All markets

Bosnia and Herzegovina

With a cumulative score of 1.56, Bosnia and Herzegovina ranks number 42 among emerging markets and number 71 in the global ranking.

  • Emerging markets
  • Europe

1.92 / 5

Power score

0.89 / 5

Transport score

1.17 / 5

Buildings score


Low-carbon strategy

Net-zero goal and strategy

Bosnia and Herzegovina is a signatory of the Sofia Declaration of the Green Agenda for the Western Balkans, which commits to work with the European Union to reach net-zero emissions across the continent by 2050. Leaders of the Western Balkans have agreed to align with EU climate law and the bloc’s carbon market, and increase the share of energy derived from renewable sources – among other things.

Nationally Determined Contributions (NDC)

Bosnia and Herzegovina submitted an updated Nationally Determined Contribution (NDC) – its plan to help achieve the goals of the Paris Agreement – in April 2021. The country aims to reduce its greenhouse gas emissions by 33% by 2030 versus a business-as-usual scenario from 1990 levels, and by 62% by 2050. If it receives international financial and technological assistance, in particular to decarbonize the mining sector, Bosnia and Herzegovina says it could lower its emissions by 37% by 2030 and 66% by 2050. The sectors being targeted for mitigation are power, district heating, buildings, industry, transport, forestry, agriculture and waste.

Fossil fuel phase-out policy

The Sofia Declaration includes a commitment to try to decrease and gradually phase out coal subsidies while respecting state aid rules. It also agreed to “actively participate” in the “Coal Regions in Transition in the Western Balkans and Ukraine” initiative, through which the European Commission and partners such as the World Bank aim to help countries in the region shift away from coal to a carbon-neutral economy.


Power policy

Bosnia and Herzegovina is split into two political entities – the Federation of Bosnia and Herzegovina (FBiH) and Republika Srpska. The two regions have separate governments and determine their energy policy independently. Each region has a separate feed-in tariff, with Republika Srpska additionally offering a feed-in premium, although these schemes have only encouraged the build-out of smaller plants so far.

In theory, renewable energy producers with feed-in tariff contracts receive priority grid access. However, it can be a difficult and bureaucratic procedure to secure a connection in practice. State utilities have negotiated deals for larger wind farms directly with the government.

Both FBiH and Republic of Srpska have auctions in place, although transparency is lacking. A net-metering scheme is used for small producers for up to 50 kilowatts and in Republika Srpska, self-generation is encouraged by offering a premium for the electricity produced.

The country aimed to achieve a 40% share of renewable energy in total final consumption 2020, although poor transparency over the projects that received government support means it remains unclear whether these planned quotas were fulfilled. There are several smaller and more specific targets for 2025, 2030 and 2050 in the “Framework Energy Strategy of Bosnia and Herzegovina by 2035”.

Power policies

Renewable energy auction
Feed-in Tariff
Import tax incentives
Net Metering
Renewable energy target
VAT incentives

Power prices and costs

Power prices are still partially regulated in Bosnia and Herzegovina, particularly in Republika Srpska. However, a new Law on Electricity in this region has imposed a gradual phase-out of the regulated generation price from 2022 until 2024.

Across the whole country, tariffs are cheap compared to the rest of the Balkans and average prices in 2021 were even lower than those in 2020.


Power market

Bosnia and Herzegovina’s power fleet is roughly split between just over 2 gigawatts (GW) of coal capacity and about 1.6GW of large hydro. A new coal-fired power station was completed in 2016, beginning the process of replacing the aging coal fleet. Another coal plant, Tuzla 7, is currently under development, despite the Energy Community – a European energy body – bringing infringement proceedings against the country.

Renewable energy capacity in Bosnia and Herzegovina is minimal, but includes wind, solar, biomass and small hydro. The country’s first wind farm was commissioned in Mesihovina in 2018, and comprises 22 turbines with an installed capacity of 51 megawatts (MW). In 2021, a 15 turbine, 48MW wind farm was completed in Podvelezje.

Most renewables investment has come from international concessional lenders, including the European Investment Bank and European Bank for Reconstruction and Development (EBRD). In addition to domestic funds and government grants, organizations such as the United Nations Development Program and US Agency for International Development (USAID) provide co-financing and technical assistance.

While Bosnia and Herzegovina’s electricity sector is open to private participation, generation and distribution are overwhelmingly undertaken by three vertically integrated public utilities whose remit is geographically distributed. There are, however, some larger wind projects developed by foreign players and local developers have also built small-scale hydro.

