Saturday, 18 June 2022

Adris Group Announces 3.2 Billion Kuna Investment Plans

June the 18th, 2022 - The Adris Group has announced its massive 3.2 billion kuna investment plans which cover everything from digitialisation to some well known hotels in both Zagreb and Split.

As Poslovni Dnevnik/Jadranka Dozan writes, at last week's general meeting, the Adris Group voted on a proposal for the payment of dividends, which are somewhat more generous than they were last year. During the first week of July, shareholders will receive a payment of 15.50 kuna per share (compared to last year's 12.5 kuna per share and no dividends to speak of whatsoever the year before that), which means that around 254 million kuna will be directed to dividends from accumulated retained earnings from previous years.

In his concluding comment on the business results of the Adris Group and its main components (tourism, insurance and healthy food), CEO Marko Remenar said that the company is operationally and financially ready to take further business steps and engage in the continuation of "active dividend policy".

An ambitious set of plans

In addition to a "well-diversified portfolio of jobs", Remenar also underlined the high investment potential and the ambitious list of the company's prepared investments. For the period until 2024 (including this year), their investment plans are worth an enormous 3.2 billion kuna, and four-fifths of those investments, or about 2.5 billion kuna, relate to the tourism part of the portfolio, which in the case of the Adris Group primarily means the development of the luxury segment tourism.

This year and over the next two years, on average, more than 800 million kuna will be invested in this sector alone, and as the Adris Group's spokesman Predrag Grubic noted, most of that refers to the renovation of some Zagreb hotels (along with Panorama, which is already in the process of renovation, the other one will be Westin) as well as Hotel Marjan in Split, and they'll also continue to invest in camps and resorts. The three-year projections for the insurance sector envisage investments worth 410 million kuna, and in that sense, Croatia osiguranje's focus is being placed primarily on investments in digitalisation.

IT in general accounts for a significant share of the Adris Group's investments, and their current plan to invest around half a billion kuna in business digitalisation by 2025 speaks in favour of this. In terms of the sectors themselves, the three-year plan includes 230 million kuna of investments in the business area of ​​healthy food, ie Cromaris. In the aforementioned investment cycle of 3.2 billion kuna, "possible acquisitions aren't included", Grubic explained.

According to the parliamentary presentation of the Adris Group's results and business activities, over the past two years, despite the uncertainties caused by the coronavirus pandemic, almost 840 million kuna of capital investments were made. Compared to the pre-crisis year of 2019, investment activities continued at a solid pace (450 million in 2020 and 390 million last year), and in the coming period it should be further accelerated. Given that the company is still actually indebted in a low sense, the investment potential is unquestionable. Thanks to a strong recovery in operating profit, which again exceeded an impressive 1 billion kuna last year, the Adris Group entered this year with a debt ratio (net debt to EBITDA) of a mere 0.8.

The management boards of Adris' companies gave their shareholders a brief overview of the main features of how business went during the first four months of this year, and the presented data indicates further improvements in terms of results. As such, Croatia osiguranje (insurance) recorded slightly faster sales growth compared to 5.6 percent growth in the total market, which further strengthened its share here on the domestic market. In the first four months of 2022, the gross written premium of CO was higher by seven percent than it was last year, while net profit was higher by nine percent. In the tourism segment, the first third of this year was marked by strong growth in both sales revenues and physical indicators.

Compared to 82 million kuna in sales revenue back during the first four months of last year, by the end of April this year, they reached a huge 188 million kuna, with the number of occupied units being 2.5 times higher. The state of bookings and reservations at the beginning of June has significantly improved, with Istrian facilities, but also those down in Dubrovnik, exceeding the figures from the pre-pandemic, record year of 2019. 

For more, check out our dedicated business section.

Wednesday, 1 June 2022

Most Investments in Large Dalmatian Hotel Capacities This Season

June the 1st, 2022 - The biggest investments this year will be in Dalmatian hotel capacities, marking a clear shift to the south, as in previous years this trend was dominated more or less entirely by Istria and Kvarner.

