February 21, 2011
Mr. Brian Ricketts’ letter, in response to your article on EU financial support to the Sostanj coal power plant in Slovenia, needs rectification.
Mr. Ricketts is wrong to write that there is no public funding for the planned 600 MW Sostanj power plant. The European Investment Bank (EIB) itself is a public EU institution. It is owned by the member states and it operates as a non-profit organisation on non-commercial terms.
Its paid in capital comes from the state budgets of EU member states and all its operations are additionally guaranteed with capital subscribed by the states. This is why the bank enjoys an excellent AAA rating and can afford to offer good terms for the borrowers.
It is important to emphasise that the EIB may only finance projects to the extent that funds are not available from other sources on reasonable terms. Therefore, it is clear that the Sostanj power plant could not have attracted enough funding from commercial sources.
Furthermore, the EIB demanded that the Sostanj coal power plant project be guaranteed directly by the Slovenian government. Such a guarantee constitutes public financial support.
All these elements make it clear that the Sostanj power plant in Slovenia is, indeed, mostly supported by public funding and not commercial loans.
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