The European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) has announced to proceed with its plans to financially support the construction of the 600MW Termoelektrarna Šoštanj (TEŠ) thermal power plant in Slovenia.

The cost for the modernization of the lignite-fired plant is estimated to be about EUR1.2bn.

EIB will fund the project by providing EUR550m, EBRD will provide EUR200m, whereas the remaining cost will be funded by the government.

The new steam turbine unit 6 will be constructed within the boundaries of the existing Šoštanj Power Plant in the town of Šoštanj, north-east Slovenia.

Upon completion of the project, the new unit with higher efficiency will replace the existing five units and produce up to 30% of more electricity and emit no additional carbon dioxide in the environment.

EIB and EBRD will jointly fund the project, after the banks had conducted a thorough evaluation of the project, as per the conditions for disbursement set under the relevant Finance Contract.