USAID Energy Policy Activity Fifth Quarterly Progress Report

The objectives are to achieve better coordination, management, and transparency at all levels of BiH's regulatory framework, a simplified energy policy environment, and targeted technical assistance to integrate BiH's energy sector into regional and EU markets. The EPA is implemented by Advanced Engineering Associates International, Inc. (AEAI) under contract number 72016819C00002. The project is divided into several components, including natural gas technical assistance, electricity technical assistance, and cross-cutting assistance on EU accession requirements in the BiH energy sector. During the reporting period from October 1, 2020, to December 31, 2020, significant events included the adoption of the Draft Law on South Natural Gas Interconnection by the FBiH Parliament's House of Representatives. The draft law aims to simplify the permitting process for the construction of the project, ensuring its timely and efficient commencement of operation. A public awareness campaign for the "South Natural Gas Interconnection" project was also organized by EPA and BH-Gas, with the event opened by the US Ambassador and featuring speakers from the Federation Prime Minister, Minister of Energy, and BH-Gas Director. Working groups for the development of new FBiH energy sector legislation were established by the Federation Ministry of Energy Mining and Industry (FMERI) upon EPA's initiative. The working groups will develop legislation in line with the EU acquis, including a framework law on energy and laws on electricity, natural gas, and energy efficiency. EPA will provide technical assistance to the working groups. In terms of achieved outputs compared to planned outputs, Component 1: Natural Gas Technical Assistance, continued providing assistance to FMERI on preparing the Draft Law on Natural Gas South Interconnection for the FBiH Parliament legislative procedure. EPA updated the text of the law in line with comments received from the FBiH Ministry of Finance and developed accompanying explanations for the legislative procedure. The draft law was subsequently adopted by the FBiH Parliament's House of Representatives with 66 votes in favor and no votes against. EPA also finalized the Roadmap for Accounting Unbundling of Distribution and Supply Activities of Sarajevogas Ltd, which provides a description of the activities that the company must complete in order to unbundle in line with the requirements of EU Directives. Additionally, EPA finalized an analysis of the document "Commission's Practice in Dealing with Ownership Unbundling and Assessing the Presence of a Conflict of Interest," which was developed as a part of technical assistance to Sarajevo-gas Istocno Sarajevo, a natural gas company from RS. The project's overall progress is being monitored through impact indicators as defined in the Work Plan and the Performance Monitoring Plan. The project's performance problems during the reporting period included delays in the adoption of the Draft Law on South Natural Gas Interconnection and challenges in establishing working groups for the development of new FBiH energy sector legislation. However, EPA is working to address these challenges and ensure the project's successful implementation. The project's risk factors that may affect achievement of planned objectives include delays in the adoption of legislation, challenges in establishing working groups, and potential changes in the project's scope or timeline. However, EPA is working to mitigate these risks through regular monitoring and evaluation of the project's progress and by providing technical assistance to the working groups. The project's status of each activity and task as defined in the Work Plan is being closely monitored, and adjustments to the project implementation plan are being made as necessary. The project's next quarter's major activities include the development of new energy sector legislation, the establishment of working groups, and the provision of technical assistance to the working groups.