* Mitsui ready to invest $286 million into Bosnia hydro plant
* Eyes trade links with drugs firm and aluminium smelter
By Maja Zuvela
SARAJEVO, April 7 (Reuters) - Mitsui & Co, Japan's second-biggest trading house, could invest up to 200 million euros ($286 million) in Bosnia's energy sector and is also eyeing opportunities in aluminium and drugs, top officials said.
Shunsuke Nakagawara, the general manager of Mitsui & Co business development centre for Eastern Europe and Russia, said the group is interested in Bosnia's wind, solar and hydro-power resources and would soon start talks on new projects.
"Bosnia has a lot hydro-power potential and for the start we are interested to invest up to 200 million euros into a new hydro-power station here," he said on the sidelines of a business conference.
"If there are other good business opportunities, we are ready to invest more," Nakagawara added.
Bosnia gets 40 percent of its electricity from hydro-power plants and the remainder from coal-fired plants. Unlike other countries in the region, which rely on imports to cover much of their consumption, it is able to export power, helped by its hydro potential.
Governments of its two autonomous regions, the Muslim-Croat federation and the Serb Republic, aim to attract some 16 billion Bosnian marka ($11.7 billion) of investments into the energy sector over a decade to boost output and meet growing demand.
The plans include overhaul of units at communist-era coal-fired plants and building of new, more environment-friendly units, as well as the construction of a series of new hydro power plants and wind parks.
DRUGS, ALUMINIUM
Nakagawara said that Mitsui & Co was also exploring business cooperation with Bosnia's top drugs firm Bosnalijek.
"Bosnalijek is a unique company because of its trade links with South African and also Middle East markets," he said.
Mitsui Chemicals is planning an expansion to new markets, said Nakagawara. "So, maybe we have some business chance with Bosnalijek to help our Japanese branch channel the products to Middle East and South Africa".
Rikukawa Takao, the general manager of Mitsui & Co Budapest office, told Reuters the company also wants to establish trade links with Bosnia's sole aluminium smelter Aluminij Mostar, the top exporter, with much of its output destined for construction and car industries in the European Union.
"We are mainly interested in trade cooperation but also we want to study the company and examine what is the energy cost in its aluminium production," he said.
"We would first set up trade links to get to know each other better," Takao added.
The federation government annulled a tender for the sale of a majority stake in Aluminij last year after the top bidder, the Swiss-based commodities trader Glencore International AG, had set cheap power supplies as a condition which the government was unwilling to meet.
Aluminij has often complained over high power prices and urged the government to help it get cheaper electricity arguing that power prices account for 60 percent of the cost to produce one tonne of metal.
The smelter located in the southern town of Mostar expects to produce a record 128,500 tonnes of primary aluminium this year, helped by better demand and a return to full capacity in late 2010. (Editing by Igor Ilic and Erica Billingham)