March 31, 2023
March 31, 2023
The Government of Croatia approved a shareholder loan of EUR 400 million to state-owned energy utility Hrvatska elektroprivreda – HEP Group.
The Government of Croatia allocated a shareholder loan for state-controlled HEP Group in the amount of EUR 400 million and initiated a recapitalization procedure.
The interest rate is 4.5% per year. The cabinet of Prime Minister Andrej Plenković said the package is necessary for the stabilization of the country’s flagship utility. The Ministry of Economy and Sustainable Development is tasked with providing a EUR 900 capital injection including the new loan.
The package is necessary for the stabilization of the country’s flagship utility
HEP Group is obliged to return the funds within 24 months from getting the second of the two tranches, scheduled for payment by July, or convert the debt to equity.
The whole process is conducted in communication with the European Commission, Plenković said. He stressed HEP would remain in state ownership.
“The message is clear – HEP, as the main national energy company, will continue to remain strong, stable, in 100% state ownership.
Without any privatization,” the prime minister said.
Plenković claimed the government started regulating gas and electricity prices for citizens and the industry at a time when it was necessary and underscored that the intervention was comprehensive, secure, and timely.
Croatia achieved a 6.3% growth in gross domestic product last year, maintained its credit rating, and halted the upward trend in inflation, Plenković added.
The prime minister asserted that citizens and the industry can count on further support and noted that the gas price mechanism is valid for another year and that electricity bills would be regulated until June 30 and
The prime minister said the government’s decision was the first step in helping the national energy company to function normally. It will also help with investments in the energy transition, in his view.
The government said the recapitalization would maintain electricity prices at some of the lowest levels in the European Union.
HEP Group required a capital boost due to the losses it incurred from subsidizing energy prices
HEP Group required a capital boost due to the losses it incurred from subsidizing energy prices and other measures to help citizens and vulnerable energy customers, the government said. The intervention was worth EUR 900 million.
Last year, the government lent EUR 400 million to HEP Group to fill up its gas storage facility in Okoli and another EUR 600 million for energy supply security. The latest decision extends the repayment by 24 months, the cabinet said.
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