The Government of Slovenia will provide EUR 403 million to prevent the bankruptcy of coal power plant Šoštanj and the mine in Velenje
Coal mine Velenje and coal power plant Šoštanj (photo: HSE)
Slovenia
Vladimir Spasić
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The government revealed in a new statement that it expects TEŠ and Premogovnik Velenje to go bankrupt early next year
It adopted a bill to provide subsidies and transitional financing for an accelerated and just transition toward a coal exit and beyond it
The legislation envisages a transfer of the two entities into direct state ownership
TEŠ will primarily produce heat and operate through April 2027
The bill stipulates social security and job protection for employees in the mine and the thermal power plant
It said it would enable the inhabitants of the Šalek valley to live decently
The proposal was prepared by the Ministry of the Environment
About EUR 324 million will be allocated to support the production of heat
TEŠ would primarily provide heat for district heating for the Šalek valley – more precisely
About EUR 324 million would be allocated to support the production of heat
It would prevent the bankruptcy of the power plant and mine
which was expected at the beginning of next year at the height of the winter heating season
The initiation of bankruptcy proceedings would jeopardize jobs and the employees’ families and leave 35,000 inhabitants and all public institutions and companies without heating
In addition to the EUR 324 million, EUR 79 million is required to pay off TEŠ’s loans, the government stressed. Giving up ownership over TEŠ and the mine will relieve HSE of burden and enable it to compensate the state for the aid
The new bill is a transitional solution until the adoption of measures for a just coal phaseout
the restructuring of the area’s economy and finding alternative sources for heat production
It said it would provide time for the region to resolve key issues regarding the just transition
HSE: Continued aid to TEŠ and the mine would be illegal state aid
The measures are part of the upcoming legislation facilitating a gradual closure of the Velenje coal mine and the restructuring that will enable the development of the Savinja and Šalek region
HSE said in September that the results of an analysis of the operation of the company’s thermal division showed TEŠ and Premogovnik Velenje would become unprofitable due to changes in the market and a drop in electricity prices below their cost of production
The holding pointed out that from January 1
it wouldn’t be able to fund the uninterrupted operation of the two entities
arguing that such state aid would be illegal according to EU law
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the only remaining coal-fired power station in Slovenia
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Šoštanj accounts for about a third of Slovenia's total domestic energy production but has been struggling due to poor production at the nearby Velenje coal mine
Three municipalities in the Šalek valley in Slovenia signed a cooperation agreement with the utility firm in Velenje and with TEŠ
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Savinjsko-šaleška regija – SAŠA) and Zasavje are Slovenia’s coal regions
Along with other local economies dependent on the coal industry in the European Union
they are eligible to receive public funds for their energy transition
The municipalities of Velenje, Šoštanj, and Šmartno ob Paki plan to tap on the EU’s Just Transition Fund together with TEŠ – part of state-owned power producer Holding Slovenske Elektrarne (HSE) – and Komunalno Podjetje Velenje (KPV) for the decarbonization of the district heating system in the Šalek valley
KPV said they would produce project documentation for the gradual transition to renewable energy sources
The deal is also the first step in eliminating CO2 emissions from the coal region
Šaleška valley must phase out coal within ten years
experts from both sides will prepare a joint concept
It includes the installation of heat pumps paired with solar power plants at the location of the TEŠ coal plant and a cogeneration facility that would use different fuels together with a heat pump at the local wastewater treatment plant
The district heating network is planned to be modernized
Heat pumps and photovoltaic facilities are to be installed at the TEŠ site
The Šalek valley must switch to clean energy within ten years
