EU Warns Bosnia and Herzegovina US-Backed Gas Project Could Jeopardize €1bn in Aid

The European Union has cautioned Bosnia and Herzegovina that plans to hand a major gas pipeline project to a US-based investor could threaten both its EU accession ambitions and access to nearly €1 billion in funding.

In a letter dated April 13, EU Ambassador to Sarajevo Luigi Soreca warned that special legislation adopted for the project may conflict with EU rules governing energy markets. The concerns center on the so-called “Southern Interconnection,” a proposed pipeline linking Bosnia to Croatia’s gas network and the liquefied natural gas terminal on the island of Krk.

The project is designed to reduce Bosnia’s long-standing reliance on Russian gas imports, which currently account for nearly all of its supply via pipelines running through neighboring countries. Annual imports are estimated at around 225 million cubic meters, largely sourced from Gazprom.

However, EU officials say the amended law—passed by the Bosnian Federation—grants exclusive control of the project to AAFS Infrastructure and Energy, raising concerns about transparency, competition, and compliance with EU energy regulations. Brussels has stressed that all such legislation must align with accession requirements and be submitted for review.

The EU’s warning comes as it pushes to phase out Russian gas imports by 2028, increasing pressure on countries like Bosnia, whose energy systems are closely tied to the bloc. As a member of the Energy Community, Bosnia is expected to follow EU market rules, including ensuring open access and fair competition in infrastructure projects.

Despite these concerns, Bosnian officials have defended the move, arguing that involving a foreign investor could accelerate development of the pipeline, which is expected to cost around €1 billion. The project would create a second supply route and improve energy security, though analysts caution that infrastructure alone will not guarantee diversification without reliable supply contracts.

Bosnia was granted EU candidate status in 2022, with accession talks opening in 2024. Progress, however, remains dependent on reforms across key sectors, including energy governance and regulatory alignment.