Dutch investor sues government for blocked project

Amlyn Holding BV, registered in Amsterdam, informed the Ministry of Economy of Croatia in December that it had started a process the European Court of Arbitration. It is asking for payment of damages because of a blockage imposed on the construction of a woody biomass–fired power plant in Koprivnički Ivanec in the country’s north, portal Poslovni.hr said.

The firm launched the project in 2009 under the name TEKI Amlyn, encouraged by calls from the government, which stated it is ready for investment in green energy. The 20 MW facility was supposed to be one of the biggest ones in Croatia of its kind, and EUR 85 million was planned for investment. The power plant was supposed to employ 150 people, but the company claims it faced obstruction at the local and state levels. E2G, the company which Amlyn established in Croatia, invested EUR 8 million in land purchase and procedures for permits and other documents, the Dutch firm argues.

The first blocks occurred during the public procurement for biomass from the public forest management company Hrvatske šume d. o. o., the only supplier, the article said. The struggle for a contract lasted for years, as the procedures were suspended and annulled. Finally in 2001 the company received a power purchase agreement (PPA) from HROTE, energy market operator. Still, the implementation required an application at regulatory agency HERA for the status of a privileged energy producer. It was approved in the spring of 2012.

The European Bank for Reconstruction and Development stepped in with financing, but subsequently the biomass contract criteria changed and the minimum efficiency was raised to 50%, while the project was planned for 37%, according to the article. The investor needed to change the concept so that the possibility of heat supply is introduced, which wasn’t foreseen in the PPA. The alteration meant new permits were needed. Later the contract was annulled as the status expired, so EBRD and other partners pulled away, Amlyn said.