so it is necessary to define investments and measures as soon as possible to restructure the district heating system
KPV said and added that the TEŠ site is excellent
KPV and the municipalities plan to jointly apply for the money from the Just Transition Fund this year
The first phase of the transformation of the district heating system is already underway
It is envisaged to reduce CO2 emissions and coal consumption by 25,269 and 21,150 tons per year
and result in annual heat savings of 76,559 MWh or about 25%
KPV plans to start renewing the distribution network and the installation of the first renewable electricity plant
The district heating system in the Šalek valley supplies more than 35,000 consumers
The agreement was signed by the general manager of TEŠ Branko Debeljak
KPV’s manager Gašper Škarja and the municipality chiefs: Peter Dermol (Velenje)
Boris Goličnik (Šoštanj) and Janko Kopušar (Šmartno ob Paki)
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Slovenia will receive more than €258 million under the Just Transition Fund (JTF) following the adoption of the single Cohesion Policy programme that includes its Territorial Just Transition Plan (TJTP)
This EU support will help deliver a just climate transition in the Slovenian regions of Savinjsko-Saleška (SAŠA) and Zasavje
Energy restructuring in Savinjsko-Šaleška
the coal mining in Velenje and the Šoštanj thermal power plant's coal blocks (TEŠ) will close by 2033
The Just Transition Fund (JTF) will help diversify the local economy by investing in research and development related to innovative industrial processes and production capacity in small and medium-sized businesses (SMEs)
the Fund will redesign the district heating system and support the transition from the use of coal to alternative clean energy sources for heating
for instance from solar energy and heat pumps
JTF will also support the production of energy from renewable sources
degraded coal-related facilities in the region will be repurposed and revitalised with the aim to invest in the expansion of renewable energy production
the JTF will support 2,400 workers active in the coal sector with lifelong career guidance and training
The region of Zasavje used to have a coal mine and power plant and is seeking to develop new sectors that will support the restructuring of its economy
the JTF will support SMEs to develop innovative business models
as well as measures that will help to retain talent in the region and create new job opportunities
The Fund will also invest in decarbonising the region
through the production of various renewable energy sources such as solar energy
the Fund will back the establishment of a ‘Centre for Demonstration and Training in Zero Carbon Technologies' in the region that will focus on the research on climate-neutral technologies for the transition to a modern
Commissioner for Cohesion and Reforms
The Just Transition Fund will make sure Slovenia’s coal regions will be regions of opportunities and innovation
The spirit of the Just Transition Fund is to tackle the challenge of the climate transition together
Executive Vice-President for the European Green Deal
Slovenia is taking important and ambitious steps to clean its energy production and give coal regions a new future
based on renewable energy and clean technologies
The EU Just Transition Fund will help the country make it a reality
The European Commission is on Slovenia’s side to make sure that every citizen can benefit from a green
The JTF ensures that the transition towards a climate-neutral economy happens in a fair way
in particular in the regions that face the most difficult transition
Those territories are identified during negotiations of the 2021-2027 Partnership Agreements and the associated programmes between the Slovenian authorities and the Commission. The Partnership Agreement with Slovenia was approved in September 2022
developed by the national and regional authorities in close consultation with local partners
identify the challenges and development strategy and needs in each territory
They also identify the planned actions with specific governance mechanisms
The JTM provides targeted support to help mobilise around €55 billion over the period 2021-2027 in the most affected regions
Local partners and all stakeholders can also get support and exchange best practices and experiences all across the EU via the Just Transition Platform.
