Croatian electricity provider HEP and the European Bank for Reconstruction and Development (EBRD) cancelled a loan agreement for the Ombla hydroelectric plant, HEP announced on Monday, adding that HEP was prepared to adapt the project's documentation and align it with local and European nature protection regulations.
"Keeping in mind precautionary principles and in keeping with recommendations by the Environment and Nature Protection Ministry, HEP is prepared to make some additional adaptations to project documentation for HE Ombla in line with current domestic and European regulations on nature protection and steps concerning the ecological network in line with the highest environment protection standards. Considering the time that this procedure could take and with the aim of avoiding additional costs, HEP and EBRD have cancelled the loan agreement", HEP reported in a press release.
HEP and EBRD have expressed their willingness to continue with cooperation for future investments, the press release says.
HEP and EBRD in November 2011 signed a HRK 123.2 million loan agreement for the construction of a hydroelectric power plant on the Ombla river in the Dubrovnik area of southern Croatia.
This was to be the first underground power station to be built in Croatia and would produce 68 megawatts (MW) of electricity and the entire project was estimated at EUR 150 million.
The loan agreement provided for a feasibility study of biodiversity management which was then conducted by WSP consultants and was presented in March this year.
HEP had said that construction of the power plant would not threaten cave life and that measures would be taken to relieve any negative impact during the preparation, construction and operation of the plant and that these were no obstacles to constructing the plant.
The Ombla project met with wide public objection from environmental organisations that warned that the project was not economically viable and carried a high risk factor.
Environment and Nature Protection Minister Mihael Zmajlovic had said on several occasions that he objected to the construction of the Ombla power plant as HEP's documentation itself noted that construction as was specified would impact the ecological network. He was heard to say that the project documentation which was prepared in the late 1990s was not in line with new environment protection standards and European Union directives.