As Poslovni Dnevnik/Marija Crnjak writes, unlike in previous years, when Istria and Kvarner would dominate the scene with hotel openings and investments, with the entry into the 2022 summer tourist season, the trend has moved south, and some of these projects will have a significant impact on the overall development of Dalmatia's many destinations this summer.

Makarska, a Central Dalmatian city that has long been waiting for a significant shift in the quality of accommodation, now has something to brag about. The new Valamar and Aminessa projects could mean a new beginning for Makarska's tourism story and a move towards much more added value.

After Stari Grad on the island of Hvar, the grand opening of the second Valamar Hotel Places is being prepared this week in Makarska, in a building that operated under the name of Dalmacija Sunny before the reconstruction began.

Imperial Riviera has invested an enormous 67 million kuna in the Dalmacija Places project, and they took care of additional promotion in the first season of the new facility by bringing the prestigious WTA Makarska tournament, which they co-organised.

The first five-star hotel on the Makarska Riviera brought Aminess into its own portfolio, and hotel Aminess Khalani Beach received its first guests earlier this month. The hotel has 299 rooms, three outdoor pools, a wellness and spa centre, an indoor pool, a gym, three restaurants and three congress halls fit for about 600 guests, and the investment in the facility is worth 50 million euros, making it just one of a number of large investments in Dalmatian hotel capacities in 2022.

The next major hotel projects were located on the neighbouring island of Brac and across on the mainland in the City of Split, and one of them caused great controversy among members of the general public. In a few weeks, we'll be able to see what possible meshing the quaint former fishing town of Postira and the oversized hotel built along the coastline could ever possible happen. The gigantic hotel in this small, quiet island town has caused a lot of controversy among locals.

The management of the hotel that will operate under the name Grand Hotel View has been taken over by the Crikvenica-based Jadran (Adriatic), which is majority owned by pension funds PBZ Croatia Osiguranje and Erste Plavi. The facility, in which about 50 million euros have been invested, has as many as 230 rooms, an indoor and outdoor pool, a wellness centre and a congress hall, and will employ about 100 workers during the summer season. The hotel will be advertising its capacities as of the 1st of July this year.

In September this year, the doors of the long-awaited Dalmatia Tower in Split are set to open, which will house the first Croatian AC Hotel Split Marriott with 214 accommodation units, five modular conference halls with a total capacity of 300 people, as well as a wellness centre with an indoor pool and a gym.

A few weeks ago, the last element of the architectural design of this skyscraper was installed, which, with its 135 metres of height, became the tallest building in all of Croatia. The hotel will, in addition to enriching the overall congress offer, increase the presence of foreign hotel brands. The next big hotel investment in Split is expected from Adris in Hotel Marjan. Most of the huge sums of money being poured into Dalmatian hotel capacities are occurring in and around Split, which will certainly push what Croatia's second largest city and its surroundings and nearby islands can offer to guests from all walks of life.

For more, make sure to check out our dedicated business section.

Sunday, 29 May 2022

More Lika-Senj County Capital Investments on Horizon

May the 29th, 2022 - There will be more Lika-Senj County capital investments on the cards, according to the director of the the European Bank for Reconstruction and Development's Financial Association for the Republic of Croatia (EBRD), who recently paid a visit to Gospic.

As Novi list/Marin Smolcic writes, the director of the EBRD's Financial Association for Croatia, Victoria Zinchuk, spent the day in Lika-Senj County recently and visited Gospic. The visit and meetings were very fruitful, with more Lika-Senj County capital investments on the horizon.

A working meeting of Lika-Senj County prefect, Ernest Petry, with Director Zinchuk was held in Lika-Senj County, where they discussed Lika-Senj County capital investments as we move forward, and the possibility of monitoring them with the use of the European Bank for Reconstruction and Development.

