The gas war between Russia and Ukraine may leave thousands Bulgarian households without central heating. The central heating companies in Bulgaria will be the worst affected by the expected lower supplies of natural gas. An economic regime is provided in the Bulgarian Energy Law, if its introduction is necessary. It is the last possible stop-gap expedient in case of an energy crisis. "The Sofia Central Heating Company has 375,000 subscribers and uses three hundred million cubic meters of gas a year," said Ilko Yotsev, Chairman of the Directors' Board of the Sofia Central Heating Company. The districts of the capital city will be left without central heating, if the pressure in Bulgaria's gas transmission network goes down by fifty percent. "We have an emergency operative plan in case of an energy crisis," said Mirko Ugrinov, CEO of the Plovdiv Central Heating Company. He explained that the company may switch to black oil if the supplies of natural gas are reduced, but this is only a temporary stop-gap measure, because black oil causes extensive air pollution and is far more expensive than natural gas. "We expect no problems with the supply of natural gas in the weekend," said Kiril Gegov, CEO of Bulgargaz. He said that all customers of Bulgargaz were receiving the quantity of natural gas they had required. "There is no drop in the transit of natural gas through Bulgaria to Turkey, Greece and Macedonia," Gegov added. Bulgaria's national gas transmission system operator supplies its customers with about three billion cubic meters of natural gas per year and transmits fourteen billion cubic meters of natural gas to Bulgaria's neighbors.
Source: Standart (03.01.2006)

Heat Supply-Sofia JSC has collected BGN 5 mln from its debtors through lawsuits since 1999. However this is only 9 percent of the total debts that the company has to collect. At the moment incorrect subscribers owe the heat supply utility over BGN 45 mln.
Source: Standart (07.02.2006)

Yesterday the Mayor of Sofia Mr. Boiko Borisov and the Minister of Economy and Energy signed a mutual order for inspection of Heat Supply-Sofia JSC. The inspection concerns the financial status of the company and whether the asking for price increasing of thermal energy by 12,9 per cent is justified. Mr. Borisov is categorically said that Heat Supply-Sofia could not want price increasing during the coldest days. The town council holds 51 per cent, and 49 per cent are state-owned. On February 8 from Heat Supply-Sofia said that it wants from State Commission for Energy and Water Regulation (SCEWR) 12,9 per cent increase of the heating prices in order to be compensated for the price increasing of the natural gas. This could be done only if the price of the natural gas increases, said the president of SCEWR Mr. Konstantin Shushulov.
Source: Monitor (09.02.2006)

Vladimir Kissyov, chairman of Sofia's municipal council, will lodge a proposal by February 15, 2006 for the municipality of Sofia to sell its stakes in nine of the 12 joint ventures it participates in. The municipality of Sofia will sell its minority stake in Municipal Bank and the 9% stake in the Municipal Insurance Company, according to Kissyov. There is interest in Municipal Bank and Municipal Insurance Company from potential buyers, Kissyov added, but refused to elaborate on names. Bulgarian businessman Hristo Kovachki acquired a stake in the Municipal Insurance Company after he had bought a 27% stake in Municipal Bank. Hristo Kovachki is most likely to acquire additional shares in the Municipal Bank and the Municipal Insurance Company.
Source: Pari (10.02.2006)

The Prosecution refused to generate criminal procedure against Heat Supply-Sofia and ceased the file it had started, said the executive officer of the company Mr. Valentin Dimitrov. The motif of the Sofia District Prosecution was that data for the committed crimes were missing. This inspection started last year after a signal to the chief public prosecutor for deceit and document crimes, presented by the Federation of Consumers in Bulgaria. The people of Mr. Pavel Karlev claimed that there were mass deceptions with increasing the value of the energy for distribution to the general calorimeters. According to the Mr. Dimitrov the information that the company has delivered raw materials for BGN 30-40 mln, without preserving the Public Procurement Act, is not true.
Source: Sega (06.03.2006)

Half of Bulgaria may have no hot water in the summer. Bulgargaz threatened to stop deliveries for heat supply companies if they do not repay their debts until April. The total debts of all consumers to Bulgargaz are BGN 250 mln. BGN 120 mln are for the heat supply companies. The biggest debtor is Heat Supply-Sofia with over BGN 80 mln, followed by Plovdiv, Pleven, Shoumen, Varna and Bourgas.
Source: Standart (23.03.2006)

Cez wants Heat Supply-Sofia, reported the mayor Mr. Boiko Borisov after his return from Prague. Mr. Borisov met representatives of the company that showed interest in Heat Supply-Sofia. Sofia Municipality owns 52 per cent of the company. Heat Supply-Sofia JSC is not managed well and carries losses, trying to compensate them with increase of the bills. The Czech company owns Electricity Distribution Company Stolichno, Electricity Distribution Company Sofia Region and Electricity Distribution Company Pleven. It is expected also to acquire Thermal Power Plant Varna.
Source: Standart (23.03.2006)

