The loan will finance measures leading to a more rational usage of energy through reduction of losses, improvement of energy efficiency, reducing operation and maintenance costs and increasing quality and reliability of power supply across the country.

The project will involve dam safety-related work on eight hydro plants with a total installed capacity of 2800MW.

This is the second EIB loan provided to the energy sector in Bosnia-Herzegovina. In 2000 it granted a loan of EUR 60M (US$77.8M) for the rehabilitation of electricity power networks in the country.