Croatia: Amlin Holdings Holland to sue Gov for obstruction of their CHP investment project

, SEE Energy News

Dutch company Amlin Holding is starting the legal procedure against Croatia in European courts for the obstruction of their biomass CHP plant investment project.

Croatia showed in the case of the project TEKI that it uses its institutions and state owned companies to obstruct the projects, the Dutch claim.

Recently the Croatian ministry of economy got the letter from the Dutch investor Amlin Holding that they are initiating a legal procedure against Croatia in front of the European Court and that they want compensation for the blocking of their investment in the construction of the thermal power plant fueled by biomass in Koprivnički Ivanac.

It is the project known as TEKI, which was initiated by Amlin in 2009. They were attracted by the Croatian invites that Croatia is open for the investments into “green energy” the regional media report.

The power plant was supposed to be one of the biggest biomass plants in Croatia, with the capacity of 20 MW. 85 million euro was supposed to be invested and 150 new jobs were supposed to be open. However since the beginning the project got blocked in both local and state level. Through a company which was founded in Croatia E2G more than 8 million euro was invested in order to buy land for the plant and obtain necessary location and construction permits as well as other documentation for the project.

The first obstructions and changes of the regulations started with the tender to buy biomass from Croatian forests, which is the only supplier of the 160 thousand tons of biomass. The fight for the contract lasted for years, because the tender was annulled and passed through long procedures. In 2011 they finally started with the implementation of the most important part of the project – getting the contract on the purchase of the energy (PPA) signed by HROTE. In order to achieve that they were supposed to report the project to HERA in order to get the Initial decision on getting the status of the favored energy producer. TEKI got this decision in the spring of 2012 and two months later PPA was signed with HROTE.

EBRD got involved in the story, when it initiated the procedure of the funding of the project. Just when it appeared that the project is moving towards realization, the criteria for the contract on biomass changed so that the minimal yearly efficiency was raised to 50 percent and previously it was 37 percent so the investor had to change the concept of the power plant so it could deliver heating as well as electricity. This change required a new location permit, a new assessment of the environment impact and documentation for the control of pollution prevention. As they were being late the deadlines from HERA decision were getting closer to expiration as well as deadlines from the biomass contract, so the investor went to the Ministry of economy.

They made an appeal to EBRD and in the summer of 2014 there was a meeting at the Ministry, but one month later a “cold shower” came – a notice from HROTE that PPA is annulled because the decision on the status of favored producer from HERA expired. The annulment is the result of the change in regulations, which resulted in the withdrawal of EBRD and other partners from the project, said the investor from Holland. In the meantime the investor got new permit but they did not get a new PPA.

“Republic of Croatia showed in TEKI case that they are a bad partner for the foreign investors and that they are ready to obstruct through its institutions and state owned companies, the projects that bring new jobs, and fulfill goals in the area of renewable energy sources and 10 million euro investments. We are witnesses that not even entering EU can change the situation in Croatia and investment conditions are still not regulated, while there is no intention of improving things” Amlin said for Poslovni dnevnik.

We have fulfilled all our obligations to Croatia, they added, but Croatia jeopardized not only business arrangements but also the Contract on the promotion and mutual protection of the investment between Croatia and Holland, transmits