State-run gas distributor Bulgargaz has urged the local heating utilities to pay 90% of their debts by April or face an array of enforcement measures that could include insolvency proceedings, said the head of the company's economic department Dimiter Gogov. The utilities owe Bulgargaz 125 mln levs. The biggest debtors are the heating utility of Sofia with outstanding liabilities of 93 mln levs and the utility of Plovdiv which has accumulated 13 mln levs in unpaid bills. The gas company is confident that the utilities will respond to its call as a large part of their subscribers pay their heating bills after the end of the winter. During this winter the heating utilities have collected from subscribers some 83-84% of their dues versus 65% a year ago, said Gogov. For the time being, the energy ministry is not contemplating an option to settle the Sofia heating utility's debts to Bulgargaz in exchange for more equity. Bulgargaz has threatened to cut down natgas supplies to its debtors if they fail to solve the issue by the summer. The gas company said it may take the matter to court and seek an injunction on its debtors' accounts or the launch of bankruptcy proceedings. In 2005, the heating utilities consumed some 1.04 bln cu m of gas out of a total consumption of 3.2 bln cu m in this country. Seven heating utilities have asked for a revision of the central heating tariff as of this summer citing a 26.6% hike in natgas prices over the past four months. Their request is yet to be reviewed, said Konstantin Shushulov, chairman of the State Energy and Water Regulatory Commission.
Source: Dnevnik (23.03.2006)

The receivables of Bulgargas from customers stand at BGN 250 million. The debts of heating utilities account for BGN 120 million of the sum. Toplofikatsia Sofia owes BGN 80 million alone. If the heating utilities fail to settle the bulk of their debts for the current heating season with Bulgargas by the end of April, the company will terminate gas supplies to the debtors, Dimitar Gogov of Bulgargas said. Bulgaria's State Commission for Energy and Water Regulation (SCEWR) and Bulgargas discussed at an open meeting yesterday an increase of the natural gas price, proposed by the gas distributor. Bulgargas suggests a 2.11% increase to BGN 302.95 per 1,000 cu. m (VAT excluded) as of the second quarter of 2006. Bulgargas suggested at the end of 2005 that the natural gas price be increased with over 20% but the the SCEWR lowered the demanded increase by almost 3%. This time, the proposed price hike by Bulgargas is grounded on the increase of the international prices of black oil and gas oil, which play a major role in the formation of the natural gas price. The US dollar has depreciated by 1.5% against the Bulgarian lev over the last 30 days. This enables Bulgargas to ask for a minimal increase of the natural gas price as the gas quantities Bulgaria receives instead of the transit fees for the transportation of the gas to Turkey, Greece and Macedonia allow regulation of the domestic gas prices. The transmission fee is calculated in the new price proposed by Bulgargas, SCEWR chairman Konstantin Shushulov said. The SCEWR will take a final decision on the change of the natural gas price at a closed sitting, scheduled for March 27.
Source: Pari (23.03.2006)

The Sofia district heating company is slipping dangerously close to insolvency under the weight of over 150 mln levs in debts towards gas supplier Bulgargaz. At the same time, the utility is struggling to collect over 200 mln levs it is owed by non-paying customers. Bulgargaz has already urged the domestic heating utilities to settle their outstanding gas bills by April or face supply cuts. The energy ministry is reportedly discussing options to keep the Sofia heating utility afloat. They range from insolvency proceedings to privatisation but the ultimate decision can be taken by the Sofia municipality which owns 59% of the company. The other 41% are held by the Bulgarian state. Sources from the energy ministry said Russian gas monopoly Gazprom, France's Dalkia and utility companies CEZ of the Czech Republic and EVN of Austria are among the parties interested in buying the Sofia heating company. When Gazprom requested a revision of the gas transit supply tariff in late 2005, the Bulgarian side tied the issue to the Russian company's likely participation in the denationalisation of heating utilities and the construction of the Belene nuclear power plant. Sofia mayor Boiko Borisov said he will propose to the municipal council to replace the current Sofia heating utility executive director Valentin Dimitrov with his deputy Georgi Rogachev. Borisov said he will also propose to energy minister Rumen Ovcharov to draft a recovery plan for the indebted utility. The Sofia district heating utility, the nation's biggest, services 386,000 households. The company is the biggest client of gas supplier Bulgargaz with annual consumption of 1 bln cu m. Bulgargaz said it has considered requesting insolvency proceedings but had ruled out the measure as last-ditch. After Bulgaria turned the tap on government handouts to the heating utilities for good in early 2005, production costs have outstripped heating prices. The World Bank and EBRD have recommended to the government to engage the private sector in the financial rehabilitation of the Sofia utility or opt for the privatisation of the company. The Sofia heating company is implementing an upgrade of the transmission network on 114 mln euro loaned by 2 banks and the Kozloduy International Decommissioning Support Fund. The loans are state-guaranteed and provided on the condition that an international manager is picked to run the company. However, the municipal council has been unable to select a manager for the struggling heating company in past 3 years.
Source: Dnevnik (28.03.2006)

