnia and Herzegovina is in the midst of developing its National Energy and Climate Plan, which outlines ambitious goals to reduce greenhouse gas emissions and decarbonize its power sector by 2050. The World Bank’s support underscores the country’s commitment to meeting its climate obligations under the Paris Agreement and moving toward a greener, more sustainable economy.

The just transition project builds on prior World Bank initiatives in the region and serves as a model for other countries grappling with similar transitions from fossil fuel dependency to renewable energy-based economies.

With the combined focus on environmental integrity, economic revitalization, and social equity, the initiative marks a pivotal moment in the country’s journey toward a sustainable and inclusive energy future.