Distribution system operators are still bundled with electricity retail in FBiH, and with electricity supply in Republika Srpska. The EU initiated an infringement case against Bosnia and Herzegovina for its lack of progress in utility unbundling, saying it presented a substantial obstacle to competition. There are no corporate power purchase agreements in the country as most generators are still enjoying the benefits of feed-in tariffs.

Installed Capacity (in MW)

2012201420162018202001K2K3K4K MW

Electricity Generation (in GWh)

2012201420162018202005K10K15K GWh

Utility privatisation

Which segments of the power sector are open to private participation?


Wholesale power market

Does the country have a wholesale power market?

Not available

Doing business and barriers

Obtaining a permit is the single largest barrier faced by renewable energy developers in Bosnia and Herzegovina. Approval is required from many different levels of government and the requirements can vary by region. Disagreements between various government departments are hampering the establishment of an adequate electricity transmission system and the construction of power lines to connect wind and solar power plants.

Local opposition is an additional obstacle for renewables projects. Only companies that have location and environmental permits can apply for auctions and premiums.

To meet its climate goals, Bosnia and Herzegovina will need substantial international assistance for technology transfer, to set up financial mechanisms to encourage decarbonization (gas is currently subsidized in Sarajevo), and financial support for climate-related projects. Working in its favor is a moderate level of indebtedness and the commitment of the international community to the economic stabilization of the country.

Currency of PPAs

Are PPAs (eg. corporate PPAs and all other types) signed in or indexed to U.S. Dollars or Euro?

Not available

Bilateral power contracts

Can a C&I (Commercial and Industrial) customer sign a long-term contract (PPA) for clean energy?

Not available

Fossil fuel price distortions - Subsidies

Does the government influence the wholesale price of fossil fuel (used by thermal power plants) down through subsidies?

Not available

Fossil fuel price distortions - Taxes

Does the government influence the wholesale price of fossil fuel (used by thermal power plants) up through taxes or carbon prices?

Not available


EV market

The electric vehicle (EV) market in Bosnia and Herzegovina is in the early stages. Passenger EVs represented less than 1% of the total passenger vehicle fleet in 2021.

EV policy

Although the country is not a member of the EU, it adopted the bloc’s Euro 4 vehicle emissions standard in April 2016. This stipulates that imported vehicles should not be older than 10 years and sets minimum technical standards in line with the EU, incentivizing new and more sustainable cars.

In May 2022, BiH introduced purchase grants for EVs, amounting to 5,000 convertible marka ($2,520) for plug-in hybrids and 10,000 marka for battery-electric models. This incentive is scheduled to be in force until at least December, or until the 1 million marka allocated for the program is spent.

Transport policies

Electric vehicle target
Electric vehicle purchase grant or loan incentive
VAT incentives for EV
Import tax incentives for EV
EV charging infrastructure target
EV charging infrastructure support

Fuel economy standards

Does the country have a fuel economy standard in place?

Not available


Buildings market

The Federation of Bosnia and Herzegovina (FBiH) enacted the Law on Energy Efficiency in 2017 with the main purpose of reducing environmental impact, ensuring security of energy supply and lowering emissions. FBiH also adopted rulebooks for energy performance requirements for buildings and regular inspections of heating and air conditioning systems in November 2019. Modernization of the country’s district heating systems is ongoing, including several biomass-based district heating projects supported by the EBRD.

Energy efficiency policy

Does the country have a national energy efficiency plan?

Not available

Energy efficiency policy

Are there minimum energy performance standards for buildings?

Not available

Energy efficiency incentives

Is there access to loans or grants for energy efficiency measures (i.e. Wall or loft insulation or double glazing)?

Not available

Buildings policy

The Sarajevo region is preparing a 10-year strategy to limit the use of coal and promised in 2021 that it would gradually ban the use of coal for heating. According to the region’s Ministry of Utilities, Infrastructure, Physical Planning, Construction and Environmental Protection, the public has shown great interest in a pilot project offering subsidies to households to replace coal furnaces and boilers with certified wood pellet burners and heat pumps.

The EBRD has supported over €1.1 million worth of green technology investments in Bosnia and Herzegovina through the Green Economy Financing Facility (GEFF), providing a grant for 15-20% of the loan amount through partnering financial institutions. People in Bosnia and Herzegovina have mostly invested in PVC windows and doors, biomass boilers and thermal facades.

Buildings policies

Low-carbon heat target/roadmap
Tax credits
Boiler scrappage schemes
Heat pumps purchase grants/loans incentive
Ban on boilers: new build homes
Ban on boilers: all homes

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