There are no drastic violations and bad managing in Heat Supply-Sofia, yesterday reported Mr. Konstantin Shushulov, Director of State Commission for Energy and Water Regulation. He based his arguments on inspection of The Ministry of Economy in the company. According to him the problem is that families and budget organizations has not paid their heating bills. These non-collected takings are about BGN 160 mln. The Ministry of Mr. Rumen Ovcharov reported that the debts of Heat Supply-Sofia to Bulgargaz are BGN 158,4 mln until March 12.
Source: 24 chasa (29.03.2006)

Mr. Georgi Takev to be the new director of Water Supply and Sewerage – Sofia (WSS), yesterday suggested the mayor Mr. Boiko Borisov. For director of Heat Supply-Sofia the mayor nominates Mr. Gerogi Rogachev, deputy director of the company. In Monday Mr. Borisov asked the dismissal of both of them. Mr. Boris Stoickov should leave WSS because he has been investigated by NSCOC for financial deceits and Mr. Valentin Dimitriv for muddy increase of the heating bills. It is still not clear whether WSS could be privatized, because it is shareholder in Sofiyska Voda with 22 per cent share.
Source: Standart (29.03.2006)

Heat Supply-Sofia should change its politics and introduce stimulation for its correct subscribers, as well as to give opportunity for payment on installment plant. This recommend experts after the inspection of the Ministry of Energy in the company, ordered by Minister Mr. Rumen Ovcharov and the Mayor Mr. Boiko Borisov. The private heat supplies in Vratsa and Rousse has already launched such stimulation. According to the experts the company should introduce information system for its debtors and system for payments control. The inspection has also found out that the debts of the home subscribers in 2005 have increased by 15,8 per cent from 2004 and amount to BGN 129,1 mln. The debt to Bulgargaz from 2003 until now is about BGN 100 mln, as at the middle of March it increased by BGN 158,4 mln.
Source: Dnevnik (03.04.2006)

List of the bad debtors of Sofia Heating Utility exists and it is fully accessible in the Internet. The factories 8 Mart, Rulon Iskar and CLZM – the combine for lead and zinc metals have occupied the top places in the classification. The web site izmama.com has placed in decreasing row the 50 companies with biggest unpaid bills that have been sentenced by the supplier. The data is as to March 23. Sofia Heating Utility confirmed the correctness of the information. Only Number 1 debtor – the bankrupted textile factory 8 Mart owes BGN 2.2 mln for heating and hot water. The debt of Rulon Iskar exceeds BGN 1.1 mln. Except for factories, that are bankrupted, the lists contains also many factories that Sofia Municipality is partner in. The organization of Mr. Zahari Zahariev, that became famous with “Petrolgate”, has not paid bills for heating since 2001. The famous businessman Hristo Kovachki is also among the list of the debtors. He is in the management of RUM DENITSA JSC that is sentenced to pay Sofia Heating Utility BGN 24,904 for 2002 plus the interests.
Source: Sega (04.04.2006)

The Sofia municipality has decided to finalise a deal with Austrian company VA TECH HYDRO GmbH&Co and local firm New Energy Vision for the construction of 50MW co-generation facilities on the site of the Sofia-based Lyulin and Zemlyane thermal power plants (TPP). The Austrian company has already been contracted by the state on another project, for the construction of the 220 mln euro Tsankov Kamak hydro complex which is due for delivery in 2009. The project employs a carbon credit scheme agreed with Austria. VA TECH HYDRO GmbH&Co has proposed to supply and assemble the necessary equipment with the Sofia district heating company providing the needed investment resource. Municipal councillors said the project could be hamstrung by the poor financial state of the Sofia heating utility. New Energy Vision has been tapped to build a co-generation facility on the site of the Zemlyane TPP. The company is ready to finance the project on its own. The 2 companies will have to submit the project blueprints by June. The electricity output of the co-generation facilities will be sold to the National Electricity Transmission Company. The Sofia municipality also decided to continue seeking investors for other co-generation facilities. No interest has been registered so far towards the Iztok and Sofia TPPs due to the significant investment that such project would require.
Source: Dnevnik (17.04.2006)

The heating bills in Sofia at installment plan. Until May 15 the clients may put in part of their debts and to sign agreement for installment payment, announced Heat Supply-Sofia. That is necessary in order to collect money for the urgent summer repairs, said the executive officer of the company Mr. Georgi Rogachev. 35 per cent of the March bills are up to BGN 50. 38 per cent of the subscribers will pay no more than BGN 100. 0,4 per cent of the clients will pay more than BGN 300. The non-collected money amounts to BGN 129 mln.
Source: Standart (21.04.2006)

