Owner of Velika Ciglena geothermal power plant, Croatia placed under bankruptcy proceedings
After years of legal dispute over ownership, the company operating the Velika Ciglena geothermal power plant in Croatia has been placed under bankruptcy.
The Commercial Court in Zagreb, Croatia has opened bankruptcy proceedings against Geo Power Energy Development doo, the owner and operator of the 16.5-MW Velika Ciglena geothermal power plant. With this, account of owner Dragan Jurilj with an amount of EUR 19.7 million has been blocked and subjected to legal supervision.
An auspicious start for geothermal in Croatia
The Velika Ciglena geothermal power plant was inaugurated in 2019, then under Geoeon doo, a partnership between Turkish company MB Holding (80%) and Dragan Jurilj (20%). The company Geo Power Energy Development was eventually created as a result of reorganization of Geoeon. At the time, the plant had a 10-MW power purchase contract with Croatian Energy Market Operator (Hrvatski operator tržišta energije d.o.o. / HROTE), accounting for the electricity consumption of about 29,000 Croatian households.
With several government officials, including an ambassador from Türkiye, in attendance, the inauguration of the Velika Ciglena power plant was perceived as a strong driver for further geothermal development in Croatia. MB Holding even expressed an intention to invest in more geothermal projects in the country, specifically eyeing the Legrad site.
The output of Velika Ciglena did not quite reach its full potential, with the power plant “temporarily” halting operations in 2022. It has not resumed operations since then.
Conflict with Turkish stakeholders
Several legal disputes have happened between MB Holding and Jurilj since Velika Ciglena started operating. The allegations have gone both ways. The Turkish partners has filed criminal charges against Jurilj, stating that they have effectively been kicked out of the partnership through the use of falsified documents. Moreover, MB Holding alleges that Jurilj as siphoned off tens of millions of Euros from the company Geoeon.
For his part, Jurilj also filed several criminal charges against MB Holding, stating that the company also falsified documents, specifically the minutes of an official company assembly. There are also allegations of unjustified payments from the funds of Geoeon that were paid by HROTE, as well as making fraudulent transactions.
The conflict between the two parties have been elevated to arbitration, with Prime Minister Andrej Plenkovic and Turkish President Erdogan said to have discussed it during an international summit. In 2021, the legal dispute was brought to the European Court of Human Rights
Suspension of state subsidies
Due to the ongoing legal dispute concerning the Velika Ciglena power plant, HROTE suspended the payout of state subsidies to the company. The project was due to receive more than EUR 130 million of state incentives until 2031. HROTE made a proposal to the court to establish a court deposit for the remaining state incentives, but the proposal was denied. The decision was made in February 2022, thus resulting in the halting of operations of Velika Ciglena.
Moreover, Jurilj has accused HROTE of paying an amount of HRK 25 million into a foreign account. Without access to payments from HROTE, Jurilk expressed the difficulty of making tax payments related to the project.
What’s next for Velika Ciglena?
The proposal to open bankruptcy proceedings was made by HROTE on September 2025. Jurilj opposed the decision, stating that the company will lose its status as a privileged electricity producer if it goes into bankruptcy. This means that the electricity offtake contract with HROTE will be automatically lost.
Jurilj argues that this is not a standard bankruptcy case since his company delivered electricity to HROTE, but payment were made into a court deposit rather than the company’s account. However, HROTE retorts that the final decision states that the debtor is not entitled to compensation, but instead has more obligations to the agency.
The bankruptcy proceedings will likely continue to develop over the coming months, but the case of Velika Ciglena is an unfortunate entry in the promising story of growing geothermal momentum in Croatia.
Source: Jutarnji (1 and 2), Klikni, Index.hr, Serbia Energy, and Total Croatia