EBRD approves 123.2M loan to Croatia's state-owned electricity utility to build Ombla 68-MW hydroelectric plant
November 28, 2011
– €123.2 million syndicated loan to build Ombla hydroelectric plant
The EBRD is helping Croatia to develop its sources of renewable energy with a syndicated loan of up to €123.2 million to Hrvatska Elektroprivreda (HEP), Croatia’s state-owned electricity utility, to finance the construction of the Ombla hydropower plant.
The construction of the new power generation facility that will have a generation capacity of 68 MW will help Croatia to improve its energy security and also diversify its energy supplies. The construction of the hydropower plant will also increase the supply of potable water to the city of Dubrovnik.
In reaching its decision to support the project, the EBRD has acknowledged the environmental challenges that were raised during the due diligence process and public consultation, as well as other issues voiced by the non-governmental organisation (NGO) community.
The Bank will work closely with Hrvatska Elektroprivreda to ensure the project is implemented in line with national legislation as well as the relevant EU directives. In particular, an additional biodiversity study will be undertaken on the project’s potential impact on the integrity and conservation objectives of the proposed Natura 2000 sites and a biodiversity management plan will be prepared. The proceeds of the EBRD loan for the construction works will not be disbursed until a satisfactory study and biodiversity management plan is agreed with Hrvatska Elektroprivreda.
Structured under the EBRD’s A/B loan scheme, the financing facility to Hrvatska Elektroprivreda includes an €80 million portion for the Bank’s account, with the remaining €43.2 million to be syndicated to commercial banks.
“While recognising the technical and environmental challenges the project entails, we also believe the project is important to further develop Croatia’s renewable energy generation capacity, while also having significant benefits for the people of Dubrovnik. We are committed to ensuring the project is implemented in line with our agreed Environmental and Social Action Plan,” said Nandita Parshad, Director for Power and Energy Utilities at the EBRD.
“Hrvatska Elektroprivreda is pleased with our renewed business cooperation with the EBRD in delivering this energy project. We are glad that the EBRD has recognised HEP as a partner, and supported the construction of the Ombla hydropower plant, one of HEP's development projects based on sustainable development as a company's strategic commitment. We are sure that this project has the potential of a significant economic contribution, especially in times of great economic challenges,” said Leo Begovic, President of the Management Board, HEP.
Since the beginning of its operations in Croatia, the EBRD has invested over €2.5 billion in 133 projects in the country, mobilising over €4 billion of investment from other sources of financing.