Croatia is eyeing geothermal energy as a major source of sustainable power and has just closed an auction for six productive exploration sites to interested bidders, a top energy official said on Tuesday.

"Overall potential of geothermal energy in Croatia is enormous, it certainly exceeds 1 gigawatt (GW)," Marijan Krpan, the head of the Croatian Hydrocarbon Agency's (CHA) managing board, said in an interview.

CHA, which conducts activities related to the exploration and exploitation of geothermal waters for energy purposes, has identified around 200 wells originally drilled for oil and gas exploration, as well as 75 areas suitable for district heating or power generation development.

"Based on an extensive database that the Agency has developed, we know that the Pannonian area has perfect conditions for development of geothermal business, with geothermal gradient 60% higher than the European average," Krpan said.

On June 1, CHA closed the auction of six geothermal blocks based in the Drava River basin in the northeast of the country and will evaluate 16 bids from 11 local and foreign companies over the next two months, Krpan said.

"This is a total investment of 400 million euros ($428 million), 40% of which will go for drilling and the rest for building electric plants in the next couple of years," he said.

Krpan added that plants should produce around 600,000 megawatt hours (MWh) of electric energy annually, or enough to supply power to about 100,000 households.

The European Bank for Reconstruction and Development (EBRD)said it would be interested in exploring financing geothermal projects in Croatia once there are bankable projects in the sector.

"Croatia has significant geothermal potential ... Also the geological risks are significantly decreased due to the fact that there are existing seismic data for large areas in the continental part of the country," Victoria Zinchuk, the EBRD Director for Central Europe, told Reuters.

EU member Croatia, which imports up to 40% of its energy needs, aims to produce 60% of electricity from renewable sources by 2030.

Besides generating electric power, geothermal blocks can be used for heating and in agriculture, Krpan said. CHA has identified six exploration geothermal blocks in the vicinity of as many towns and will start drilling next year to connect district heating on two geothermal wells.

($1 = 0.9337 euros) (Reporting by Daria Sito-Sucic Editing by Mark Potter)