Electricity

Slovenia prepares another capital injection for state-owned utility HSE

Slovenia prepares another capital injection for state-owned utility HSE

Photo: HSE

Published

December 8, 2022

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Published:

December 8, 2022

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The Slovenian State Holding (SDH) got the government’s approval for a capital increase in Holding Slovenske elektrarne of EUR 192 million. The coal and power producer just got a EUR 300 million liquidity injection this week. HSE suffered a massive drop in revenue due to drought and the forced shutdown of its Šoštanj coal plant.

The Government of Slovenia opened the way for the second part of the capital increase in HSE. SDH was told to provide EUR 192 million to the state-owned utility on December 15, after this week the struggling coal and electricity producer already got EUR 300 million.

Drought slashed hydropower revenues by EUR 300 million this year

HSE is suffering financially because of this year’s severe drought and a break in the operation of Slovenia’s only coal power plant, Termoelektrarna Šoštanj – TEŠ. The facility came back online on December 5 after it was halted in mid-November due to coal supply issues, so that it can save the fuel for the winter, when imports would probably cost a lot more. TEŠ and the Premogovnik Velenje coal mine were already on the brink of bankruptcy last year because of a jump in carbon emission costs.

Bad hydrology will slash annual revenues by EUR 300 million and the impact from the drop in production in TEŠ will amount to EUR 170 million. The negative result was only partly offset by a EUR 50 million windfall from electricity trading, Managing Director Tomaž Štokelj said.

The bailout is in the form of a capital increase, but HSE is expected to return the funds

Hydropower output will be 32% lower than planned this year, 36% down from 2021 and the smallest in 20 years. The result in TEŠ is 20% below plan, Štokelj revealed.

Furthermore, HSE owes EUR 700 million. Despite a state guarantee, it only managed to obtain EUR 185 million in bank loans. Apparently the capital boost is also a kind of a liquidity loan, too, as Minister of Finance Klemen Boštjančič said he expects HSE to return the funds by the end of 2024 “if there are no new shocks on the market.”

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