Austrian company VA TECH Hydro GmbH&Co is in talks with Bulgarian national electricity grid operator NETC to construct the Yadenitsa dam, on the river of the same name which separate the Rhodope and the Rila mountains in Southern Bulgaria, using a carbon credit scheme under the Kyoto protocol, said NETC executive director Lyubomir Velkov. NETC has already provided the technical parameters of the dam project and is awaiting a proposal from the Austrian company. The Yadenitsa project is intended to expand by 13 mln cu m the capacity of the lower compensating basin of Pumped Storage Hydro-Power Plant complex Chaira by building a tunnel linking the dam with the Chaira facility. The facility will cost around 100 mln euro and has already absorbed investment worth 14 mln levs. Austria and Bulgaria have signed a memorandum of understanding and bilateral co-operation to conduct mutual actions on the Kyoto Protocol which does not require public procurement procedures for the selection of contractors and financing options, said Velkov. Yadenitsa is the fourth major power project commissioned to VA TECH Hydro on a non-competitive basis. The Austrian company will also build the Tsankov Kamak hydro complex a co-generation facility in Sofia and will rehabilitate the Lower Arda hydro cascade. Under the employed scheme, Bulgaria will sell to Austria the greenhouse gas emission reductions in exchange for the supply of equipment by VA TECH Hydro financed by a group of Austrian banks.
Source: Dnevnik (27.04.2006)

Sofia Municipality allowed the local Heat Supply utility to ask higher heating prices. The company asked for an increase by 8 percent because of the price hike of natural gas. However the company has to negotiate it with the State Commission for Energy and Water Regulation. The DSB suggested instead Heat Supply wanting price increase of the heating, Bulgargaz to decrease its income and to offer cheaper fuel to the company.
Source: Standart (12.05.2006)

The Sofia municipality, a majority owner of the city's district heating company Toplofikatsia, has banned the disposition of company property for the duration of the ongoing financial audit. The measure will have to be approved by the energy ministry, which owns 42% of the company. The audit of the heating utility, which began on May 16, was prompted by customer complaints. On the very first day of the audit, the officials discovered that former executive director of the utility had built a secret office with luxury furniture, a massage chair and a tanning saloon, among other amenities.
Source: Dnevnik (19.05.2006)

Heating tariffs will increase by 7-8% from July due to the hike in natural gas prices while electricity tariffs will be adjusted upwards from October, State Energy and Water Regulatory Commission chief Konstantin Shushulov said on Monday, May 22. The district heating companies have already submitted their tariff hike proposals for consideration by the energy regulator. Domestic gas prices added 10% in 2006, making life difficult for the 70% of the nation's heating companies that use this type of fuel. The Sofia district heating company, Bulgaria's biggest in terms of subscribers, said back in February it would seek a 10% price increase. Last week, the municipal council, which controls a majority stake in the utility company, approved an upward adjustment of 8.75% to 60.16 levs/mWh with taxes.
Source: Dnevnik (23.05.2006)

The shareholders of Heat Supply-Sofia will vote changes in the company’s management at the general meeting appointed for June 23, the minister of economy and energy Mr. Rumen Ovcharov announced. The ministry is still considering on who will manage Heat Supply replacing the current head of the Board of Directors Mr. Ilko Yotsev. The member of the Board of Directors and former manager of the state-municipal company Mr. Valentin Dimitrov already hinted at he was ready to resign even before the deadline of his contract – July 9.
Source: Monitor (06.06.2006)

The Ministry of Economy and Energy and the Sofia Municipal Council both agreed with the privatization of 100% of the capital of Heat Supply-Sofia JSC. This announced for journalists the Minister of Economy and Energy Mr. Rumen Ovtcharov and the Chairman of Sofia Municipal Council Mr. Vladimir Kisiov. The debts of the heat supply company to Bulgargaz will be assumed by the new owner. On 23 June a General Meeting will be held for taking decisions for discharging the Managing Board of Heat Supply-Sofia and electing a new one.
Source: Dnevnik (08.06.2006)

Toplofikatsia, the heavily indebted central heating company, looks as a morsel to energy giants. Five companies compete for Sofia central heating company, Standart learnt. The leading energy providers sent letters of intent to the Bulgarian Ministry of Economy and Energy. These are: Gazprombank, Dalkia, EVN, CEZ and Prisma Electric (USA.) Two of the candidate buyers - Gazprom and CEZ - have confirmed before Standart their interest in the deal. Prisma Electric, for instance, say they are prepared to buy central heating ventures across Bulgaria. According to Rumen Ovcharov, Minister of Energy and Economy, the debts of Toplofikatsia run at 111 million levs (over 50 million euro.) In the opinion of experts, it would be more profitable to sell Toplofikatsia as a whole business instead of offering it as separate companies, which would bring down the price by at least 50 million levs.
Source: Standart (09.06.2006)

The district heating companies based in Sofia, Plovdiv and Burgas have reached an agreement with state-owned gas supplier to reschedule the payment of their outstanding gas bills. Bulgargaz gave the heating utilities notice to either agree to a rescheduling plan or settle their outstanding payments by June 16 or face supply stoppages. Sofia's district heating company has rescheduled until September the payment of BGN 70 mln. The company owed Bulgargaz a total of BGN 111.3 mln by the end of March. The heating utility in Plovdiv has rescheduled the payment of BGN 12.4 mln while the agreement with the Varna utility covers a debt of 2.2 mln levs. The privately-owned utilities in Burgas, Pleven and Vratsa said they expected to hammer out an agreement with Bulgargaz by the end of next week. The Burgas heating utility has so far refused to comply with the demands of the gas supplier to sign an agreement rescheduling the payment of its entire debt of BGN 7.4 mln. The clients of the district heating company based in Shumen have been left with no hot water after the utility refused to reschedule the payment of BGN 5.8 mln in gas bills to Bulgargaz. The unpaid gas bills of the heating utilities ballooned by BGN 46.9 mln to 150.3 mln levs in November 2005-April 2006.
Source: Dnevnik (19.06.2006)