the JTF will support the creation of a ‘Just Transition Centre' in each region
support for project preparation and coordinate just transition activities in the two regions
@TimmermansEU @ElisaFerreiraEC @EUinmyRegion @EUClimateAction
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which means there is enough electricity,” Mitja Tašler
Slovenian lignite-fired thermal power plant Termoelektrarna Šoštanj (TEŠ) has been developing several projects aimed at…
Balkan Green Energy News
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TPP Šoštanj’s business results depend to a large extent on changes in the price emission allowances
which TPP Šoštanj is obliged to buy or pay under the EU’s Emission Trading System (EU ETS) to fund the national Green Climate Fund
TEŠ and Premogovnik Velenje are trying to actively participate in the coordination on a national level of ways and timing in the transition to a carbonless society
The high price of allowances has a significant impact on the operations of TPP Šoštanj because those expenses make a great portion of company’s overall expenses
TPP Šoštanj and coal mine operator Premogovnik Velenje (PV) are trying to actively participate in the coordination on a national level of ways and timing in the transition to a carbon neutral society
We will need to adjust our business accordingly
we will be active in identifying projects that could support us in contributing to so-called gradual transition
One of the projects aimed at enabling a gradual transition to a carbon-free society is
It would replace the operation of Unit 5 at the Šoštanj TPP site by 2030 and completely fulfill the obligatory greenhouse gas emission reductions by 2030
TEŠ is preparing the so-called hydrogen project to fuel local hydrogen-powered city buses
we are exploring the possibilities for CO2 capture and utilization (CCU)
We are also preparing for the implementation of the so-called hydrogen project
We want to fuel local hydrogen-powered city buses
while first and foremost we are looking into alternative fuels such as biomass and SRF
Non-hazardous waste that can’t be recycled and reused is suitable for co-incineration with the primary fuel for the production of heat and power as its calorific value is relatively high
SRF (solid recovered fuel) has such quality and we want to add it to lignite
SRF is defined as a solid fuel manufactured from nonhazardous waste in accordance with the guidelines of the European Committee for Standardization (CEN) Technical Committee TC 343
Around 160,000 tons per year of alternative
SRF fuel (around 6%) can be added to the primary fuel – lignite
SRF has a higher calorific value than lignite
Coal is between nine and 11 megajoules per kilogram and SRF is 14-17 megajoules
Slovenia has been serious about energy transition
but it faces some problems at the very beginning
Slovenia is well advancing in developing new renewable energy capacities
the rise of the share of renewable energy sources in final consumption is rather slow
We are one of few EU countries that won’t reach 2020 targets
and we are also substantially conservative with regard to the 2030 target
We only increased it by two percentage points from the 2020 level – from 25% to 27%
It is expected that the country will be able to draft a national coal exit strategy by the autumn
the state is not at the moment sufficiently encouraging further exploitation of hydropower enough
The National Energy and Climate Plan (NECP) plans to continue with pre investment activities in the exploration of the possibilities to use renewables and it also plans to make changes in the regulations related to renewables location identification
will show a significantly different picture in hydropower sector
Projects in the hydropower sector may substantially contribute to increase of renewable energy share and the transition to a low carbon society
the state is currently not encouraging further exploitation of hydropower enough
The state made the first steps due to the intensive activities of HSE Group
and the activities are now proceeding at an accelerated pace
Last year we managed to get involved in the EU’s Platform for Coal Regions in Transition
A workgroup has been set up at the government level to define a timetable by the end of the year for gradual coal phase out
We expect that the country will succeed in drafting a national coal exit strategy by the autumn with the help of EU funds and an external contractor
TEŠ’s operating plans are in line with the adopted NECP to the greatest extent
as the NECP envisages a 30% reduction in coal consumption by 2030
which is in line with our plan to stop the production in Block 5
It is not yet fully clear until when Slovenia will be allowed to use coal for the production of electricity
TEŠ 6 is expected to be operational until 2054
but the decision will be provided by the national strategy for coal phase out
National coal abandonment strategy will have to provide the Savinjsko-Šaleška region and employees with the necessary clarity on further development and a support framework
TEŠ and PV will actively participate in the strategy preparation process to secure that this document provides a clear development and support plan for the Savinjsko-Šaleška region
economically viable and socially balanced transition that would bring growth