The continuation and expansion of cooperation between the two entities in the coming period was quickly agreed upon. After the meeting, the Director of the EBRD for Croatia, Victoria Zinchuk, who is otherwise a Ukrainian citizen by nationality, accompanied by the host, visited the Reception Centre for the Care of Ukrainian Citizens in Gospic.

She expressed her gratitude to this part of the Republic of Croatia for the rapid way in which it has extended endless amounts of help to Ukraine and fleeing Ukrainian refugees. Through special efforts and a lot of initiative, this Croatian county has created some of the most optimal conditions for the accommodation of refugees from Ukraine staying in Croatia following Russian invasion of their country.

For more on investments across Croatia, both foreign and domestic, make sure to check out our dedicated business section.

Friday, 27 May 2022

New Sukosan Coastal Belt Worth 10 Million Kuna Planned

May the 27th, 2022 - A brand new Sukosan coastal belt is planned, carrying a hefty price tag of ten million kuna with it. The move, which includes a new port, will remodel the ''face'' of Sukosan as viewed from the sea.

As Morski writes, Sukosan will get a new small port worth 10 million kuna by the end of this year. The works are being carried out by the Zadar County Port Authority, and include the rehabilitation of the Sukosan coastal belt spanning a total length of 432 metres and the construction of a new pier on the removed site spanning a length of 12 metres.

''The project of rehabilitation of the Sukosan coastal belt is being implemented with the funds provided by the relevant ministry, the County Port Authority and Zadar County, with the operational support of the Municipality of Sukosan. This is just one in a series of investments in port infrastructure in the wider Zadar County area. Over the past five years, more than 250 million kuna has been invested in the rehabilitation of ports and harbours in all parts of this county, and we have a number of projects in the implementation or preparation phase,'' said Zadar County Prefect Bozidar Longin and the Director of the Zadar County Port Authority, Davor Skibola.

''We're satisfied that Zadar County, ie the County Port Authority, received more than 13 million kuna in national funds last year, and with this money as well as with funds from other sources, we're going to continue to invest in port infrastructure throughout this county. There is a real synergy here and I believe that together we will be able to implement a number of other projects for the benefit of our residents,'' the prefect added.

The estimated duration of the project of arranging a part of the Sukosan coastal belt within the borders of the port area is around fifteen months. The contractor is Akropolis d.o.o. from the City of Split, and professional supervision is being carried out by PI Consulting d.o.o.

''The planned solution envisages the construction of a new coastal wall, the reconstruction of the final surface of the existing piers and the coastal promenade,'' explained Davor Skibola, who also thanked Zadar County and the Ministry of Maritime Affairs, Transport and Infrastructure for systematically assisting in their continued activities.

For more, make sure to check out our dedicated lifestyle section.

Thursday, 24 March 2022

Krizevci, Bjelovar, Karlovac... Croatian Geothermal Investment Wave Begins

March the 24th, 2022 - The Croatian geothermal investment wave has well and truly begun, with investments in many continental Croatian cities, including Bjelovar, Krizevci and Sveta Nedelja.

As Poslovni Dnevnik/Marija Brnic writes, over recent days, announcements from various cities in the continental part of the country that they have managed to obtain grants for the development and preparation of their projects for the use of geothermal springs have been able to be read in the media. The Ministry of Regional Development and EU Funds has conducted two tenders, which cover most of the costs of preparing all of the necessary technical documentation and to increase the capacity of geothermal energy production.

A total of three million euros was made available for documentation preparation projects, and almost five million euros was set aside for increasing production capacity. The Ministry hasn't yet announced the final results, but the cities of Bjelovar, Sveta Nedelja, Krizevci and Karlovac were the first to boast that they had received a positive response.

However, this is just the beginning, the real impetus for the use of geothermal springs, which Croatia abounds in, is yet to come. Through the NPOO programme, the Hydrocarbons Agency was approved 225 million kuna for projects to confirm geothermal potential, with the aim of using geothermal energy in heating.