Òhe heating utilities in Sofia, Plovdiv, Pleven, Varna, Bourgas and Vratsa have reached agreement with Bulgargas and the Bulgarian gas transmission company will not suspend supplies to the six cities. The agreement envisages a mechanism for repayment of the debts incurred by the utilities during the past heating season. According to Bulgargas's press release, the heating company in Shumen has itself terminated the use of natural gas and the supply of hot water to its subscribers. Meanwhile Sofia mayor Boyko Borissov said that the final report on the check-up at Sofia's Toplofikatsia was ready. According to him, the breaches at the heating company under the management of ex head Valentin Dimitrov amounted to BGN 12 million.
Source: Pari (20.06.2006)

TThe privatisation procedure for Sofia's heating utility Heat Supply - Sofia has to be completed by the end of 2007. The Sofia city council authorised yesterday mayor Boyko Borissov to sign a memorandum with the economy and energy ministry, under which the quality of the services offered by Toplofikatsia will be improved and steps towards the privatisation of the heating utility will be made. The privatisation of Heat Supply Sofia is prompted by the fact the company has BGN 112 million liabilities towards Bulgargas and repays various bank loans, Vladimir Kissyov chairman of Sofia's city council said. The privatisation procedure has to be implemented in co-operation with the World Bank and the European Bank for Reconstruction and Development, which are the main creditors of the heating utility.
Source: Pari (23.06.2006)

The “Toplofikacia” - Sofia scandal, underwent a sudden and unexpected development yesterday. The Minister of Interior Rumen Petkov accused Sofia’s mayor Boyko Borisov of being personally responsible for the covering-up of the investigation against the Director-general of “Toplofikacia” - Sofia - Valentin Dimitrov. Furious, Borisov denied and promised to discuss and “unravel the whole affair” with the President and the Attorney General of Bulgaria. The first signals, backed by sufficient facts, against the Director-general of “Toplofikacia” Valentin Dimitrov, were received in the Ministry of Interior on February 23-rd, 2005.
Source: Sega (20.07.2006)

The Sofia municipality and the economy ministry should form a working group to fast-track the privatisation of the capital city's district heating company, representatives of the World Bank and EBRD said at a meeting with deputy economy minister Valentin Ivanov The creditors of the heating company are concerned about the serious delay in the staffing of the group. The economy minister and the Sofia city mayor signed a month ago a memorandum on the sale of the heating company which envisaged the creation of a special working group for the purposes of the procedure and closure of the deal by the end of 2007. Under the memorandum, the privatisation format should be picked by the end of August. The city of Sofia owns 58.2% of the heating company with the remainder held by the state. The EBRD has loaned the heating company EUR 30 mln while the World Bank has extended EUR 26 mln for the rehabilitation of the transmission network. The EBRD and the World Bank said they will notify in writing to the Sofia mayor and the Sofia municipal council the alarming delay in fulfilling earlier promises for transparent and quick privatisation of the heating company.
Source: Dnevnik (31.07.2006)

Sofia Central Heating Company (SCHC) may be declared bankrupt just before the beginning of the new heating season. "All I can do is declare SCHC bankrupt," Bulgaria's Minister of Economy and Energy Roumen Ovcharov stated in connection with the sluggish preparation for the privatization of the company. Over a month ago, Minister Ovcharov negotiated with the Chair of Sofia Municipality, Vladimir Kisiov the establishment of an interdepartmental working team to decide the privatization procedures of SCHC. But nothing has been done so far. As Standart already wrote, Mayor of Sofia Boiko Borissov is against the privatization of the heating company. Mayor Borissov is even working out a recovery strategy. Borissov has not appointed officials for the working group yet. "I will have to declare the SCHC bankrupt to start the privatization procedure," Minister Ovcharov stated. At present, SCHC owes over BGN 60 million to the state-run company Bulgargaz, which makes well informed think that Borissov's intention to keep SCHC all municipality-owned is far from achievable. The European Bank for Reconstruction and Development (EBRD) and the World Bank are also pushing for the privatization of SCHC. End-last week, representatives of the two financial institutions had a meeting with Bulgaria's Deputy Minister of Economy and Energy, Valentin Ivanov, to discuss the serious delay of the privatization of the company. The two banks have granted state-guaranteed loan to the heating company, but due to non-execution of a clause from the contract - entering of a foreign operator in the management of the company, EUR 15 million from the loan were cut off.
Source: Standart (01.08.2006)

