Slovenia has plenty of plans. It could do with some decisions

Slovenia is not short of infrastructure plans. It wants another nuclear reactor, more renewable power, a stronger electricity grid and better railways. The port of Koper is expanding, manufacturers are looking for cheaper and more predictable energy, and officials would like to attract more foreign investment. Banks, meanwhile, appear quite willing to finance much of it.

What the country seems rather less good at is building things.

The problem was neatly illustrated in Maribor on September 4th, where energy companies, logistics operators, bankers and government officials gathered to discuss a collection of projects ranging from a 80m-100m euro waste-to-energy plant to the proposed JEK 2 nuclear reactor and a logistics hub serving the port of Koper. Different industries produced much the same complaint: permits take too long, suitable land is scarce and decisions arrive slowly.

That matters particularly in eastern Slovenia. Podravje, the region around Maribor, produced 51,860 euros of gross value added per worker in 2024, compared with a national average of 63,780 euros. By GDP per head it has spent much of the past two decades in the lower half of Slovenia's regions. Its innovation performance is also diverging from the richer west: eastern Slovenia ranked 160th in the EU's latest regional innovation scoreboard, against 80th for the west.

Infrastructure once helped make Maribor an industrial centre. The Drava supplied electricity; railways connected factories to markets. The hope now is that another bout of investment might do something similar. Yet Slovenia's recent record gives grounds for caution.

Andrej Lasič of NLB, the country's largest bank, points out that the last big energy project completed in Slovenia was the Brežice hydroelectric plant, roughly 13 years ago. Slovenian energy companies, he says, have debt of less than one times EBITDA, compared with leverage of three or four times EBITDA among comparable foreign companies. Slovenian banks therefore find themselves financing energy investments abroad even as domestic projects remain stuck at home. The constraint, in other words, does not appear to be a shortage of money.

There are plenty of candidates for it. Maribor's most immediate is a proposed plant for burning non-recyclable waste and using the heat in the city's district-heating network. With capacity of about 50,000 tonnes a year, it could provide more than 60% of Maribor's annual district-heating needs. At 80m-100m euros it would be the biggest investment in the municipality's history. The project is more tangible than many Slovenian infrastructure schemes: a government decree is in place and the concession process is under way.

At the opposite end of the scale sits JEK 2, a proposed second reactor at Slovenia's sole nuclear-power station in Krško. GEN energija, the state-owned company developing it, hopes to reach a final investment decision by 2028 and pour the first nuclear concrete in 2032. Danijel Levičar, an adviser to the company, says support near the existing plant runs at 80-85%, considerably above the national figure. He also argues that Slovenia could finance the project without damaging its sovereign credit rating. For the moment, however, it remains a project of studies, planning procedures and future decisions rather than concrete and steel.

Smaller investments reveal another difficulty: where to put them. Dravske elektrarne Maribor is developing a 10MW solar plant on a closed landfill, precisely because large solar and wind projects require land and encounter resistance when they compete with farming or other uses. Alpacem Cement is taking a similar approach, constructing a solar plant on a disused part of a quarry; the electricity will be consumed directly by its cement works and should eventually provide about 15% of their needs.

The same problem of infrastructure moving more slowly than commerce appears in logistics. Transport and warehousing already account for 5-6% of Slovenia's gross value added, more than the EU average. Cargo volumes are growing much faster. The port of Koper handled 86,679 containers in 2000; last year it handled 1.27m. Its operating margin was 25.2%, suggesting that a good deal of the value in logistics accrues to the places where terminals and associated services cluster.

Maribor would like some of that business.

The idea is not to replace Koper but to extend it inland. The port already uses facilities beyond Slovenia, including Cargo Center Graz in Austria. Maribor sits close to road and rail corridors and has land that is cheaper and more readily available than on the coast. As Koper grows, storing, sorting and processing more freight inland should become increasingly attractive.

There is a certain irony here. Slovenia's geography is among its most obvious economic advantages. It sits between the Adriatic and central Europe and possesses the northern Adriatic's largest container port. Yet exploiting that geography requires infrastructure whose planning horizon can be geological. The second railway track connecting Koper more effectively with the hinterland, now nearing completion, appeared in a national railway-development programme as far back as 1996.

Competitors need not wait. Logistics firms are watching the expansion of hubs such as Villach in neighbouring Austria. Multinational customers increasingly want one company to manage an entire supply chain rather than merely its least profitable final leg. If Slovenia cannot provide the terminals, warehouses and connections they require, freight can be routed elsewhere. Once logistics networks settle around rival hubs they can be difficult to win back.

Foreign investors face much the same calculation. Slovenia can offer skilled workers, an industrial tradition, reasonably sophisticated technology and access to the European market. But a factory requires somewhere to stand. Tamara Zajec Balažič, the head of SPIRIT Slovenia, the country's investment-promotion agency, argues that Slovenia has too few sites where an investor can know in advance what can be built, which permits will be required and how long they will take. For greenfield investment, countries that can provide such certainty enjoy an obvious advantage.

None of this is a uniquely Slovenian ailment. Planning large infrastructure is difficult throughout Europe. Energy projects affect landscapes; railway lines displace people; industrial development competes for land. Proper scrutiny is not bureaucratic waste.

But there is a difference between scrutiny and paralysis. Slovenia's problem is becoming less about deciding what infrastructure it wants than about developing institutions capable of delivering it. Energy companies have projects. Banks have capital. Koper has freight. Maribor has land and a reason to reinvent itself.

What remains in shortest supply is time.