The Croatian investment group Energia Naturalis (ENNA Group) has announced that its subsidiary, Geo Power Zagocha, has commenced drilling operations for a significant geothermal energy project near Slatina in eastern Croatia, with an estimated investment of over 140 million euros. The project includes the construction of a power plant with a planned installed capacity of 20 MW, which is expected to become the largest Organic Rankine Cycle (ORC) plant in the European Union. ORC technology enables clean electricity generation through a closed-cycle process, using hot water from beneath the plant. The water, after electricity generation, can be repurposed for local uses such as heating greenhouses and homes.
The drilling, which began earlier this week, is being conducted by Crosco, a local drilling services contractor, and is expected to reach depths of up to 5,000 meters. On August 20, Geo Power Zagocha signed a 25-year geothermal energy exploitation agreement with the Croatian Ministry of Economy for the Slatina 2 field, with an option for extension. This agreement has paved the way for the start of drilling operations.
ENNA Group has been working on this project since 2022, and the thermal power plant is expected to be operational by 2028 at the earliest. The investment in geothermal energy is notably higher than in other renewable energy sources such as wind or solar. The cost of constructing a geothermal plant exceeds 6 million euros per 1 MW of connected capacity, in contrast to 600,000 euros for solar and 1.3 million euros for wind. Due to the high initial costs and risks, geothermal projects are typically undertaken by large companies, with only a few operating in Croatia.
The prospecting phase for geothermal projects can last up to five years and is very costly, with each drill requiring around 15 million euros. Typically, four or more drills are needed in one field due to the uncertainty of water availability. As a result, geothermal plant projects rarely secure bank financing during the prospecting phase. Investors usually finance this phase independently, with banks more likely to provide loans only after exploitation and power purchase agreements are in place.
Currently, about 10 geothermal projects are in development across Croatia, and five new permits for geothermal water exploration were issued last year.
