I forgot my password

Croatia's HEP, Japan's Marubeni Talks on Plomin C Project Close to Wrapup - Report

Croatian state-owned power utility group HEP and Japan's Marubeni are close to completing negotiations on the construction and management of the Plomin C thermal power plant (TPP), local media reported on Monday.

The two companies, which have been in active talks for a year, are due to shortly sign agreements related to the project's implementation and financing, news portal Poslovni.hr reported quoting Marubeni Europower president Hiroshi Tachigami.

Tachigami also said that talks have been launched with several international banks, including a few from Japan.

In September, HEP named Marubeni preferred bidder in a procedure for selecting a strategic partner on the project which attracted three offers. In March the parties signed an agreement to enter into exclusive talks.

HEP earlier said the project is worth 800 million euro ($887.9 million), as the strategic partner would design, engineer, finance, build, operate and maintainthe 500 megawatt coal-fired Plomin C power station.

Tachigami explained that the construction of the plant will be financed with share capital and debt, as HEP and Marubeni will inject equity capital and agree on a financing plan which will appeal to a majority of international credit agencies.

Tachigami added that Plomin C will reduce Croatia’s dependency on imported electricity as it is due to produce some 3.5 TWh annually, equal to 20% of Croatia’s yearly consumption. He explained that in terms of environment protection, the replacement of the old Plomin plant by TPP Plomin C will cut emissions drastically, including shaving 22% per kWh off the CO2 currently emitted.

However, in February, Croatia’s environment minister said that the new government may call off the planned construction of the 500 MW Plomin C thermal power plant in order to comply with the European Union's plans to boost renewable energy and reduce CO2 emissions. The environment ministry is considering a new energy strategy aimed at turning Croatia's economy towards sustainable and low carbon development with a view of mitigating the effects of climate change, Slaven Dobrovic said.

Asked about the deal with Marubeni, Dobrovic said at the time that he is not aware of the technicalities of the negotiations, but added that any possible liabilities would be incomparable to the damage that such a facility would create because it is an unsustainable system, both economically and environmentally.

HEP group owns and operates over 4,000 MW of installed generation capacity and 974 MW of heat production capacity, including 25 hydroelectric plants and eight thermal power plants fired by oil, natural gas or coal.

(SEE News)

EVENTS East Mediterranean: The New Natural Gas Frontier Energy & Development 2019

PUBLICATIONS Long-Term Gas Contracting Terms, definitions, pricing - Therory and practice The Greek Energy Sector 2019 SEEEO 2016-2017 More