Investment focus: Slovenia gets energy boost

A loan of €350 million will be provided for the modernisation and efficiency increase of electricity generation from lignite, a major Slovenian fuel resource. This project covers the design, construction and commissioning of a new 600MW steam turbine power plant in Šoštanj in central Slovenia. The power generation unit will replace 410MW of existing lignite-fired capacity. Due to more efficient power generation, it will render a 28 percent reduction in the carbon intensity of the electricity produced by the concerned block of the thermal power plant. Operating in co-generation mode, it will also supply heat to the local district heating system.

This project is of high importance for the area as it will contribute to secure electricity supply, exploit local fuel resources and support employment in a convergence region. As such, it is fully in line with EIB’s Energy Policy “Clean Energy for Europe: A reinforced EIB contribution”.

The Bank will also support the completion of the construction and operation of the first pumped-storage power plant located on the Soča River, close to Nova Gorica, with an additional €13 million loan. The project will decrease Slovenia’s dependence on fossil fuels and help the country to meet its commitments with respect to reductions in greenhouse gas emissions. The current loan will increase the EIB financing of this project to €56 million.

The new Avče hydropower pumped-storage power plant will use off-peak electricity at night to pump water, and the flow will be reversed and used for electricity generation at peak hours. It will have an output of 185MW and it will operate alongside the existing hydropower plants on the Soča River.

Both power plant projects will be promoted by the Holding Slovenske Elektrarne Group (Slovenian Electrical Power Utility), which is responsible for well over 50 percent of total electricity production in Slovenia. The EIB has a well-developed and productive cooperation with the HSE Group. Previously, the Bank provided €130 million in loans for the financing of three electricity generation projects: two hydropower plants and the aforementioned pumping station.

Another EIB loan of €30 million will go to financing various small and medium sized investments with environmental benefits related to the reduction of air and water pollution, including greenhouse gases. EIB funds are taking the form of a framework loan to the Environmental Development Fund of the Republic of Slovenia (Eco Fund), Slovenia’s main vehicle to provide financing to environmental projects in accordance with national and EU priorities. These projects will be pursued by Slovenian municipalities, public and private companies, as well as individual households. Eco Fund will on lend to projects with a particular focus on energy efficiency, renewable ‘green’ energy (biomass, solar and wind energy), and water and wastewater projects.

This loan is a continuation of the successful cooperation with the Eco Fund that benefited from an EIB loan of €10 million in 2001. These funds were fully used to co-finance investments by the Slovenian public and corporate sector, contributing to the reduction of water and air pollution in line with the Slovenian National Environmental Action Plan.