Ombla HPP

Translated version of this PSD: Croatian

Project Description

The EBRD has approved a senior loan to Hrvatska Elektroprivreda d.d. (“HEP”, or the “Borrower”). The financing will enable the Borrower to build the 68 MW Ombla hydroelectric power plant on the Rijeka Dubrovačka bay near the City of Dubrovnik in Croatia (the “Project”).

Transition Impact

The proposed project will have a transition impact stemming primarily from two factors: (i) it will set out standards for corporate governance and business conduct, through the Borrower’s acceptance to comply with EBRD’s Procurement Policies for Public Sector Operations and international best practices in project implementation and environmental control; and (ii) it will demonstrate new and replicable behaviour and activities, through building a non-conventional hydroelectric power plant (located entirely underground) as well as facilitating the development of clean energy sources and further contributing to Croatia’s targets in renewable energy generation.

The Client

Hrvatska Elektroprivreda d.d. is the holding company which owns 100 per cent of the shares in the unbundled subsidiaries of Croatia’s national utility company, HEP Group. HEP is active in the areas of generation, transmission and distribution of electricity as well as generation and distribution of thermal power and gas. The Borrower is fully owned by the Croatian state.

EBRD Finance

Up to €123.2 million.

Project Cost

€152.4 million.

Environmental Impact

The Project is considered Category A under the 2008 Environmental and Social Policy by virtue of the size of the underground dam and the significance of potential impacts to a proposed Natura 2000 area. As such, an Environmental and Social Impact Assessment – inclusive of a 1999 Enviornmental Impact Assessment, 2008 study of bats in Vilina Cave, Stakeholder Engagement Plan, NonTechnical Summary, and Environmental and Social Action Plan (ESAP) – were disclosed for 120 days of public review and comment. Public consultation meetings were held in Dubrovnik, and further consultation meetings were held with authorities and nongovernmental organizations in Dubrovnik, Zagreb, and Sarajevo.

The most significant potential impacts were determined to be to biodiversity (bats and spring- and cave-dwelling organisms and habitat) and to landowners and residents whose land will be needed for project roads. The area of the project has, since permits were issued by Croatian authorities, been proposed for protection under Natura 2000 upon Croatia’s accession to the European Union in July 2013. The ESAP requires that further biodiversity studies, including an Appropriate Assessment and Biodiversity Management Plan, be completed in line with requirements of the EU Habitats Directive. These will result in specific mitigation and/or compensation, as required by the Directive, that will be completed before Bank financing will be committed for activities that could affect the proposed Natura 2000 area. The studies were completed and disclosed for public review and comment in early March 2013, and further consultations with the public, authorities, and NGOs will be undertaken during the 30-day disclosure period.

In addition, a Resettlement Action Plan has been developed to meet the requirements of Croatian law and EBRD Performance Requirement 5. This Plan is expected to lead to negotiations that allow amicable agreements to compensate for any resettlement or loss of land. The ESAP also requires actions to prevent impacts on a nearby chapel, and a traffic management to control disruption of nearby neighbourhoods by construction traffic. In general, implementation of mitigations and other actions in the ESAP will allow full compliance with all relevant EBRD Performance Requirements, and monitoring required during construction and operation will ensure continued compliance throughout the Project’s life.

Technical Cooperation

None.

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