Croatia utility builds five plants, seeks regional role

Croatia’s state-owned utility Hrvatska Elektroprivreda (HEP) plans to invest 2 billion euros (US$2.71 billion) by 2013 to boost its production capacity and prepare for a liberalized energy market as the country heads towards European Union entry.

HEP said capital investments in the next six years include a hydropower plant, three gas plants, and a coal-fired thermal plant. Construction of the 42-MW Lesce hydroelectric project already is under way in central Croatia.

“We will build five new plants, for which we will secure 20 percent of funds from our own resources while the rest will come from loans and joint ventures,” HEP’s Chief Executive Ivan Mravak said May 9.

He said the company plans to become a respected regional player on the energy market in southeastern Europe and reach annual revenues of 2 billion euros ($2.71 billion) by 2012, with net profit of about 100 million euros (US$135.4 million).

In 2006, HEP — which has production, transmission, and distribution units — earned 10 billion kuna (US$1.85 billion), while net profit fell to 216 million kuna (US$39.8 million) from 439 million kuna (US$81 million) in 2005.

HEP said it expects to commission the Lesce hydro plant in 2008.

“We also plan to build a new power transmission line to Hungary and connect Croatia and Italy with an underwater cable. Thus, we’ll be able to transport electricity from northeast Europe towards Italy,” he said.

Croatia’s electricity market will be fully liberalized from July 1, 2008. At present it is partly liberalized only for the corporate sector and prices are between 15 and 20 percent lower than those expected on an open market.

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