Bosnia signs Southern Interconnection Agreement with Croatia to diversify energy supply

Bosnia and Herzegovina has formalised an agreement with Croatia to construct a gas pipeline designed to reduce the country's reliance on Russian energy. The Southern Interconnection Agreement, signed in Dubrovnik on Tuesday by Prime Ministers Borjana Kristo and Andrej Plenkovic, connects Bosnia to Croatia's LNG terminal on the island of Krk. This infrastructure project is estimated to cost $1.5bn and includes plans for gas-fired power plants intended to replace coal-based electricity generation.

The initiative aligns with broader efforts by the United States to encourage European nations to cease purchasing Russian gas in favour of US liquefied natural gas. By integrating directly into the EU energy network, the pipeline aims to ensure Bosnia meets its energy security obligations ahead of an EU ban on Moscow energy purchases scheduled to take effect next year. Prime Minister Kristo described the accord as a major step forward for strengthening national energy security and diversifying supply sources.

However, the European Union has issued a stark warning regarding the transaction. Brussels contends that the deal could jeopardise Bosnia's accession bid and put at risk more than $1bn in aid due to significant transparency concerns. The EU's ambassador to Bosnia, Luigi Soreca, had previously cautioned that Sarajevo must adhere strictly to accession obligations, requiring any energy sector amendments to be submitted for review before implementation.

The project is backed by US-based AAFS Infrastructure and Energy, which was appointed by Bosnian lawmakers earlier this month as the investor and developer. The firm is headed by Jesse Binnall, a lawyer who previously worked for Donald Trump and unsuccessfully challenged his 2020 election loss, alongside Joseph Flynn, the brother of Trump's former adviser Michael Flynn. This selection process has drawn scrutiny regarding the competitive nature of the tender.

Transparency International has stated that appointing AAFS sets a dangerous precedent by preventing other companies from bidding, thereby seriously undermining the public interest. The organisation argues that the move risks excluding potential competitors in a manner that does not align with standard procurement practices expected of a candidate nation.

As Bosnia seeks to meet the specific obligations required for EU membership, the tension between energy diversification and procedural transparency remains acute. While the infrastructure aims to secure long-term supply independence, the European Union maintains that adherence to rigorous accession criteria is non-negotiable, regardless of the strategic benefits of the proposed link.