US CONSORTIUM E&I GROUP TO BUILD BOSNIA'S FIRST BIOFUEL FACTORY AND REFINERY IN BRCKO

BRCKO, Bosnia (October 21,2007) – After months of negotiations, the US consortium E&I Group announced that it will build the first bio-ethanol factory and refinery in Bosnia in the northern river-port town and district of Brcko. The new plant is expected to start production in four years’ time.

"This business initiative has entered a serious phase. The investors have presented their project and it is up to the government of Brcko District now, once it has made a formal decision, to carry out legal procedures, such as opening a tender for concessions for the land", Hasan Hadzic, spokesman for the Brcko District Mayor, Mirsad Djapo said.

E&I Group’s $150 million investment in Bosnia will inaugurate a new supplier to the growing European biofuel market.It is a long-awaited boost to the local economy, creating new jobs and increasing exports.Economic analysts believe that it rewards the Brcko authorities and business community for their efforts in creating an attractive business environment in what was one of the most fought-over areas during the 1992-95 Serbian,Montenegrin and Croatian aggressions against Bosnia.

Since then Brcko has grown into one of the most developed and business-friendly areas in Bosnia, thanks, in part, to its international supervision and to being detached from the rest of Bosnia’s complex, expensive and inefficient administrative system.

"Currently, the Brcko District has the most attractive environment for foreign investment", says the director of the Bosnian Agency for Promotion of Foreign Investments in Bosnia, Haris Basic.

Besides the refinery itself, the new investment in Brcko will be used for mine clearance, growing the required crops and transport. According to the E&I Group, corn and millet are to be the main crops for the production of Brcko's ethanol.These will be grown on over 5,000 hectares, 35 per cent of which will be state-owned land under concession, and the rest privately farmed.

Brcko’s location, including its proximity to fertile land – much of it still mine-strewn and unused – as well as it access to the Sava river, road and rail corridors, were the key to attracting this investment.

Suzana Bursac, spokesperson for Raffi Gregorian, the international supervisor of Brcko District, said that the Office of the International Community's High Representative in Bosnia(OHR), the international body that oversees Bosnia’s post-war reconstruction, supports projects, such as this one, which bring new investments and benefit the region.

E&I is a global group of companies involved in environment, infrastructure, engineering and de-mining. Its chief executive officer, Rob Shahmir, spoke highly of the understanding and support coming from Brcko District, adding that such responsibility from a partner was a guarantee that the whole project would be successful and completed on time.

Eddie Banks, a spokesperson for E&I, said that the Brcko refinery would be built by one of the Group’s member-companies from Canada. The de-mining activities will be undertaken by a new company that will be established in Bosnia.
“We are considering the establishment of a Bosnian environmental company", he added.

The construction of the refinery is to get underway early next year, with production starting in 2011. The planned initial capacity is 113.4 tonnes a day, with annual production amounting to 39,800 tonnes.

The ethanol factory – whose financial, technical and marketing services will involve several US, Canadian and British companies – will provide employment for 400 people, and will indirectly generate a further 4,000 jobs. The project will require expert teams from the whole of Bosnia and the broader region.

The investment in the bio-ethanol refinery in Brcko reflects growing international interest in biofuels to replace oil due to its increasing price and contribution to global warming.

Fuel expert Lejla Kljakic says that green fuels are gaining ground in the motor industry, city transport services and farming. According to the European energy industry consortium, Eurobserv’ER, the consumption of biofuels in Europe increased by 78 per cent in 2006. Germany is in the first place, followed by France and Austria.

Output from the Brcko refinery will help meet new EU regulations which, as of 2009 require the sale at petrol stations of two types of fuel consisting of a petrol and ethanol mixture: E5, with 5 per cent ethanol, and E10 with 10 per cent. As of 2020, only E10 will be on sale.

Kljakic said that the local production of biofuels is unlikely to have a big impact on their use in Bosnia itself."The reason for this is that so many old vehicles are on the roads. On the other hand, it will benefit our exports and open up new jobs", she said.

However, optimists expect some improvements in Bosnia, too, at least in the medium to longer term. Bosnia is hoping to join the EU over the next decade or so. When it does so, Sarajevo will have to meet the increasingly stringent environmental standards introduced by Brussels.