HEP gets government approval to borrow EUR 63 million

Croatia’s state-owned power producer Hrvatska elektroprivreda (HEP Group) received approval from the government to take a EUR 63 million loan from the European Investment Bank (EIB). The purpose of the loan is to reimburse the company for the funds it already spent on renewable energy projects.

HEP got the green light for the loan so that it can cover the costs of six projects – one wind farm and five solar power plants, said Minister of Economy and Sustainable Development Tomislav Ćorić. He called it a reimbursement of funds that were spent on building the new capacities, but he failed to identify them.

This year the company finished its first wind farm, Korlat, located in Dalmatia. It has a capacity of 58 MW and the investment was worth EUR 66 million. HEP said annual production would be 170 GWh, which is 1% of electricity consumption in Croatia. Korlat sells its output in the market, without a guaranteed purchase price.

The company connected its first wind power plant to the grid this year

The utility plans to increase the share of renewable energy sources from 35% to more than 50% by 2030. HEP Group recently signed agreements with local authorities for seven solar power plant projects of 60 MW in total.

Government adopts energy efficiency program

At the same session, the government adopted the energy efficiency program for the decarbonization of the energy sector. It is included in the National Recovery and Resilience Plan (NPOO).

Total investment in the improvement of energy efficiency of the district heating system by 2030 is envisaged to reach EUR 400 million, while the government intends to spend EUR 178.6 million from 2031 to 2050.

Minister Ćorić explained EUR 30 million is available from the NPOO for the support for energy efficiency in district heating systems and renewable energy sources for the decarbonization of the energy sector, while that EUR 61 million is available for the industrial sector, also from the NPOO, for the implementation of the program.

Of note, the European Commission recently approved Croatia’s EUR 783 million scheme to support electricity production from renewable sources through 2023.