SPIRIT chief resigns amid funding scandal

The investment promotion agency SPIRIT has annulled a €83 million call for projects to restructure Slovenia's two coal regions following a controversy over some of the companies that won funds, CE Report quotes The Slovenia Times.

SPIRIT published the open call to stimulate coal phaseout and restructuring in the Zasavje and Savinja-Šalek regions with funds from the Just Transition Fund in May 2024.

The results were announced in mid-January, with 15 projects in the Savinja-Šalek region being allocated a total of €52.5 million, and nine projects in Zasavje winning a total of €30.46 million.

Media soon reported that two companies incorporated by the same businessman who had only five employees and negligent revenue were allocated over €20 million.

The companies VonPharma SI and Vital QI had both been founded by businessman Tadej Von Horvath, a former member of the youth wing of the Social Democrats (SD), the party led by Economy Minister Matjaž Han.

The media reported that Von Horvath had transferred ownership of one of the companies before the call to meet the eligibility criteria.

Following the reports, which also raised issue with some other companies with links to the SD party, Minister Han ordered an internal review, while SPIRIT revoked the decisions to award the funds to VonPharma SI and Vital QI.

SPIRIT director Rok Capl stepped down and was replaced as acting director by Tamara Zajec Balažič, so far his deputy, by the government in mid-February.

With negative media coverage continuing, Minister Han called on the agency to annul the call. SPIRIT obliged, announcing its decision on 28 February.

The funds from the Just Transition Fund intended to facilitate investment and create new jobs in the coal regions will be available as part of a new open call, which is expected to be ready within three months.

Some of the companies not involved in the controversy were unhappy with the annulment of the call, also because they spent time and money preparing their applications.

Eti Elektroelement, a Zasavje-based manufacturer of fuses, switches and circuit breakers, had been allocated €9.4 million to expand production in new facilities.

The company, which at the group level employs 1,088 people in Slovenia and generated €193 million in sales revenue in 2024, applied to the call with six projects totalling €28.5 million in eligible costs, which they said entailed a huge amount of work. They scored 99 out of 100 available points in the call.