HEP RENEWABLE ENERGY CROATIA

Promoter – Financial Intermediary

HRVATSKA ELEKTROPRIVREDA DD

Location

• Croatia

Description

The project relates to the construction and operation of a number of renewable energy projects (onshore wind and solar photovoltaic (PV)) in Croatia.

Additionality and Impact

The EIB's investment in the project will support the deployment of new renewable energy capacity in Croatia, crucial for the achievement of the 2030 targets set out in the final National Energy and Climate Plan. The financing of this project also contributes to Bank's lending priority objectives on Energy (Renewable Energy) as well as on climate action (transversal) and economic and social cohesion (transversal).
In terms of addressing market failures, this portfolio of wind and solar PV projects produces electricity from low carbon sources and thereby addresses the market failure of negative environmental externalities, through the reduction of carbon and air pollution. Moreover, the projects provide new generation capacity in a sector characterised by incomplete markets (illiquid intra-day markets, limited forward markets / hedging), relying solely on wholesale market revenues without public support. The promoter stated that the projects will not participate in or benefit from any public support scheme in Croatia. They thereby contribute to the policy objective of supporting the market integration of renewable energy projects. The operation is expected to yield good quality and results, due to avoided GHG emissions, fair employment creation and adequate governance systems. The EIB's financial contribution stems from the Bank's capacity to provide long-term financing at favourable conditions which is substantially aligned with the long economic life of the assets to be financed.

Objectives

The development of renewable energy supports EU and national targets for renewable energy generation and contributes to the Bank's renewable energy objectives. The project further contributes to the Bank's priority objectives for climate action.

Sector(s)

• Energy - Electricity, gas, steam and air conditioning supply

Proposed EIB finance (Approximate amount)

EUR 63 million

Total cost (Approximate amount)

EUR 85 million

Environmental aspects

Permits are in place for all sites, following full environmental impact assessment (EIA) processes or have been screened out by the competent authorities, in line with relevant national legislation. Compliance with relevant EU Directives and EIB environmental and social (E&S) standards need to be confirmed during appraisal.

Procurement

The Promoter has to ensure that any procurement procedures have been done in accordance with the relevant applicable EU public procurement rules as transposed into the national legislation. In particular, the Bank will require that calls for international tenders be published in the Official Journal of the EU, as necessary.

Status

Signed - 27/12/2021