development and job creation while providing an adequate level of security of supply for Slovenia’s energy system
The fact is that EU is adopting ambitious targets including climate neutrality by 2050
EU wants to maintain competitiveness of its economy with these targets and
at the same time to use them to encourage ambitions of other countries
by introducing a carbon tax on electricity imports from those countries
those countries should obtain detailed information about the European Commission’s plans through their participation in the Energy Community and try to adjust to new measures in such a way to provide security of supply and competitiveness of their energy sectors
Countries in the region must become fully aware of the EU plans and try as much as possible to prepare for the future
It would be good that countries from the region set up their own energy transition funds which would be funded through some kind of emissions allowances purchased by companies that emit CO2
The fund would be used to finance and support energy transition of the same companies
This approach would provide a fair transition
We don’t know now how long would the pandemic last
but we have been preparing for it as if it would be lasting for a long time
Already in February we have launched prevention measures that were at our disposal in order to secure power production having in mind that in crisis situation electricity supply is needed more than usually
TEŠ is ready for quarantine as well in case it becomes necessary
In order to minimize the coronavirus risk everyone who can work from home does so.That is around 20% to 30% of employees
The rest must be at the location but we undertook necessary measures to minimize the risk for them also
We are also ready for quarantine in TEŠ in case the most severe measures are to be implemented
The interview presents the good concept for energy transition of coal fired power plants
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The management of the Šoštanj thermal power plant (TEŠ) presented the results of an environmental…
Photo: TPP Šoštanj management during the presentation of the EIA (HSE)
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TEŠ, which is part of state-owned energy company Holding Slovenske Elektrarne (HSE), earlier announced that in the case of a positive EIA it would start burning SRF next year
TEŠ has started the process of obtaining an environmental permit for the joint combustion of lignite and SRF
The EIA takes into account the environmental and human impacts that would occur during the incineration of SRF fuel and at the time of the activity’s termination
All impacts were assessed as insignificant
TEŠ decided to continue with the procedure
so it submitted the EIA to the Slovenian Environment Agency (ARSO)
according to the press release on HSE’s website
This is the beginning of the process of obtaining environmental consent for the co-incineration of lignite and SRF in unit 6 of TEŠ
CO2 emissions would be lowered while all other environmental impacts would be within the permitted limits
The emissions would be in accordance with regulations in Slovenia
but also with the values determined in the EU best available technologies (BAT) reference documents (BREF)
TEŠ intends to burn a maximum of 160,000 tons of SRF per year
Lignite remains the primary raw material for energy production in the thermal power plant
TEŠ intends to burn a maximum of 160,000 tons of SRF per year or a maximum of 6% of the weight of the base fuel
The addition of SRF would improve the efficiency of electricity and heat production
SRF would be purchased only from Slovenian producers
crushing and dehydrating selected solid non-hazardous waste
SRF would be purchased only from Slovenian producers who would ensure the quality of fuel
adding that the company would respond to all calls from the local community to present the results of the EIA
In a recent interview for our portal
Tašler spoke about the projects that TEŠ intends to implement in order to complete a gradual energy transition
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Slovenia will stop using coal for electricity generation by 2033 under the national strategy to phase out coal and restructure coal regions that the government adopted on Thursday
It is one of the last EU countries to do so
The final confirmation of the coal exit year comes after months of extensive consultations with stakeholders and local communities
If the environmental impact assessment (EIA) doesn’t reveal a possible excessive impact on the environment…
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The project will be implemented by Termoelektrarna Šoštanj (TEŠ)
subsidiary of state-owned power utility Holding Slovenske Elektrarne (HSE)
The final investment decision is still pending
The final investment decision is still pending because EIA is not finished
adding the consent of the local community is crucial
The project was presented to Velenje city officials and also on the round table
A presentation of the SRF co-incineration project was held in Velenje
The project was presented to municipal officials and also at a round table
In case the EIA unveils potential excessive impact on the environment and the health of the nearby population, TEŠ will not proceed with the project, said the utility’s director Mitja Tašler, who was appointed in September 2019
