Energy Crisis

EUR 1 billion loan for HEP to secure energy supplies

HEP to take loans worth EUR 1 billion to secure energy supplies

Photo: Gerd Altmann from Pixabay

Published

June 7, 2022

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Published:

June 7, 2022

Country:

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The Government of Croatia has given the green light to power utility Hrvatska Elektroprivreda (HEP) to borrow up to EUR 600 million to finance the purchase of electricity, natural gas, coal, and heat, and another EUR 400 million to buy natural gas.

The funds will be used to buy natural gas for the Okoli storage facility and achieve the target agreed by European Union member states to fill up their gas storage capacities to at least 80% before the winter.

Minister of Economy and Sustainable Development Davor Filipović said the government had approved HEP to take loans from commercial banks to provide sufficient quantities of energy for households and companies.

The government will issue state guarantees for HEP’s loans

In its decision on the EUR 600 million credit package, the government noted that due to the extraordinary increase in energy prices (electricity, gas, coal) and the disruption of European and global electricity markets, it approved EUR 637 million in aid in February for households and companies.

The government will issue a state guarantee for all the loans.

HEP will receive additional money from the budget to cover the difference between the purchase and sale prices of gas

According to the second decision, HEP will use EUR 400 million to secure 270.83 million cubic meters of natural gas and store it in the gas storage system operated by Podzemno skladište plina, which manages the Okoli storage unit.

The document reads that HEP will also receive funds from the state budget to cover the difference between the purchase and sale prices for the said gas.

Private companies must also fill up leased storage capacity

The government is also imposing an obligation on private companies that use a part of the capacity in Okoli. E.ON Plin, PPD, MET, INA, Međimurje-plin, and Geoplin must fill a minimum of 63% of their leased capacity by August 1 and at least 74% by October 1.

The goal is for the Okoli storage facility to be 90% full by November 1, the decision reads.

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