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EBRD loan to restore electric power supply in Croatia
Croatia will improve its power supply to war damaged areas with a loan from the European Bank for Reconstruction and Development (EBRD). The DM 63 million (ECU 34.5 million equivalent) loan to Hrvatska Elektroprivreda (HEP), the Croatian electric utility, will finance the rehabilitation of distribution networks throughout the country. The total project cost is estimated at about DM 100 million. The Croatian utility will provide approximately DM 37 million towards the project.
The loan was signed today in London by Jacques de Larosière, President of the EBRD, Vladimir Kramberger, Assistant Minister of Energy for Croatia, and Damir Begovic, General Manager of HEP.
Mr de Larosière said: "The EBRD is pleased to provide this loan, the third in a series to support the reconstruction of basic infrastructure in Croatia. Restoring power supply to war damaged areas will accelerate the reconstruction process, and the development of economic activity in the country. This project will also improve the financial performance of the power industry, promote institutional reform and help move power sector operations to a commercial environment."
The distribution networks to be upgraded under the project include those at Kriz, Split, Gospic, Sisak, Osijek, Slavonski Brod and Vinkovci. In parallel, a programme of technical cooperation will be launched to: strengthen HEP's financial management and performance; examine the structure of electricity tariffs; promote institutional and regulatory reform of the power sector; and develop guidelines for future investments in the sector according to a least-cost plan.
The EBRD's previous two loans to Croatia are US$ 22 million to rehabilitate the air navigation system, and DM 70.9 million to improve the roads network. Total EBRD loans to the country now amount to approximately ECU 92 million.
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