Business News

Parliamentary Committee Approves Loan Guarantee for TEŠ

Ljubljana, 13 July (STA) - The parliamentary Finance and Monetary Policy Committee gave its stamp of approval for the state guarantee for a EUR 440m loan for the construction of a new generator at TEŠ coal-fired power plant on Friday after the relevant bill had been stuck in parliament for months.

The nod was expected, as the government decided yesterday to amend the bill, filed by an opposition MP, with a clause that enables it to pull the plug on the guarantee in case the price tag on the project - now estimated at EUR 1.3bn - is to go any higher.

The latest version of the bill states that before the government actually signs the loan guarantee contract, TEŠ will have to revise the generator investment programme and have it assessed by an independent expert.

It is expected that the National Assembly will discuss the bill at an extraordinary session this month, as TEŠ wishes to start drawing the EUR 440m loan from the European Investment Bank (EIB) on 31 July.

The bill proposed by Srečko Meh, an MP of the opposition Social Democrats (SD), in February has been held up in parliament after the government demanded extra safeguards, in particular with regard to costs.

The delay triggered a contract suspension from main contractor in the project, French company Alstom, in mid-June. The number of workers on the construction site was scaled back, but Alstom later relaunched works, agreeing to keep working until the loan guarantee is approved.

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