Energy companies Gen energija and Istrabenz Gorenje energetski sistemi (IGES) on Friday established a 50:50 joint venture, GEN-I, which will sell electricity in Slovenia and the EU.
Under the deal, Gen Energija acquired a 50% stake in Istrabenz Gorenje, which had previously been in sole ownership of IGES, and renamed Istrabenz Gorenje to GEN-I.
The two partners also signed an agreement whereby GEN-I would market electricity produced by Gen energija, which is state-owned and manages Slovenia's 50% stake in the Krsko Nuclear Power Plant.
GEN-I will sell 30% of Gen energija's output in 2007, 50% in 2008 and eventually 60%.
Martin Novsak, the director of Gen energija, told the press that the joint venture was a part of the development of the company's marketing functions.
In addition, it will secure backup power in case of supply disruptions at gen energija and for periods when the N-plant is shut down for repairs.
Igor Salamun, the chief supervisor at Gen energija, said this would boost competition on the energy market, which is in line with the government's guidelines.
According to forecasts, GEN-I will have purchased and sold 1,900 GWh of electricity this year, with the volume set to rise to 4,000 GWh a year over the coming decade.
Igor Bavcar, the boss of the holding Istrabenz and chief supervisor at IGEN, said this was a great step for Istrabenz.
This form of public-private partnership is a true indicator of future cooperation on the electricity market, he said.
The chairman of IGES, Robert Golob, added that the establishment of the new company means users now have the choice of a second electricity provider.
This is just the latest development on the Slovenian energy market after the government adopted the blueprint for the privatisation of the energy sector in late July.
To create competition on the market, the government decided it would curb the power of the dominant player, HSE, by transferring the Brestanica thermal power plant and the hydro plants on the Sava onto Gen energija.
HSE will remain the owner of hydro plants on the Drava and Soca rivers, the Sostanj and Trbovlje thermal power plants and the Velenje coal mine.
According to plans, HSE will ultimately be privatised, while Gen energija will remain in state ownership, as the state cannot sell it because of the stake it holds in the Krsko N-plant.
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