At today’s 5th regular session, the Supervisory Board of Holding Slovenske elektrarne (HSE) considered the third version of the amended investment plan for the construction of Unit 6 at Termoelektrarna Šoštanj (TEŠ). The members of the Supervisory Board agreed that the amended investment plan constitutes a suitable basis for the beginning of the project's realisation. The Supervisory Board also found that the conditions had been met for HSE to issue a parent guarantee for the investment. At the same time, Director General Borut Meh received prior consent for the capital increase for TEŠ to the amount of up to €85.4 million to be granted in the current year. The green light was also given to the closing arrangements for the remaining sources of financing for this important investment in energy, relevant to both HSE and the country.
The first version of the investment plan was drawn up in 2006 and constituted the basis for acquiring a €350 million loan from the European Investment Bank (EIB). Due to the changing conditions in the cost of specific technological equipment, the cost of electrical energy, CO2 coupons and increases in financing costs (more expensive loans, high interest rates), the estimated value of the investment was constantly changing as well. While the investment costs in April 2009 exceeded €1.34 billion, the estimated value of the project decreased by €239 million to €1.103 billion (or €997 million, excluding the financing costs).
The decrease in investment value was not a consequence of reducing the extent of contracting works, but a consequence of negotiating a lower price for the main technological equipment, a reduction in the price of the desulphurisation device and lower construction work costs, investor costs and financing costs.
When making their decision, the HSE Supervisory Board took several factors into account, particularly the main reasons for the investment. The project of Unit 6 construction at TEŠ was included in the Resolution on National Development Projects for the Period 2007-2023, which means it is strategically relevant to the country. With the addition of Unit 6, TEŠ will be able to increase its current annual output of 3,600 GWh to approx. 4,700 GWh of electrical energy (generated from 4 million tonnes of coal) by 2025, followed by reductions in the use of lignite and production of electrical energy, settling at 2,400 GWh per year by 2054. Another important fact is that the better utilisation rate of Unit 6 (up to 43%) will contribute to a significant reduction in the influence of dust particles, SO2, NOx, CO and CO2 on the environment. To generate the same amount of electrical energy that was produced in units 1-5 in 2007, Unit 6 will require 3 rather than 4 million tonnes of lignite. CO2 emissions per unit of energy produced will decrease from 1.2 kg/kWh to 0.85 kg/kWh, the more efficient desulphurisation devices will contribute to reducing SO2 emissions by two thirds and the NOx emissions by three quarters. The noise level around TEŠ 6 will also be 70% lower. In the initial operating stages of Unit 6, the total production power of TEŠ will increase by only 190 MW and then gradually decrease as units 1-4 are shut down. Lastly, the construction of Unit 6 provides a scenario for the gradual shutdown of the Premogovnik Velenje mine that is socially and financially acceptable for the Šaleška dolina valley and the country. The fact is that by the end of the Unit 6 service life (planned for 2054), the coal mining activities in the Šaleška dolina valley will also come to an end.
The investment in Unit 6 will be financed as follows: €300 million from own funds of HSE and partner/partners, €100 million from own funds of the investor (i.e. TEŠ), approx. €500 million from EIB and EBRD loans and €200 million from other loans (HSE, commercial banks, partners).
Franc Žerdin, Chairman of the HSE Supervisory Board, expressed his satisfaction at the end of the session: “Following a long and demanding negotiation and coordination process, connected to the investment in the construction of Unit 6, I'm happy to find that the necessary conditions to begin this demanding investment in Unit 6 have been met. By order of the HSE Supervisory Board, an expert group for the internal control of the investment will be appointed and company management will report its findings to the Board at every session.” |
