EIB Approves Loan for Slovenian TEŠ Power Plant

The European Investment Bank (EIB) and European Bank for Reconstruction and Development (EBRD) said on Friday that they had "moved ahead with their financial support" for the construction of a EUR 1.3b new generator at the Šoštanj coal-fired TEŠ power plant.

The banks stated that "their disbursement of funds for the project follows a comprehensive assessment by the banks of the fulfilment of the conditions...set under the relevant finance contract, including those relating to the guarantee of...Slovenia ratified by the Slovenian parliament on 21 December 2012".

The completion of the project will provide Slovenia with a state-of-the-art 600 MW steam turbine power plant with a much higher degree of efficiency than the existing 5 units which the new plant will replace. The new plant will generate up to 30% more electricity with no additional CO2 emissions, the press release says.

The move ends months of uncertainties regarding the funding of the TEŠ 6 project, which was initially in limbo over second thoughts expressed by the government, which had to okay the guarantee, and most recently over reservations on the side of the EIB.

TEŠ has taken out two loans with the EIB, one worth EUR 440m and secured with a state guarantee and one worth EUR 110m with a bank guarantee, as well as a EUR 200m loan with the EBRD. 

While TEŠ has not yet been able to confirm the approval of the loan, the daily Dnevnik reported today that the EIB gave the green light on Wednesday, although it is still harbouring concerns.

Unofficially, the EIB decided to approve the loan after establishing that no legal basis existed for a different decision.

According to Dnevnik, the EIB assessed that the state as TEŠ's guarantor had fulfilled all conditions from the contract signed with the EIB in April 2010.

This means that TEŠ could already be able to start drawing the credit in the coming weeks and pay off the EUR 167.4m due to French energy group Alstom, the principal contractor in the ongoing construction of the generator. 

However, according to Dnevnik, all eyes at EIB are now directed at the European Anti-Fraud Office (OLAF) and other pre-trial and court proceedings under way in Slovenia in connection to TEŠ 6.

Allegedly internal controls notified decision makers at the EIB about suspected corruption risks in the project, which would still allow the bank to revoke its financing approval. This would be the case if authorities discover criminal accountability on the part of one of the contract partners, meaning TEŠ or the state.

Dnevnik says that OLAF had confirmed a few days ago that the investigation, officially launched in June last year, is still ongoing.

Source: sloveniatimes.com