It is already foreseen in the NPOO that six projects will be included, and although it isn't known by which criteria, a list of who will be candidates for a slice of the "cake" is already ready. It has been announced in the NPOO that Velika Gorica, Osijek, Donji Miholjac, Vukovar, Djurdjenovac, Zapresic, Pozega, Vinkovci and Sisak will all compete to enter the shortlist.

These are all sites that are already known to have great potential, and through the NPOO programme, the intention is to finance the assessment of geothermal deposits in four cases, and in two projects an exploration well would be built, which is crucial for obtaining geothermal water permits and as such continuing the Croatian geothermal investment wave.

The Agency for Hydrocarbons has been authorised to carry out oil and mining works on geothermal potential testing in various locations across the country, and according to the timetable, six selected projects should be ready by mid-2026.

As was made clear in the NPOO, large stand-alone projects aren't planned to support and co-finance on this basis, but the space in the new budget period will be made available through the Competitiveness and Cohesion Operational Programme, through which about 25 projects are planned in this regard.

The city of Sveta Nedelja already has one user of geothermal springs. Late last year, the Ministry of Economy granted a 20-year concession to a private investor, Eko Plodovi, a sister company of Rajska cherry tomatoes, whose geothermal sources provide the energy for greenhouses.

The new project, supported by the Ministry of Regional Development and EU funds provided by Norway, Iceland and Liechtenstein, will be supported by the City of Sveta Nedelja, and Mayor Dario Zurovec says several locations will be valorised.

The choice of locations

"One of them refers to the northwestern area, near the business zone, where geothermal water could be used to heat both public and private spaces, and the other is the southern part of the city, with many industrial consumers and public facilities," said Zurovec. A pool project is also planned, and the study will, according to Zurovec, show where the best location will end up being. The heating of the public swimming pool is also planned, but it isn't yet known at which location it will be built.

However, Bjelovar Mayor Dario Hrebak knows where the swimming pool will be in his area, which will certainly use geothermal springs. The city already has a project ready, it has even obtained building permits, and Bjelovar's pools and the entire system would be heated by a project for which the grants were obtained in these two tenders. More can be read about that here.

Karlovac and its energy company GeotermiKA, which already has a license to explore geothermal sources, managed to provide more than 3.5 million kuna for the development of the project, which intends to ensure the production of heat, primarily for public buildings, hospitals, schools, kindergartens and public lighting.

A step ahead

In addition to European funds being absorbed in this Croatian geothermal investment plan, the preparation of these projects is also being carried out by individual counties, such as Virovitica-Podravina and Osijek-Baranja. In this year's county budget, the people of Virovitica have provided 1.5 million kuna in support for the preparation of all of the documentation for research into the potential of geothermal springs in their area, and the city company Poslovni park Virovitica already has a permit for undertaking all of the research in that area.

Several years ago, Osijek-Slavonia County Prefect Ivan Anusic took secured almost three million kuna for the preparation of all of the study-technical documentation for geothermal potential exploration, also financed from EU sources, which, according to him, detected five micro-locations.

He added that an investment study is currently being prepared, which will determine what is suitable for exploitation in certain areas, ie for the needs of heating, tourism and agrogeothermy, and part for the production of electricity, because the deposits have a temperature of up to 120 celsius.

It has long been known that the Republic of Croatia is very rich in geothermal resources, and it is generally well prepared in terms of project preparation. With the new EU green policy and the current energy crisis culminating in the Ukrainian-Russian war, it has been confirmed that this is no longer a fad and a trend, but a necessity, and those who started with their preparations earlier are certainly at an advantage now.

For more, check out our business section.

Monday, 14 March 2022

Croatian Tech Companies Have Chance at EIB Cash Earmarked for Dual Research

March the 14th, 2022 - Croatian tech companies now have a chance at getting their hands on a slice of the ''cake'' being offered by the European Investment Bank (EIB) following the launch of a Strategic European Security Initiative (SESI) worth up to 6.6 billion euros by the year 2027.