Co-incineration will reduce CO2 emissions by 156,000 tonnes below the current levels
If the analysis is in line with all the prescribed limitations
TEŠ expects trial co-incineration to start at the end of 2021
Co-incineration is a step forward in reducing emissions and one of the first steps towards greener energy
adding that the project would reduce CO2 emissions by 156,000 tonnes below the current levels
TEŠ expects a smaller amount of co-incineration byproducts like ash and slag
TPP Šoštanj has two units, 5 and 6. Blocks 1, 2, 3 and 4 have been shut down. The last was unit 4, in 2018
The recently presented draft national energy and climate plan (NECP) also envisages the closure of unit 5
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Slovenian Prime Minister Robert Golob said coal plant TEŠ and its accompanying mine may end operations before the expected closure in 2033
Bulgaria, Slovenia
Igor Todorović
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Slovenia’s state-owned energy company Holding Slovenske elektrarne (HSE) expects significant losses in the operation of the last coal-fired thermal power plant Termoelektrana Šoštanj (TEŠ) and the Premogovnik Velenje mine
An analysis is underway as a basis for decisions on the division and it is expected to be completed in the second half of the year
Prime Minister Robert Golob has confirmed that it includes scenarios for closure or sharp production cuts within the next three years
The country’s strategy envisages the shutdown by 2033. But the division is seen suffering more than EUR 2 billion in operating losses by then, Dnevnik reported earlier, citing projections that it obtained. It could threaten HSE’s existence. The company is also considering the possibility of spinning off TEŠ and the firm operating the mine into a separate entity
HSE is examining a scenario of spinning off the coal plant and mine into a separate company
Golob said he doesn’t believe the coal plant would last until 2032 “not because of politics
HSE told state news agency STA that it is working on solutions for coal miners and other workers and stakeholders
The closure of TEŠ and Premogovnik Velenje wouldn’t be such an issue from an energy point of view as it would financially and socially
The plan to restructure the facility includes the installation of a floating solar power plant, hydrogen production and other new technologies
The ministry added it could be possible to cover the losses from TEŠ’s operations with renewables
Slovenia is eligible for EUR 259 million from the EU’s Just Transition Fund
There is EUR 174 million for the Savinja and Šalek coal region (Savinjsko-šaleška regija – SAŠA)
where there was a coal plant and mining complex
There are 2,000 employees in Premogovnik Velenje
including activities other than coal production
the European Commission recently criticized its draft update of the Integrated National Energy and Climate Plan (INECP or just NECP)
It lacks ambition and details on measures to achieve 2030 goals
State-owned Holding Slovenske elektrarne is preparing for the possibility of spinning off its coal assets: thermal power plant TEŠ and a mine
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The move is in line with Slovenia’s coal phaseout strategy and in view of the fact that electricity production in coal plant Termoelektrarna Šoštanj would be highly unprofitabile
but also given its role in the national electricity system
socio-economic and other analyses will include the lignite production segment
TEŠ is supplied by the Premogovnik Velenje coal mine
The first phase of preparations is scheduled to be completed by mid-year
Other Southeastern European countries with state-owned coal plants and mines
still hold them in power utilities together with hydropower facilities and other assets
coal plants and mines are in the same government-controlled power utilities as hydroelectric plants and other facilities
Such obsolete systems are becoming an ever heavier financial burden
the cost of carbon dioxide emission certificates is almost as high as prices on electricity exchanges
they are facing the EU’s Carbon Border Adjustment Mechanism (CBAM)
essentially a CO2 tax for imports in the EU
it is becoming more difficult for companies with portfolios that are problematic on the climate front to obtain sustainable financing
Slovenia’s decisions will be closely watched in the rest of the region
The idea is for TEŠ and the coal mine to form a company under direct state ownership
They are expected to generate a combined loss of EUR 2 billion within a decade
The news outlet noted that the spike in electricity prices during the energy crisis brought relief to TEŠ
The Šoštanj plant lost EUR 280.4 million in 2020 while in the following two years it was around breaking even. But HSE was still struck a heavy blow from expensive power imports, prompting a government bailout worth EUR 492 million in late 2022
Holding Slovenske elektrarne said it returned another EUR 100 million or EUR 342 million in total
The national strategy from two years ago envisages a coal phaseout by 2033
The government will need to provide more detailed plans and legislation to get a green light from the European Commission to keep TEŠ afloat
