The European Investment Bank (EIB) lends EUR 43 million for the construction and operation of the first pumped-storage power plant in Slovenia. The project will decrease Slovenia's dependence on fossil fuels and help the country to meet its commitments with respect to greenhouse gas emission reductions.

The new hydropower pumped-storage power plant Avče with an output of 178 MW will be located on the Soča River in the Julian Alps close to Nova Gorica. The plant will operate complementary to the already existing hydropower plants on the Soča River. It will supply electricity in high demands peaks and use cheaper energy in low consumption periods for pumping water into the plant's headwater basin.

The project will be promoted by the Holding Slovenske Elektrarne Group (Slovenian Electrical Power Utility Company) that produces nearly 60% of the total electricity production in Slovenia and its subsidiary Soake Elektrarne Nova Gorica d.o.o.

The loan represents the first EIB financing in the energy sector of Slovenia. It is part of the power plant investment loan of EUR 130 million approved by the Bank that will finance in the future also the construction and operation of two run-of-river hydro power plants in Slovenia: Blanca and Krsko on the Lower Sava River.

The EIB supports the development of the electricity production from hydropower sources and the rational usage of energy due to their positive impacts on the reduction of the greenhouse gas emissions.

The task of the EIB, the European Union's financing institution, is to contribute towards the integration, balanced development and economic and social cohesion of the Member States. Outside the Union the EIB implements the financial components of agreements concluded under European development aid and cooperation policies.

The EIB made a commitment to increase the renewable energy's share of total new electricity generation capacity financed by the Bank in the EU from some 15% at present to 50% by 2010, including a greater share for non-wind power. This is in line with the EU's target to increase renewable energy's share of electricity generation in the EU to 22% by that time.