As Poslovni Dnevnik/Ana Blaskovic writes, with the war continuing to rage in Eastern Europe following the Russian invasion, both EU and non-EU European countries are turning to stronger investment in defense and security.

The aforementioned money is earmarked for dual research (for civilian and military use), development and innovation, civilian security infrastructure and state-of-the-art technology projects, from space investment, AI, quantum technology, cyber and bio security including human security, food production and resources like water.

This new initiative will not change the definitions of excluded sectors, which specifically means that the EIB will not continue to finance armaments and defense as it is fundamentally defined. "SESI projects must be dual-purpose and guided by civilian implementation, which means that they're expected to have predominantly civilian use," the bank said.

A chance for the Croatian academic community as well

Gordan Pesic, who is in charge of business development at DOK-ING, has welcomed the EIB's initiative, believing that there are many opportunities within it for Croatian tech companies, but also for the academic community.

"There's certainly room in that programme for Croatian manufacturers, especially for those who close the so-called ''capability gaps'' in terms of security. Among them is DOK-ING, which produces robotic and automated high value-added systems that move people out of imminent danger,'' said Pesic.

Although it doesn't fund arms manufacturers or basic defense, the SESI initiative's propositions leave ample room for maneuver. "Croatian tech companies like the Osijek startup Orqa, Sestan Busch, GDI, and even textile companies developing smart materials could fit into that framework," he said.

DOK ING, at the recently concluded World Defense Show in Saudi Arabia (and about which we recently wrote), attracted a lot of attention from the Saudis with its Chest of Drawers, a unique robotic platform for operating in conditions of chemical, biological, radiological and nuclear hazards.

In addition to the real space sector, according to Pesic, there is also room for research projects taking place in institutions such as the Faculty of Electrical Engineering and Computing and the Faculty of Mechanical Engineering and Naval Architecture, as well as a range of sophisticated computer solutions, such as AI.

The Croatian tech company Orqa, which is now a world-famous startup for highly innovative drone management goggles, has also confirmed its potential interest in this new European funding programme.

"A lot of things we're developing naturally are dual purpose things, from radio communication solutions to remote vision systems, and drone technology in general," explained co-founder and CEO Srdjan Kovacevic, noting that they have used both European and Croatian funding sources effectively in the past.

''We're developing a system for transmitting video signals with low latency, which means that the video signal has a small delay and enables the efficient and precise control of a remote platform (such as a boat, vehicle or drone), it's for hobby drones, but essentially the same technology can be used defensive purposes,'' he explained.

Referring to the current turn of Europe and the EU as a bloc towards strengthening defense and security, Kovacevic says that Europe, unlike the United States, has invested very little in these segments through initiatives of private innovative companies, so in light of current events it is not surprising that there are now attempts being made to try to reduce the gap.

For more on Croatian tech companies, check out our business section.

Tuesday, 1 March 2022

Largest Iskra Investment Halted by Russian Invasion of Ukraine

March the 1st, 2022 - One huge Iskra investment, made by the well known Sibenik-based company, has had to be halted in the wake of the Russian invasion of Ukraine which occurred just several days ago.

As Poslovni Dnevnik/Suzana Varosanec writes, the current outbreak of war in Ukraine following an unjustified Russian invasion has currently halted activities on a project that is vital to Iskra Brodogradiliste 1's largest strategic investment in Sibenik.

Uncertainty loomed over the construction of a floating dock for the overhaul of a 5,000-tonne, 120-metre-long ship, contracted back in November last year with Ukraine's well known Pallada shipyard in Kherson. However, the solidarity of the local people of Sibenik is being shown in action. According to the claims of the director of that Sibenik shipyard, Rok Vuletic, the work in the Ukrainian shipyard, which specialises in the construction of docks, has been suspended due to the state of emergency, and people have been invited to stay at home.