Slovenian state-owned HSE plans to cover a part of the Družmirje lake
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HSE said it would install a floating photovoltaic system on the Družmirje lake
It was formed in the late 20th century as land above parts of the Premogovnik Velenje underground coal mine subsided
HSE’s Termoelektrarna Šoštanj (TEŠ) is also next to the lake
The government-controlled company vowed to preserve the Družmirje lake’s ecosystem including birds and to adapt the entire shore for water and waterfront activities
HSE added that the floating solar power plant would have up to 140 MW in capacity
It plans to build it 150 to 200 meters from the western shore and up to 400 meters away in the southwestern section
The floating PV plant will take up no more than half of the lake’s surface
An info point will be established for the local population to learn about the project
HSE Group reduced carbon dioxide emissions by 1.4 million tons or 30% in the last decade and sulfur dioxide and nitrogen oxide emissions by 75%
The Šalek valley is part of the Savinja and Šalek coal region (Savinjsko-šaleška regija – SAŠA)
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They also say PV panels may heat the water too much and leak chemicals
proponents of the technology are pointing out that floaters reduce evaporation
Slovenia’s state power utility Holding Slovenske Elektrarne (HSE) has appointed new top managers at two…
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HSE named Viktor Vračar as director general of the company operating the TEŠ power plant
and Mitja Tašler as the company’s director
who is also a member of the HSE management board
used to sit on the company’s supervisory board and serve as an operating officer in charge of production
He holds a PhD in business management and organization and a bachelor’s degree in electrical engineering
Mavec’s professional career spans more than 20 years
including over 15 years at the helm of various companies
who has served as an interim director of TEŠ since March 1
has a bachelor’s degree in electronics and over ten years of professional experience in the energy sector
including more than five years in leading and managerial positions
Marko Mavec was named director general of Premogovnik Velenje
Mavec was also appointed to a four-year term
Marko Mavec holds a master’s degree in mining and geotechnical engineering
most recently as head of technical services
he has been the director of the ERICo institute for ecological research
In March this year HSE itself got a new director general
while Viktor Vračar was appointed as chief operating officer and Boštjan Markoli as new president of the supervisory board
Power plant and coal mine Velenje are in financial difficulties
which forced their owner HSE to ask for help from the Slovenian government
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Slovenia’s only coal-fired power plant and coal mine, TEŠ and Premogovnik Velenje, are very close to a financial collapse, Slovenia’s news portal necenzurirano.si reported
It had insight into the HSE report sent to the Slovenski Državni Holding (SDH)
which provides 35% of domestic power output
recorded a loss of EUR 280.4 million in 2020
HSE said it informed the owner of the various scenarios for resolving the issue and attributed the loss to “enormous growth” in prices of emission allowances”. At the end of August CO2 price climbed to a record of almost EUR 61 per ton
which has a 35% share in domestic power generation
compared to EUR 9.6 million at Premogovnik Velenje
The thermal power plant’s assets were impaired last year by EUR 243.5 million
which means the sum was written off from the balance sheet on a drop in value
Of note, Slovenia is considering a coal phase-out year, and the government has proposed 2033. According to a recent study, TEŠ could record a total net loss of EUR 870 million by 2030
According to the HSE’s report to SDH
the company has determined that the remaining EUR 650 million should also be impaired
which means the value of TEŠ would be zero
The thermal power plant will then record a EUR 560 million loss for this year
HSE must decide whether to inject TEŠ with fresh capital or write off a large part of its debts to international banks
TEŠ could also delay impairments and gain a maximum of three years
but in 2024 the value of its assets would be lower than its liabilities
and the company will still become insolvent
The power plant will run out of money for salaries and other liabilities in the spring of 2022 at the latest
The situation is even worse in the short term
the coal-fired power plant will run out of money for salaries and other liabilities in the spring of 2022 at the latest
TEŠ’s problems are also making life difficult for coal mine Premogovnik Velenje
because the company is the only buyer of its goods
HSE is lobbying for TEŠ and Premogovnik Velenje to be spun off and placed under direct state ownership
the continued operation of the thermal division is financially unsustainable
HSE is lobbying for TEŠ and Premogovnik Velenje to be spun off into a company under direct state ownership
or to become a part of a capacity mechanism under which EU member states can secure strategic energy reserves
HSE told necenzurirano.si it is considering the possibility to apply for state aid and avoid bankruptcy