Minister Piletić Launches RMOD Solar Power Plant

On the occasion of marking 20 years of pension insurance companies in the Republic of Croatia, the RMOD solar power plant was launched yesterday. The ceremony was attended by the Minister of Labor, Pension System, Family and Social Policy, Marin Piletić. Topics discussed at the conference marking 20 years of Raiffeisen MOD’s operation included where to direct investments in the next 20 years, what companies should consider to strategically align their operations with the green transition, the main demographic challenges, expected trends, and whether the pension system in the Republic of Croatia is sustainable.

New Opportunities for Sustainable Investment

Krešimir Ivanda from the Department of Demography at the Faculty of Economics, University of Zagreb, emphasized that demographic measures are welcome and necessary but not crucial; they should come as part of addressing much more complex and important problems that plague Croatian society and the economy. Alongside the demographic challenges we face, the unfavorable ratio of workers to retirees (1:1.3) necessitates expanding the forms and opportunities for investing the assets held by MODs and pension companies.

At the end of the first quarter of 2022, MODs managed assets exceeding 2 billion kuna, and over 14,000 monthly pensions were paid out.

The structure of the portfolios of pension insurance companies is changing and moving towards greater diversification of investments, so in addition to investing in financial assets such as bonds, stocks, and shares in investment funds, companies are seeking new, sustainable investment opportunities aimed at achieving stable returns. 

One such investment is over 100 million kuna in the ‘Mani’ Business Center in Buzin. The complex includes four office buildings on whose roofs 761 photovoltaic panels with an installed capacity of 350KWh have been installed, which will annually produce 375MWh of electricity fed into the grid. To enhance the investment while contributing to the reduction of global greenhouse gas emissions, energy-efficient LED lighting has been installed in and around the center in a short period. This winter, gas heating in the premises was replaced with heat pumps, significantly reducing the gas bills for the center’s users.

Revenue from the leases of the ‘Mani’ business complex, as well as revenue from the sale of electricity, contribute to a more secure payment of pensions. The total investment in the entire project at the ‘Mani’ Business Center is 15 million euros, and the expected return on investment in the solar power plant is 7-9 years, while the return on investment in the ‘Mani’ Business Center is actually somewhat higher, at 12-15 years.

By launching the solar power plant, Raiffeisen Pension Insurance Company has completed the first two phases of its strategic business orientation plan in line with the green transition.

– This is our second phase, the solar power plant. We have two more phases, i.e., investments that will fully green this business complex, which are electric vehicle charging stations and additional heating through the data center – said Željko Bedenic, CEO of RMOD, adding that what we can change in the current system is the way we manage funds and investments.

The launch of the solar power plant was also supported by Minister Piletić.

– We want to support such projects through amendments to the law so that the money of our retirees, i.e., insured persons, is safe and profitable. Such projects are directly related to inflation, so at times when we have somewhat lower returns from pension funds and companies, they are an excellent opportunity to expand investment options to ensure safer pension payments – said Piletić, adding that the Croatian pension system is secure, and the government’s task is to be adequate and responsive in the long term.