Energy state building in Bosnia (2000-2007)
In 2002, the governance structure of the Bosnian energy sector was chaotic.
There were three separate power producing utilities – the Sarajevo-based Elektroprivreda BiH, the Mostar-based Elektroprivreda HZHB and the Banja Luka-based Elektroprivreda RS – divided along ethnic lines. There was uncertainty over the ownership of the transmission lines. It was unclear who regulated the sector, and who could be a counterpart for potential investors. In 2000 ESI had noted that
"international funding during the last years has often had the unintended effect of consolidating the ethnically divided war economies. A more sophisticated use of international influence could now ensure that the regulatory frameworks established for key industries advance the broader political and economic objectives of the peace process. Telecommunications and electricity, like coal and steel in the 1950s in Western Europe, are a natural starting point for functional integration of the Bosnian state."
At the time ESI recommended the establishment of strong, autonomous agencies at the state level to regulate these network industries:
"These would have power to issue licenses for the use of common networks (communications transmitters, electricity transmission grids) and to attach conditions to those licenses, including ensuring that service providers comply with the principles of a common market, and that they are financially transparent… International leadership is needed to accelerate the restructuring (unbundling) of these industries, splitting their functions among separate legal entities. Ambitious deadlines for restructuring should be set down at the Peace Implementation Council. Creating autonomous public corporations to manage and operate network facilities should be further investigated."
In fact, in recent years all of this has happened, changing the institutional landscape in the Bosnian energy sector dramatically.
In 2004 a state regulatory commission became operational. The whole Bosnian electricity network was united in 2006 into a state-level Transmission Company (Transco), based in Banja Luka. Transco is monitored by an independent system operator on the state-level based in Sarajevo. Since 2004, an energy department exists in the State Ministry of Foreign Trade and Economic Relations. The power utilities are also restructuring ("unbundling"): the RS power utility (EPRS) has already created five distinct regional energy distributing companies, which become independent suppliers in the energy market.