EBRD, EIB to lend 130 mln euro to Croatia's energy co HEP

The European Bank for Reconstructin and Development (EBRD) and the European Investment Bank (EIB) will provide loans totaling up to 130 million euro ($152.3 million) to Croatia's energy company HEP to finance investments in new electricity and heat cogeneration units in Zagreb, the EBRD said on Tuesday.

The inhabitants of Zagreb stand to benefit from a large investment in the modernisation of their electricity and heat supply under a joint effort by the two lenders and the European Commission’s Juncker Plan, the EBRD said in a statement.

The funds, of which the EBRD will lend 87 million euro and the EIB will come up with 43 million euro, will be used for the installation of two low-NOx gas turbines, two heat recovery steam generators and one back pressure steam turbine producing heat and electricity at the Elektrana-toplana combined heat and power (EL TO CHP) plant close to the centre of Zagreb. The capacity of the new combined cycle gas turbine units will be 150 MW of electrical energy and 114 MW of thermal energy, with lower greenhouse gas emissions.

The new units will be fuelled by low-emission gas, and generate electricity for the grid and heat for district heating in north-western Zagreb, replacing obsolete, mostly heat-only, gas and oil-fired units.

"It is a critical part of Zagreb’s energy infrastructure and the investment will ensure implementation of a modern and environmentally friendly project satisfying the heating requirements of the city and all national and EU environmental standards," the EBRD said.

The project will be implemented at Elektrana-toplana Zagreb, a power plant fully owned and operated by HEP Group.

The EIB loan will be guaranteed by the European Fund for Strategic Investments (EFSI), which is the central pillar of the Investment Plan for Europe (Juncker Plan). The EFSI support makes it possible to provide loan conditions aligned to the economic lifetime of the financed asset and is expected to act as a catalyst in bringing in private sector banks.

"This innovative operation supported by the EIB, the Investment Plan for Europe and the EBRD will improve the quality of life of the citizens of Zagreb by reducing pollution levels and ensuring reliable supply to the city’s district heating network," EIB vice president Dario Scannapieco is quoted saying.

The EBRD signed its first project in Croatia in 1994 and has invested over 3.67 billion euro in 199 projects in the country to date. The European Investment Bank (EIB) is the European Union’s bank and the the long-term lending institution of the EU.

($=0.8538 euro)

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