The management of Elektroprivreda RS said on Thursday, December 15, that the decision on the debt of the RS at the Credit Bank for Reconstruction from Frankfurt (KfW) in the amount of EUR 60 million for the construction of wind farms in Hrgud Berkovic is not illegal and that the maximum rate of interest could not be determined because it is linked to the movement of European interbank rates - Euribor.
The debate on the debt was opened after President NDP Dragan Cavic during the debate in the National Assembly announced that it will file an appeal with the Constitutional Court of the Republic of Slovenia in connection with the decision on the debt for the construction of wind farms Hrgud arguing that it is illegal.
– In that decision, it was determined what would be the lowest interest rate, which is contrary to the Law on borrowing, debt and guarantees where precisely specifies that any decision about the debt should contain information on the maximum interest rate. According to this decision the lowest interest rate is 1% and can go up limitless – Cavic said.
Director for the implementation of projects funded by international financial institutions in Elektroprivreda RS Milorad Zivkovic said that the debt of the RS with KfW among favorable loans.
– Since it is a state loan, which is no guarantee of the RS, they belong to the favorable interest rate when comparing with interest in commercial loans. In the case of loans for wind farm Hrgud variable interest rate is favorable because it is based on the effective cost of funding on the European capital market, where it is in the previous period was negative. The example confirms the other two utilities in BiH, which were previously concluded credit agreements, and which are accrued interest were zero percent. The interest rate could be fixed and KfW advocated a rate of 3%, but given the forecasts of their representatives themselves have admitted that the favorable variable interest rate. This path followed the other two utilities in BiH – Zivkovic said.
In addition to loans for the construction of a wind farm, KfW provides additional grant of 200,000 euros to finance evaluation studies of environmental impact.
– Taking into account all previous grants KfW and the fact that in the credit contract does not charge an interest rate for refinancing considered that this is one of the most favorable loan so far – said Zivkovic.
The concession for the construction of a wind farm Hrgud assigned to the Elektroprivreda RS in September 2015 to 50 years. It is anticipated that the wind farm power Hrgud be 48 megawatts, while the annual production amounted to 126 gigawatt-hours of electricity. Elektroprivreda RS previously estimated that this investment could pay off in 10-20 years.