Croatia plans $4.8 bln in power investments by 2017

Fri Dec 21, 2012 8:13am EST

Related Topics

* HEP plans to add 2,800 MW capacity to current 4,000 MW

* Financing from own funds, borrowing, strategic partners

* Plans to cut more than 20 pct of workforce

By Igor Ilic

ZAGREB, Dec 21 (Reuters) - Croatian state power board HEP plans to invest more than 27 billion kuna ($4.76 billion) in electricity generation to become self-sufficient in power by 2017, Chief Executive Zlatko Koracevic said on Friday.

Croatia, scheduled to join the European Union next July, now imports more than 30 percent of its power. Since gaining independence in 1991, it has largely neglected investments in new generation plants.

"Now we must catch up, and in the next four years we plan to invest 2.1 billion kuna ($370 million) in upgrading the current facilities and 25.3 billion kuna in building new facilities. This will increase our production capacity by some 2,800 megawatts (MW)," Koracevic told a news conference.

HEP currently operates some 4,000 MW of installed capacity, mostly in hydro-power and thermal plants. It is also a co-owner of a nuclear power plant located in neighbouring EU member Slovenia.

"Our goal is to invest some 12 billion kuna from our own resources, borrow some 9 billion kuna and find strategic partners for the rest," Koracevic said.

The biggest and most advanced projects at the moment include a 500 megawatt coal-fired thermal plant on the northern Adriatic peninsula of Istria and a 68 MW hydro-power plant in the hinterland of the southern Adriatic resort of Dubrovnik.

Meanwhile as part of a drive to improve profitability and efficiency, HEP also plans to reduce its workforce by about 3,000 people in the next four years, the CEO said. It currently employs some 13,000 people.

Last month HEP issued a $500 million bond on foreign markets to finance its debt and investment projects.

In the first six months of this year HEP posted a net loss of 315.5 million kuna, but Koracevic said the company would have a net profit for the full year. He did not provide an exact forecast. ($1 = 5.6748 Croatian kunas) (editing by Zoran Radosavljevic and Jane Baird)

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