A privatization strategy for "Toploficacia" - Sofia should be developed by the joint working group, by the end of September. It will clarify the share of the company to be privatized, the requirements to the participants and the evaluation procedure for the competitive offers, deputy-minister of economy and energy Anna Ianeva said. 9 out of 16 represenatatives of the Municipality, the City Council, the Miunistry of Economy and Energy, the World Bank and EBDD took part in the meeeting.
Source: Standart (11.08.2006)

Under amendments to the Energy Act oked conclusively by the parliamentary energy policy committee, Bulgaria's national power grid operator NEK will be obliged to purchase at a preferential tariff electricity generated from wind, small-sized hydro power stations and biomass under 12-year contracts. The idea is to provide an incentive for the use of renewable energy sources (RES) in light of Sofia's pledge to the EU to increase from 1percent to 11 percent the share of RES electricity in overall domestic output by '10.
Source: Dnevnik (17.08.2006)

The investigation of the assets of the former head of the heating utility in Sofia Valentin Dimitrov continues with the relations of his relatives to offshore companies, said the Prosecution Office. "The way in which the drawn out millions were laundered is the most interesting. It is therefore monitored the contracts of companies that are both suppliers of the company, but have deals with offshore companies. We observe the credits taken by these companies", officials said. The interest of prosecutors was attracted in this direction, after it became clear that the company Bansko Properties Partners 2, in which the mother of Valentin Dimitrov - Ceca was a member until 19 July, has not yet developed business activities and has not made investments in the winter resort. Companies and investments in Bansko of board members of Heat Supply-Sofia have also been investigated. Through his partner Ivo Kolushev, the best man of Valentin Dimitrov - Krassimir Badyokov, is in indirect links with Inter Bulgarian Properties Gold. 45 per cent of the company is owned by two offshore company – Virginia-based Farao Limited and the Gibraltar-based Farnzi Holdings Limited. The company currently invests in a huge project called Simeonovo River Park.
Source: Standart (19.08.2006)

German concern Siemens is interested in the projects of the Sofia district heating company for the construction of a co-generation facility and for the modernisation of the civic transmission infrastructure, Brigitte Ederer, director general of Siemens' Austrian division, says in a letter to Sofia city mayor Boiko Borisov. In the letter, Siemens also says it is interested in managing the metropolitan street lighting and traffic control systems. Siemens is also in talks to manage the street lighting system of the city of Pazardjik, Southern Bulgaria. Just before it signed off for the summer recess, the Sofia municipal council authorised its representatives in the management of the utility to vote in favour of giving local company New Energy Vision the right to generate electricity on the site of the Zemlyane thermal power station, part of the city's heating company. The energy ministry, a minority shareholder in the heating utility with a blocking quota, said it will not second the decision of the municipality. The decision regarding New Energy Vision will be revoted at the first fall meeting of the municipal council.
Source: Dnevnik (22.08.2006)

Siemens Austria is interested in the projects for the construction of a co-generation power plant and the modernisation of Sofia's heating utility Toplofikatsia Sofia, it emerged from a letter sent by Brigitte Ederer, CEO of the company, to Sofia mayor Boyko Borissov. It also becomes clear that the company is interested in cooperating with the Sofia municipality on future infrastructure projects in the energy sector.
Source: Pari (22.08.2006)

Over 100 discontent customers of the Sofia district heating company mobbed the offices of the Consumers Federation in Bulgaria (CFB) Tuesday in response to calls from the organisation to file a BGN 110 mln class action suit against the utility. CFB is urging the utility customers to join the law suit which aims to establish the unlawfulness of consumption overcharges in the period after November 2002. The lawsuits will be brought against the utility shareholders: the energy ministry, the Sofia municipality, the company itself and the State Energy and Water Regulatory Commission. The power regulator will be sued over unrealistic heating energy tariffs. The amount in controversy includes the BGN 30 mln by which the audit of the State Financial Inspection Agency determined Sofianites were overbilled by the heating utility.
Source: Dnevnik (23.08.2006)

Ex-chief of Sofia Central Heating Company Valentin Dimitrov (jokingly nicknamed Valyo the Heat) cached BGN 2.5 million for a rainy day. The money was stacked in several strongboxes. Part of the bundles was found August 14. Dimitrov was police escorted in handcuffs to the Post Bank where he opened his vaults. "Rest assured the Prosecution has laid a hand on this money," said supervising prosecutor Bozhidar Dzhambazov. He added that the discovered cash is not part of the already distrained assets of the family. "We have confiscated a lot of incriminating documents," Dzhmbazov said further. So far, the sum total of "savings" the son and mother have in cash and bank deposits runs at three million euro. Their accounts are arrested by the Prosecution, but the sum will remain secret till the investigation is underway.
Source: Standart (25.08.2006)

