€200 million loan to modernise Šoštanj Thermal Power Plant

The EBRD Board directors have approved today a loan of up to €200 million loan to the Slovenian state-owned thermal power plant, Termoelektrarna Šoštanj, to co-finance its modernisation programme.

Located in the city of Šoštanj in the north-east of the country, Šoštanj Thermal Power Plant is a fully-owned subsidiary of Holding Slovenske Elektrarne d.o.o., the biggest producer and wholesaler of electricity in Slovenia.

The Šoštanj Thermal Power Plant is an indispensable source of electricity, thermal energy for industrial use and district heating supplying a large part of the Šaleška Valley. It accounts for one third of Slovenia’s electricity production, playing a vital role in Slovenia’s security of supply.

The EBRD loan will support the construction of a new state-of-the-art coal-fired Unit with a capacity of 600 megawatts that will replace five existing low efficiency and high carbon intensity units.

The project  will utilise high energy-efficient technology and will contribute to significant carbon emissions reduction, of around 1.2 million tonnes CO2 annually in the long run. This carbon reduction represents around eight per cent of Slovenia’s total green-house gas emissions. The new unit is also designed to be Carbon Capture Storage ready (CCS-ready), and will be the Bank’s first project able to apply CCS technology.

The EBRD Board based its approval on a staff report which concluded on the basis of an exhaustive review that the project meets the EBRD’s mandate and policies, including its Environmental & Social Policy as well as its strict procurement and integrity standards.

Structured under the Bank’s A/B loan scheme, approximately €100 million will be retained on the EBRD’s account, with the rest of the amount to be syndicated to commercial banks. The project will be co-financed by the European Investment Bank.