The European Union warns that the deal on the link to Croatia could jeopardise Bosnia’s bid to join the bloc.

Bosnia and Herzegovina has signed a deal to construct a gas pipeline that is backed by investors connected to United States President Donald Trump and promises to reduce the country’s dependence on Russian supply.

The agreement, signed with neighbouring Croatia on Tuesday at a summit in the city of Dubrovnik, aims to relieve Sarajevo of its reliance on Russian gas, which it needs to do in advance of a European Union ban on energy purchases from Moscow set to take effect next year.

Bosnian Prime Minister Borjana Kristo, who signed the deal alongside Croatian Prime Minister Andrej Plenkovic, described it as a “major step forward” that strengthens energy security and diversifies supply.

However, the European Union, of which Bosnia is seeking membership, warned that the Southern Interconnection Agreement, as it is formally known, could jeopardise the country’s accession bid and put at risk more than $1bn in aid due to a lack of transparency around the project.

Bosnia is in the process of seeking EU membership, meaning it is required to meet obligations for member states, with energy a particularly sensitive issue.

Trump has been pushing hard to persuade European countries to dump Russian gas and buy US liquefied natural gas (LNG) instead.

Trump connections

By connecting Bosnia to Croatia’s LNG terminal on the island of Krk, the pipeline would not only integrate directly into that of the bloc, but also allow US gas to reach a country that currently depends on Russia for its entire supply.

Earlier this month, Bosnian lawmakers voted to name US-based AAFS Infrastructure and Energy as the investor and developer of the project.

AAFS Infrastructure and Energy is headed by Jesse Binnall, a lawyer who previously worked for Trump and unsuccessfully sought to overturn his 2020 presidential election loss, and Joseph Flynn, the brother of Trump’s former adviser Michael Flynn.

Transparency International warned the move set a “dangerous precedent” and risked “seriously undermining the public interest,” by preventing other companies from bidding.

The EU’s ambassador to Bosnia, Luigi Soreca, warned in a letter earlier this month that Bosnia must adhere to accession obligations when passing energy sector legislation and that any amendments must be submitted to the bloc for review.

The project is estimated to be worth around $1.5bn and would also include the construction of gas-fired power plants aimed at reducing coal-based electricity production.