The Sofia municipality has budgeted revenues of BGN 600 mln for 2007, up from BGN 500 mln this year, shows the budget draft moved for approval to the finance ministry. Some BGN 80 mln of the revenues are actually credits provided by the Japan Bank for International Development and the EBRD for the expansion of the metropolitan subway system and the development of new tram and bus lines, said deputy mayor Minko Gerdjikov. Sofia will be unable to collect the revenues from outdoor billboards and property disposals budgeted for 2006. The municipality has pocketed only BGN 3 mln from outdoor advertisers, well below the projected BGN 20 mln. The divestiture of municipal properties has rung up only BGN 15 mln versus a budget estimate of BGN 40 mln. Despite these shortages, revenue performance is on track due to higher revenues from local taxes and charges. The city has forecast a revenue of BGN 86 mln from garbage tax in 2007, up BGN 13 mln on 2006.
Source: Dnevnik (30.08.2006)

Russian gas monopoly Gazprom plans to acquire several heating utilities in Bulgaria via its local subsidiary Overgas, reports news agency RIA Novotsi. Overgas, 50 per cent-owned by Gazprom, has purchased the tender documents for the privatisation of the district heating companies in Varna and Plovdiv. The Russian company will square off against Germany's E.ON, CEZ of the Czech Republic, Gaz de France and Dalkia as well as a host of Bulgarian investors, said RIA Novosti. The bids for the Varna utility are due by October 23 while the deadline for the Plovdiv utility is October 9. According to RIA Novosti, Gazprom considers the investment in Bulgaria's energy industry a good bet. The power stations current run on coal but could switch to natural gas. Overgas already owns the heating company in Razgrad as well as gas distribution licences for 25 cities. In related news, Dalkia International announced it has certified compliance with the requirements for the Plovdiv heating utility sell-off and confirmed its long-term investment commitments in Bulgaria. The French energy company also said it has bought the tender documents for the privatisation of the Varna heating utility. Last week, Dalkia Bulgaria, a unit of Dalkia International, bought a 55 per cent stake in the local Company for Energy Saving from RWE Solution, a unit of German power utility RWE, at an undisclosed price.
Source: Dnevnik (30.08.2006)

The government would like to see the Sofia district heating company go private through a competitive procedure, said economy minister Rumen Ovcharov. The utility should be acquired by a strategic investor with long-term commitment to the development of the company, said the government official. Ovcharov met late last week with representatives of the World Bank and the EBRD which are loan-financing the rehabilitation of the company's transmission network. The government is proposing to divest 100 per cent its 42 per cent stake in the utility and for the Sofia municipality, which controls the remainder, to do the same. An advisory commission made up of representatives of the government, the Sofia municipalities and the creditors will be set up for the privatisation procedure. The World Bank and the EBRD have suggested to hire a company to advise the privatisation procedure. The idea is seconded by the municipality. The energy ministry and the creditors are backing a quick and transparent privatisation procedure, an approach that is not supported by the municipality. The utility should not be sold before it gets back into shape, said Sofia city mayor Boiko Borisov. There is yet no agreement on who should be in charge of the sell-off: the Sofia Privatisation Agency, the Privatisation Agency or a third party. The experts anticipate glitches in the procedure due to the complicated ownership structure of the company.
Source: Dnevnik (11.09.2006)

An international advisory company will be hired on criteria set by the World Bank and the EBRD to consult the privatisation of the Sofia district heating company, city mayor Boiko Borisov said Monday, September 11. The energy ministry, a 42 per cent shareholder in the company (the remaining equity is held by the Sofia municipality), has proposed that the utility should go 100 per cent private. According to energy minister Rumen Ovcharov, the sell-off is a do-or-die for the heating company because it is this close to bankruptcy. Putting to rest their diverging views on how quickly to go through with the sell-off plans, the government and the Sofia municipality agreed Monday that the company should go private by the end of 2007. Either the Sofia City Privatisation Agency or the Privatisation Agency will be in charge of the sell-off procedure.
Source: Dnevnik (12.09.2006)

Following the numerous breaches established at Toplofikatsia of Sofia, minister of economy and energy Rumen Ovcharov appointed check-ups a the heating utilities in Varna and Rousse. Working groups will analyse the way in which the cost price of heating is set and the spending of funds at the two companies between January 1, 2005 and June 30, 2006. The inspections will continue for 30 business days. A check-up of the readiness for the upcoming heating season will also be conducted at the utility in Shumen. The general shareholders' meeting of Toplofikatsia of Sofia, which was scheduled for September 15, was postponed until the end of the month, because the representatives of the majority owner, the Sofia municipality, did not turn up. The meeting had to discuss the dismissal of two board of directors' members, Georgi Nenkov and Georgi Rogachev. The debts of heating utilities in Bulgaria to Bulgargas currently total BGN 131.5 million, up by BGN 21.2 million since August 2005. The utilities account for about 35% of the total natural gas consumption in Bulgaria.
Source: Pari (18.09.2006)

