HEP AND ENRON INITIAL CONTRACT ON PURCHASE OF ELECTRICITY

ZAGREB, March 30 (Hina) - The Croatian Power Supply (HEP) and the US company Enron on Tuesday initialled a contract on the purchase of electricity from a gas-fired thermal power plant, to be built by Enron in the vicinity of the Croatian capital Zagreb. The 240 megawatt gas-fired thermal power plant Jertovac will become HEP's property after 20 years of operation. The value of the project is estimated at US$1.2 billion. Construction works should begin in 18 months. HEP director Damir Begovic said that once the contract is signed, the US partner would negotiate on its own the purchase of additional quantities of gas needed for the operation of the plant. The HEP has signed a contract on the purchase of gas with the Croatian oil company INA. The delivery of additional quantities of gas will be discussed with the Russian partner Gasprom. Once these talks are finished, the price of electricity from the Jertovac plant will be known and the contract will be signed. An advisor with Enron, Zdenka Gast, who initialled the contract on behalf of the US company, said the investment would open the door to other US companies, which are very interested in investing into Croatia. She said the initialling was a triumph of the late US Commerce Minister Ron Brown's mission. Brown died in a plane crash near Dubrovnik three years ago. Talks on the investment into the Jertovac plant started with the signing of a Memorandum of Understanding in July 1996. The three- year talks resulted in the initialling of the contract by Enron in February. The Croatian Government on Monday approved the initialling of the contract by the HEP. (hina) jn rml