EBRD provided the first loan to support solar energy in Croatia, Encro group received 10 million euros

The first project of the European Bank for Reconstruction and Development (EBRD) with the InvestEU program, designed to support sustainable economy projects, will finance the construction of 30 MW of new solar production capacity in Croatia, which will be the bank’s first solar photovoltaic (PV) project in the country.

The bank has lent 10.6 million euros to three special purpose companies registered in Croatia for the construction and operation of three solar photovoltaic power plants. All three companies are part of Encro group, one of the leading players in the renewable energy market in Croatia owned by the Ćurković family.

The project will have a new structure, relying on the wholesale market for the purchase of produced electricity, and therefore will not benefit from any renewable energy support schemes. This will demonstrate a market alternative for the development of the renewable energy sector in Croatia, according to EBRD.

The higher risks associated with new financing structures will be mitigated by the InvestEU program guarantee. Otherwise, this is the first application of the new program with more than two billion euros of EBRD financing for green or circular economy projects that will be supported by EU guarantees.

Electricity produced in the solar power plants will be sold directly on the market, but will also allow clients to enter into power purchase agreements at their discretion.

– We are proud to be at the forefront of promoting innovative financing for renewable energy. This is the first EBRD financing of a fully commercial renewable energy project in Croatia, as well as the first project under the InvestEU framework for sustainable transition. Alternative power purchase arrangements, as demonstrated in this project, are key to increasing renewable energy – said Grzegorz Zielinski, EBRD’s head of energy in Europe.

Innovative financing methods

Mark Davis, EBRD’s director for Central Europe, stated that solar energy in Croatia is still underdeveloped compared to other EU countries but has serious potential.

– This financing for three 10 MW solar photovoltaic power plants – which have the necessary permits and approvals and will not require further regulatory support, is a welcome signal to other investors that a small solar photovoltaic power plant in Croatia is already profitable – he added.

Iljko Ćurić, CEO and owner of Encro, added that they are proud to support Croatia’s green transition.

– We are proud to support Croatia’s green transition, contributing to the further expansion of installed solar capacity in the country. We are particularly pleased that this is a fully ‘merchant’ project that demonstrates innovative financing methods for renewable energy projects, not only in Croatia but also in the wider region. The implementation of renewable energy on the island of Brač is fully aligned with the energy transition plan developed under the European Commission’s ‘Clean Energy for EU Islands’ initiative and will reduce the island’s energy dependence on the mainland – said Ćurić.

By the way, in the court register, the founder of the Encro company is listed as Iljko Ćurić, and as the chairman of the board, Tomislav Ćurković, son-in-law and son of the former director of HEP, Ante Ćurković, who has been dubbed the ‘king of wind’ in the media due to the amount of investment in wind farms in Croatia.

To date, the EBRD has invested more than 4.6 billion euros in the Croatian economy, and the new state strategy adopted in May lists the transition to a green economy – including renewable energy – as a main priority for the Bank in Croatia.