darko horvat.jpg
Photograph: HINA/ Daniel KASAP / dk

Today the potential for energy related projects is the same as investments in motorways were in the early 2000s, Croatian SMEs Minister Darko Horvat said on Tuesday, adding that anyone who wishes to invest in the energy sector is welcome.

Opening the "Energy Investment Forum" organised by the Poslovni Dnevnik business magazine in Zagreb, Horvat said that while the construction of  motorways had been going on, it boosted a growth of Gross Domestic Product of 6.8% and now the energy sector had just as much investment potential.

"Croatia lacks energy; gas, oil and electricity. We are part of the integrated European market that lacks energy so any investment that is prepared well has a secure market," Horvat believes.

He underscored that potential investors in the energy sector had the opportunity to take out loans from global financial institutions such as the European Bank for Reconstruction and Development (EBRD) or the World Bank (WB) at interest rates of two or three percent whereas interest on loans for investments in other sectors could be as much as five to seven percent.

"Anyone who wishes to invest in the energy sector is welcome," Horvat said.

He added however, that we are often taken aback when we endeavour to copy the most developed countries. "We are taken aback with the work, order and discipline and commitment involved in a good investment," Minister Horvat said and added that it was up to the state to create a good framework so that people will want to invest in this sector.

"People want to invest and make money. It is up to us through a legislative framework, through a stable environment, to facilitate conditions for quality business activities," he underscored.

Addressing reporters ahead of the forum Minister Horvat said that the government had not backed down from the Plomn C thermal-power plant nor from exploration for oil and gas in the Adriatic however, the government wants to approach these matters in a different way.

"Do not think that the Croatian government has backed down from these projects. These are huge investment potential and necessary for Croatia's energy requirements. We will approach these matters in a different way, that is, to conduct a feasibility study of an LNG terminal, a thermal power plant in Plomin and a hydro-electric plant in Kosinj and other private, smaller investments. That requires a different approach," Horvat said.

He added that the "ball" was in the court of professionals who should not be divided. "They have to be unanimous so that that professional opinion can serve as a basis for policy making."

"Why should we dispute whether Plomin C is necessary or not? In the energy balance it certainly is necessary and it needs to set the presumption that one large contingent of renewable energy sources enter Croatia's electricity grid. On the other hand HEP (the national power provider) has to realise that its key role is creating the preconditions so that all these projects or facilities, primarily of (electricity) generation nature, can be included in the grid. If these two things concur, then there is no reason to start the construction of (new) Plomin (block)," he said.

Marubeni Corporation's top executive Hiroshi Tachigami, who came to Zagreb to attend the forum, said that this Japanese company wanted to invest in the construction of the Plomin C power plant.

Tachigami said that he was aware and understood the environment ministry's cautiousness not just for Croatia but neighbouring countries too but that he believed that a balance was required for energy security. He said that he did not know what Croatia would decide with regard to that project however Marubeni had been involved in this project for three years now and that he hoped that it would soon become a reality.

I cannot say that I'm optimistic, however we will do what we can for this project and for Croatia, Tachigami told reporters.

In early February, the new Environment Protection Minister Slaven Dobrovic said that it was logical to expect that Croatia's new energy strategy would jettison plans to build a coal-fired block within the exiting Plomin thermal power plant.

"Croatia needs to draw up a new energy strategy. Thus, the existing strategy, prepared in 2009, envisages large plants using imported coal. This hardly fits or doesn't fit at all into the European Union's new energy policy and it is logical to expect that our new energy strategy will abandon such a project (the Plomic C block),"  Dobrovic said then.

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