Croatia sees €10 bln energy investments by 2020

“The energy sector will be a key factor for the growth of our gross domestic product in the next 12 years because total investment in the sector should be €10 billion,” Deputy Prime Minister Damir Polancec told an energy panel in Zagreb. “The electricity sector alone needs some €4.5 billion of investment because we must almost double the capacity, which is some 4,000 megawatts today, and we need another 3,500MW until 2020,” said Polancec, who is also economy minister.

Given the huge investment scale, Croatia should open the doors to private investment in the sector, he said. Energy is still dominated by state-owned utilities. At the moment, Croatia imports 40% of its annual gas consumption, mostly from Russia, 80% of oil products and slightly more than 20% of electric power. Polancec said a comprehensive, medium-term energy strategy for Croatia, which hopes to join the European Union around 2011, should be finalized by the end of this month.

The government hopes an international energy consortium comprising local firms will soon start building a liquefied natural gas terminal on the Adriatic coast, to cut dependency on Russian pipeline gas. The terminal should be operational by 2014.

Croatia is also mulling possibilities of connecting to a gas pipeline in its northern neighbor Hungary, and Ionian-Adriatic gas pipeline connecting Europe with the Caspian basin. Polancec also said Croatia may revive talks on the doomed Druzhba-Adria oil pipeline, which was blocked due to local environmental concerns. “We need to talk to the Russians, to see what it is they may want now,” Polancec said. (Reuters)