"We're monitoring the development of the unfolding situation, and for now the only thing we're thinking about is that we hope that as few people as possible are suffering. We stand in solidarity with Ukrainian partners; namely, we in Croatia also have the experience of war, so we have full understanding for the situation in which they've found themselves,'' Vuletic pointed out, adding that they hope for an end to the ongoing war operations and stabilisation in the coming days.

Vuletic was in the inspection of the works on the dock about ten days ago, when, he says, everything was going smoothly and according to the dynamics and deadlines. The Iskra investment plan also envisages the modernisation of the company's facilities and infrastructure, the purchase of new equipment for shipbuilding, an increasing of capacities and the raising of energy efficiency.

For more, make sure to check out our business section.

Sunday, 13 February 2022

Kukuljanovo Logistics Centre Result of Yet More Croatian Post Investments

February the 13th, 2022 - The yet-to-be-opened Kukuljanovo logistics centre near the City of Rijeka on the Northern Adriatic is the result of yet more investments made by Croatian post (Hrvatska posta), of which there have been several lately.

As Poslovni Dnevnik/Darko Bicak writes, after spending the cash of an an investment cycle totalling almost one billion kuna over the last five years, most of which went to building new and modernising existing logistics capacities, Croatian Post (HP) is about to open the new Kukuljanovo logistics centre (LC) in the Kukuljanovo industrial zone near Rijeka. The facility is worth 60 million kuna, and it should be in operation in around one month.

Prerequisites for further growth

Croatian post explained that in the previous period, their logistics space in the City of Osijek was expanded, a new logistics centre was built in Zadar, capacities in Bjelovar were expanded and a new sorting centre was built in Velika Gorica near Zagreb, which, totalling a massive 350 million kuna, is the largest investment in Croatian post's history.

According to them, the Kukuljanovo logistics centre with its 5,000 square meters of business space is the final point of investment in infrastructure, which created the preconditions for further logistical growth and development of the company.

“The new Kukuljanovo logistics centre is an important link when it comes to raising the quality and speed of providing our services to all residents who gravitate to this area - Gorski kotar, Istria, Kvarner... Infrastructural investments in the network of sorting plants will have a favourable effect on the overall development of the logistics market across Croatia.

All of the locations of modern sorting plants are strategically selected and are placed in locations that are well connected in terms of traffic and are in line with logistics trends. In the past, such facilities were located in the centres of large cities, and today they're placed on the outskirts along important traffic routes.

The number of locations where the operational part of the shipment business, such as sorting and processing, is performed, while not reducing the number of post offices available, is in more than 800 settlements with a network of 1,016 post offices,'' they said from Croatian post, headed by Ivan Culo.

"With this investment in the Kukuljanovo logistics centre, we're completing this cycle of investments in logistics and logistics infrastructure in accordance with the development strategy. Employees, green energy and digital development are the direction we're heading in. Investing in logistics and sorting capacities, the digitalisation of processes and the ‘last mile’ in the form of a network of parcel machines has brought us to a completely equal position of the leading EU postal operators. We're no longer a trend-following post office, but an equal partner. Global e-commerce retailers recognised us before the emergence of the coronavirus pandemic, and we've justified their trust in us over the last two years,'' Culo added.

In order to be in the trend of the EU Green Agenda, the Kukuljanovo logistics centre will have a solar power plant installed on its roof.

An explosion of logistical needs

The growth of e-commerce and especially Croatia's accession to the European Union (EU) has led to an explosion of logistical needs in this country. The entire logistics sector had to find a solution in a relatively short time and radically change its established ways of meeting the needs of both private and business users.

The situation was further accentuated by the global coronavirus pandemic, and for many people, online shopping and the delivery of goods to their doors has become a substitute for going out shopping in the classic way, ie going to the store. Solutions for the "new normal" do of course exist, but they aren't cheap or fast.

The fact that the transformation of Croatian post, through investments in new technology and infrastructure, has been recognised, is confirmed by the fact that some of the largest Internet retailers, such as Amazon, AboutYou and many others have chosen them for their services in Croatia and the wider region. It's worth noting that Croatian post processes Amazon shipments even for Greece and Cyprus.

