By Natasa Radic – Zagreb
Croatian Electricity Company (HEP) announced that it terminated the agreement with the European Bank for Reconstruction and Development on financing the construction of hydroelectric power plant Ombla.
Loan agreement was worth 125 million euros and it was signed in 2011. The decision to terminate the contract was indirectly announced by the Minister of Environment and Nature Mihael Zmajlovic, who recently said that the EBRD will finance Ombla only when HEP complies with the relevant requirements of the Ministry considering the environmental protection. The minister then said that HEP refuses to comply with the requirements of the ministry.
In its press release HEP says that the company was guided by the precautionary principle, and in accordance with the recommendation of the Ministry of Environment and Nature Protection, prepared for further harmonization of project documentation for HPP Ombla with current national and international regulations on Protection of Nature and operations in the network in order to apply the highest standards of the environmental protection.
The statement pointed out that due to the expected duration of the procedure, and to avoid further costs, HEP and EBRD reached an agreement on the termination of the loan.
Economy Minister Ivan Vrdoljak called the termination as a wise move.
-HEP was paying heavily for the activated credit that was not realized. Until it comes to obtaining all the necessary permits for the project, I believe it is foolish to pay millions and millions of interest rates to EBRD without using the loan itself – said the Minister of Economy Vrdoljak.
He pointed out that Croatia will find financiers to build power plants in Ombla when all conditions are met for its construction.