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EBRD assists gas development in Slovenia
Private sector development of gas distribution in Slovenia will get a major boost with the signing of a DM 15 million (ECU 7.9 million) loan from the European Bank for Reconstruction and Development (EBRD), enabling Slovenski Plinovodi d.o.o., a private sector company, to build and operate six retail gas distribution systems in the country. It is the first build-own-operate-transfer (B.O.O.T) structure undertaken by the EBRD with municipalities in the energy sector.
Olivier Descamps, Director of the Slovenia Team at the EBRD, said, “In an industry traditionally dominated by the state, this project is a major step forward. Slovenski Plinovodi will build, own and operate the distribution systems which will then be transferred to the municipalities after 30 years. I anticipate further interest in private sector concession financing for their infrastructure development.”
As a result of the project, Slovene residents will have access to a cleaner and more efficient source of fuel. Natural gas currently accounts for less than 15% of Slovenia’s energy needs. Demand is expected to grow substantially in the near future as users switch to natural gas from more costly and environmentally damaging fuels.
The six municipalities which have granted concessions through competitive tender are Ajdovscina, Lasko, Nova Gorica, Sentjur, Radece and Zagorje, which are situated on the existing gas pipeline which runs east-west across the country. By awarding concessions the municipalities have been able to free up limited financial and managerial resources. The planning of the construction works and their execution are being subcontracted in their entirety to Slovene engineering firms and construction companies. The total project cost is DM 55 million (ECU 29 million).
Slovenski Plinovodi, established in 1992, is controlled by Dondi, a family-owned group of companies based in Italy with international operations in civil engineering, construction and gas distribution. SKB Banka is a minority shareholder of the company. Slovenski Plinovodi will provide gas to households, commercial enterprises and government entities within the concession areas. In addition, the company will offer an instalment purchase plan to assist eligible users in converting homes and businesses to gas. Since it began its marketing efforts in summer 1993, Slovenski Plinovodi has signed contracts to connect nearly 3000 households to the gas supply, with a target of 15,000.
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