For more, make sure to check out our business section.

Friday, 4 February 2022

Croatian Energy Investment: New EU Plan to Inject 6 Billion Euros

February the 4th, 2022 - Croatian energy investment with a European Union (EU) plan to pump in a massive 6 billion euros is attracting a lot of talk among those in the sector.

As Poslovni Dnevnik/Darko Bicak writes, as announced back at the end of last year, the European Union recently presented a plan which, despite being controversial for some, will consider new investments in nuclear energy and gas thermal power plants. On top of that, it will make infrastructure environmentally sustainable, ie green, which means that it will be facilitated institutionally through EU funds and private investments in such projects.

The supplementary delegated act on the taxonomy of climate sustainable activities to mitigate and adapt to climate change, which covers certain energy activities in the gas and nuclear sectors, is particularly interesting for Croatia and Croatian energy investment because there are several projects that could be financed directly from EU funds on that basis.

First of all, we can look at the second block of the Krsko Nuclear Power Plant, which is primarily planned to be built by the neighbouring Slovenes, for which the first permits were issued last year. Croatia is not indifferent to the project and is likely to participate in it. The Krsko NPP was built back in 1983 and it has remained unchanged to this day. It represents an investment, as well as maintenance and the distribution of energy in equal proportions between the two neighbouring nations of Slovenia and Croatia.

Although there are no details about that yet, it is certain that such a model would be applied to Block 2. The estimated cost of the project is between six and 10 billion US dollars, according to green activists in the wider region who oppose expanding nuclear capacity in Krsko and point out that it is, in addition to being dangerous and archaic, too expensive and unprofitable in regard to technology.

It is interesting that most of the opposition to the upgrade of Krsko comes from Austria, where there is a common position of politicians, as well as from the public and activists that this project must be prevented at all costs. Over more recent years, Croatia has invested heavily in gas infrastructure, and a similar trend is expected in the coming period. The LNG project on Krk proved to be important and functional, as an example. All energy experts have warned for the past 20 years, as far as this project is concerned, that LNG gas is too expensive and unprofitable compared to natural gas coming through gas pipelines.

That being said, they also didn't deny that this is a strategic infrastructure project that will give Croatia and the wider region, through energy diversification, much greater geopolitical power in the event of a political or energy crisis in Eastern Europe or the Middle East. A certain level of instability in the Middle East has become a normal situation for several decades now, and trade and energy flows have learned to "live" with it. The current crisis between Russia and Ukraine has been going on for about ten years, and it has recently escalated again, so the possibility of a war that could range from a low-intensity hybrid conflict through a spatially and temporally limited armed conflict to something continental and of global proportions is something we don't even want to think about at the moment.

Gas prices have risen from about 30 US dollars per megawatt (MWh) to almost 100 dollars. Recently, gas on the reference European gas exchange TTF in the Netherlands was just under 80 dollars. Therefore, it is clear that the existing floating LNG, worth a massive 234 million euros, of which the EU gave Croatia 100 million, has already justified its existence today and the authorities are probably already planning the second phase of the project - building a fixed terminal on the coast and increasing the existing capacities of 2.6 billion cubic metres of gas per year. It appears that Croatian energy investment isn't going to stop there, either.

Croatia has turned almost all of its city heating plants, mostly owned by HEP, into gas power plants, and although the authorities have been pretending over more recent years that the Plomin C project doesn't actually exist, nor has it ever existed, it is increasingly likely that, with its originally planned coal technology, it will also be constructed as a large gas power plant, perhaps on LNG given that this thermal power plant has its own port for docking ships, either for unloading coal, or in the future on LNG.

Additionally, a plan of a private investment in a hybrid gas thermal power plant in Slavonski Brod with a total capacity of 500 MW and an estimated investment value of 420 million euros has been operational for about fifteen years now. Only the listed projects in half of NPP Krsko, the fixed LNG terminal, Plomin C and TPP Slavonski Brod total almost six billion euros and it is clear that the new and green EU classification of nuclear and gas technology will have a great positive effect on Croatia and Croatian energy investment as time goes on.

