The contract setting the framework for the implementation of the TEŠ6 project and a contract defining the security for the state guarantee were signed by Finance Minister Janez Šušteršič, Minister of Infrastructure and Spatial Planning Zvonko Černač and TEŠ director Simon Tot.

By signing the contracts, TEŠ committed that the final price tag on the project will be below the EUR 1.3bn set in the amended investment plan and that the project will be completed in line with the schedule by 15 February 2016 at the latest, when an operating permit needs to be obtained.

TEŠ also committed to keep carbon emissions and the maximum price of coal supplies within the levels set in the amended investment plan and to ensure the projects' minimum profitability.

The sanctions in case of contract violation include the provision that the TEŠ management will resign without the right to compensation for loss of office.

As collateral for the state guarantee for a EUR 440m loan from the European Investment Bank (EIB) TEŠ will present to the state five signed blank cheques, along with a warranty.

TEŠ shall pay to the guarantor in exchange for the guarantee a premium comparable to those in financial markets.

In a statement for the STA, TEŠ director Simon Tot described the signing of the contracts as a good signal. He said that TEŠ was currently in talks with the main supplier Alstom and banks, but would not specify.

The guarantee contract will now be discussed by the government, to be followed by procedure at the EIB and ratification at the National Assembly.

The National Assembly passed the loan guarantee act for TEŠ6 in July, setting forth that the state will stand surety for a EUR 440m loan from the EIB under certain conditions to be met by TEŠ, including that the overall price of the project will not exceed EUR 1.3bn.

Since the guarantee has not been issued yet, TEŠ has had problems financing the project so the main supplier Alstom announced in November it was scaling down work on the project. By now the number of workers on the site has been reduced by more than half. The slowdown is causing extra costs which TEŠ estimates at EUR 30m.

So far, about 70% of the work has been done on the project. TEŠ has been billed for EUR 843m, paying EUR 684m, most to Alstom. TEŠ owes about EUR 154m in outstanding payments to Alstom and EUR 5.6m to domestic contractors.