Proposed legal changes to a long-delayed gas pipeline linking Bosnia & Herzegovina to Croatia have drawn criticism from anti-corruption groups and energy experts, who warn the project risks undermining transparency and saddling the public with long-term costs
Lawmakers in the Bosnian Federation could consider amendments as early as April 8 under an expedited procedure, potentially clearing the way for a US-linked private company to take over development of the Southern Gas Interconnection.
The project, a roughly 162-kilometre pipeline connecting Bosnia’s gas network to Croatia’s system and the liquefied natural gas (LNG) terminal on the island of Krk, is seen by Western officials as a key step in reducing the country’s reliance on Russian gas supplies.
However, the proposed amendments have triggered concern among watchdogs, who say the changes could bypass competitive procedures and concentrate decision-making power in opaque negotiations.
Transparency International Bosnia and Herzegovina said the amendments would directly designate a private investor as the project partner and operator, calling it a “dangerous precedent”. In a statement, the group warned the proposal “eliminates any possibility of competition” and raises concerns about favouring particular interests in a strategically important infrastructure project.
It also flagged the use of a fast-track legislative process, saying it had limited public scrutiny. The organisation said the move increases the risk of “regulatory capture”, where political or commercial actors exert undue influence over decision-making.
Environmental and energy campaigners have raised similar concerns about both governance and economic viability. Pippa Gallop, Southeast Europe energy adviser at Bankwatch, said the amendments would effectively sideline the state-owned gas transmission company BH-Gas in favour of a newly formed firm.
“We’ve analysed the proposed amendments, which directly appoint this Trump-linked, newly-formed company AAFS as the investor instead of Federation-owned BH Gas — with no tender,” she said in comments emailed to bne IntelliNews.
Gallop added that the changes could breach Bosnia’s concessions law and expose public finances to risk. “This would in our opinion breach the law on concessions, as would the fact that the amendments leave key decisions on the content of the contract to opaque negotiations between the Federation government and AAFS, raising red flags for corruption and excessive transfer of financial risks to the Federation.”
“One way or another, the public is bound to end up paying, either via their bills or the Federal budget,” she said.
Political push to unlock stalled project
The Southern Interconnection pipeline has been under discussion for several years but has been repeatedly delayed by political disagreements within Bosnia’s complex governance structure.
The Bosnian Federation, one of two autonomous entities in the country, approved a law enabling the project in 2025, but implementation has stalled amid disputes over who should manage the pipeline.
Croat representatives had insisted on the creation of a new operator based in the country’s Croat-majority areas, while existing legislation designated Sarajevo-based BH-Gas as the transmission company.
In recent months, US officials have stepped up efforts to break the deadlock, proposing that an American private-sector partner take the lead in developing, building and operating the pipeline.
Bosnian and US officials have argued that such an arrangement could accelerate construction and secure access to LNG supplies from Croatia, strengthening the country’s energy security.
The US Embassy in Sarajevo has said that “American private-sector investors can ensure that construction of the Southern Interconnection will move quickly and will help secure affordable and reliable US liquefied natural gas.”
Concerns over cost and demand
Critics, however, question whether the project’s scale is justified by Bosnia’s relatively limited gas consumption.
“While the need for FBIH to free itself from Russian gas is clear, gas makes up less than 3% of Bosnia and Herzegovina's energy supply, and is mostly used for heating in Sarajevo,” Gallop said.
She added that the proposed pipeline could take years to complete, limiting its usefulness as an immediate alternative to Russian imports.
“The pipeline would anyway come too late to replace Russian gas, as we expect it would take up to a decade to complete,” she said.
The project’s cost could also rise significantly under the proposed changes. “Adding at least 85 km of pipeline compared to the previously planned route would also increase the cost of the project by at least €77mn without any feasibility analysis or public debate,” Gallop said.
Transparency International also questioned the lack of detailed justification for the amendments, noting that authorities had not explained the shift from the original project design.
Supporters of the project argue that its strategic value outweighs concerns over cost and timing.
Bosnia currently relies entirely on Russian gas delivered via Serbia, making diversification a key priority for policymakers and Western partners.
The Southern Interconnection would enable access to LNG imports via Croatia and potentially open Bosnia to additional supply sources, including gas from the Caspian region and storage facilities in neighbouring countries.
The pipeline is also designed as a bidirectional system, allowing for more flexible gas flows and positioning Bosnia as a potential transit route in the future.
However, the long-term demand outlook remains uncertain, particularly as European countries accelerate efforts to decarbonise their energy systems.
Gallop warned of the risk of investing in infrastructure that could become underutilised. “Rather than risking stranded assets by building massive new infrastructure without sufficient consumers, Sarajevo should switch to heat pumps, geothermal and other renewables,” she said.
Transparency International has called on lawmakers to delay the fast-track process and open a broader public debate on the project. It said greater scrutiny was needed to ensure compliance with legal standards and alignment with European Union rules on competition and transparency.
The organisation also warned that decisions taken now could have long-term implications for governance in Bosnia’s energy sector. “The proposal eliminates any possibility of competition,” it said, urging authorities to reconsider the approach and provide clearer justification for the changes.
(intellinews.com, April 7, 2026)