The presented EU proposal will have to be studied by national governments in the coming period, and before it is officially adopted. The fact is that the EU has 27 member states and that each of them has its own energy strategy and position on the positive or negative effects of a certain form of energy, but the EU has come to this in such a way that one or several countries cannot veto the decision. The EU's plan will be rejected only if 20 member states oppose it, and it is already clear that countries like the Netherlands and Denmark don't want gas involved in the Green Plan, because they use it less and less and sometimes even reject it, while on the other hand, gas is of existential importance for Germany.

The nuclear lobbies in the EU are led by France and the Czech Republic, which are the loudest of them all, and aren't typically opposed by many other countries, which have both realised that they will NOT ensure their energy independence for many years to come. Many green associations and institutions, on the other hand, warn that it will be a step backwards because it will make it difficult and stop many renewable energy projects and give the public the so-called Greenwashing, or a false notion which convinces the public that the products, goals and policies of this plan are environmentally friendly.

The Ministry of the Economy and Sustainable Development pointed out that the Republic of Croatia, in accordance with the stated policy and its strategic documents in the field of energy, "Energy Development Strategy of the Republic of Croatia until 2030 with a view to 2050" and the “Integrated National Energy and Climate Plan for the Republic of Croatia”, encourages the development of renewable energy sources and the strengthening of energy efficiency.

"In this policy, we can see a number of opportunities for the Croatian economy, especially in the development of new technologies dedicated to renewable energy sources. In order to ensure further economic development, as well as a sustainable transition to clean and climate-neutral technologies, we believe that the inclusion of investments related to natural gas and nuclear energy can have a positive effect on the decarbonisation processes. Of course, all of the above must be dedicated to the ultimate goal of decarbonisation, both of the energy sector and of the economy as a whole,'' said the aforementioned ministry, headed by Minister Tomislav Coric.

For more on Croatian energy investment, check out our politics section.

Thursday, 3 February 2022

Dubrovnik Valamar Reshuffle Completed, Investments from Autumn

February the 3rd, 2022 - The Dubrovnik Valamar portfolio reshuffle has been completed, and a new investment cycle is set to begin this autumn, following the main summer tourist season.

As Poslovni Dnevnik/Marija Crnjak writes, Valamar Riviera announced on Tuesday that a transaction with Imperial Riviera was concluded on the last day of January, on the transfer of the Dubrovnik Valamar portfolio to Imperial.

These are three hotels which boast a total of 947 accommodation units, Valamar Lacroma Dubrovnik Hotel, Club Dubrovnik Sunny Hotel by Valamar and Tirena Sunny Hotel by Valamar, with an acquisition value of 95.3 million euros and 100,676 euros per accommodation unit.

"Considering the interests of the acquirers of the hotels in question, the financing of this transaction was secured by taking over the company's credit obligations for two club loans with OTP Banka from Split and OTP Banka from Budapest, and four loans from the Croatian Bank for Reconstruction and Development from Zagreb, totaling 90.2 million euros at the current overall weighted average interest rate of 1.36 percent and secured liens on the hotels being transferred, while the remaining amount of 5 million euros will be paid in cash.

These three hotels in the area of ​​Babin Kuk in Dubrovnik, together with the real estate previously entered into the Imperial portfolio in the process of increasing the share capital (with an estimated value of 352.8 million kuna), will form a sustainable and strategically important technological unit,'' they said from Valamar.

They added that through Imperial, a joint company for growth and development, the Dubrovnik Valamar portfolio, as a destination, will start with the further development of its tourism portfolio as soon as this autumn, through significant investments by both Valamar and AZ pension funds.

As previously announced, the five-year investment plan in the destinations of Dubrovnik, Makarska and Rab is worth 2.1 billion kuna.

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