Edward Nassim, Vice President for Europe, Africa, and the Middle East of the International (IFC) with the World Bank, proposed that the WB should work out a detailed plan for the privatization of Sofia's central heating company. He made this proposal during the 2006 Annual Meetings of the Boards of Governors of the International Monetary Fund and the World Bank Group. Bulgaria's Minister of Finance Plamen Oresharski and his colleague - Economy and Energy Minister Roumen Ovcharov are also participating in the forum. Minister Ovcharov invited Mr. Nassim at more detailed talks in Sofia. The strategy of the WB for Bulgaria provides that two or three loans a year, each one in the size of about US USD 300 million, should be granted to Bulgaria by 2009. For the whole period Bulgaria expects about US USD 900 million from the World Bank.
Source: Standart (19.09.2006)

Sofia's heating utility Toplofikatsia will auction off luxurious items used by former CEO of the company Valentin Dimitrov. Boats and water jetskis have drawn the strongest interest of the five bidders expected to take part in the auction. The total value of the items that will be auctioned off stands at BGN 50,000. The proceedings will be used for the settling of part of Toplofikatsia's debts towards Bulgargas. The sum, however, is an insignificant part of the total liabilities of the company, which exceed BGN 100 million.
Source: Pari (19.09.2006)

French utility company Dalkia Wednesday said is interested in the privatisation of the Sofia district heating company. The company is already involved in the sell-off procedures for the heating utilities in Plovdiv and Ruse. Dalkia applied for the position of manager at the Sofia utility 5 years ago and made the candidate shortlist but that procedure was never completed. The French company said it is aiming for a position of a long-term investor in Bulgaria. The problems facing Bulgaria's heating system come from the climate which is colder than other parts of Europe and from the transmission losses, said Dalkia. According to the French company, power transmission and production should be managed separately.
Source: Dnevnik (21.09.2006)

France's energy supplier Dalkia International will participate in the privatisation of Sofia's heating utility Toplofikatsia, Jean-Michel Mazalerat, director of the company for Central and Eastern Europe said. Dalkia also participates in the procedures for the privatisation of the heating utilities in Plovdiv, Varna and Rousse. Dalkia is a long-term investor not seeking quick return of investments, Mazalerat added. The company can contribute to the development of the heating utility network in Bulgaria, according to Mazalerat.
Source: Monitor (21.09.2006)

Investment banks, consortia and international advisory companies are eligible to consult the privatisation of the Sofia district heating company, it was announced Monday after a meeting of the working group in charge of the procedure. The successful candidate will have to devise the privatisation format for the company and will receive remuneration from the EUR 15 mln provided for the rehabilitation of the transmission network by the EBRD. The EBRD has committed EUR 30 mln in total. Half of the amount has been absorbed. The remainder will be made available after the start of the privatisation procedure. The World Bank has contributed EUR 26 mln for the reconstruction of the utility with a further EUR 30 mln coming from the Kozloduy International Decommissioning Support Fund. The government, a 42 per cent shareholder in the utility, and the majority owner, the Sofia municipality, are pushing 2 different sell-off approaches. The economy ministry insists that the utility should be divested 100 per cent while the municipality advocates to spin off the transmission and power generation operations and offer for sale only the transmission division.
Source: Dnevnik (26.09.2006)

France's Dalkia International has offered the highest price for the 100% acquisition of the Varna district heating company. The sale procedure also featured Britain's Ener-G Plc. which bid 5 ml levs less than Dalkia's 6.7 mln euro and CEZ of the Czech Republic which offered 4.5 mln euro. The deal should be finalised by the end of 2006, said Privatisation Agency chief Todor Nikolov. The new owner will have to invest to expand the transmission network of the heating company. Dalkia was ranked second behind Austria's EVN in the privatisation procedure for the Plovdiv district heating company. The French company is also in frame to acquire the heating utility based in Ruse and is interested in the sale of its counterpart in Sofia as well.
Source: Dnevnik (24.10.2006)

Top executives of Sofia district heating company Toplofikacia and a local business woman were arrested Thursday in connection with an investigation into the siphoning off of funds from the utility. Georgi Rogachev, the Toplofikacia executive director, Emil Antonov, member of the board of directors, Lina Ablanska, former chief of the material and technical procurement department and Maya Stoilova, owner of 3 of Toplofikacia's suppliers were rounded up by the police on charges of gross embezzlement. According to unofficial information, Rogachev, Antonov, Ablanska and Stoilova have illegally pocketed over BGN 1.5 mln. This is the fifth investigative procedure to be launched as part of the Toplofikacia affair. Former Toplofikacia executive director Valentin Dimitrov is the subject of two separate investigations. Investigative proceedings have also been launched against the company's board and against banking officials that lied to the prosecuting authorities about the existence of bank accounts in Dimitrov's name.
Source: Dnevnik (14.12.2006)

“I’m sure that if the Prosecution maintains the same pace of work, it will find out embezzlements in other municipal companies such as in Toplofikacia Sofia (Sofia heating utility) – in Sofiyski Imoti (real estate company), Parking Lots and Garages Company and Planting Company”, the mayor of Sofia Boyko Borisov. According to him, the Prosecution has legitimized the findings of Sofia municipality. He explained that Toplofikacia’s Executive Director Georgi Rogachev had been kept on his post because the municipal authorities knew that he was being investigated over embezzlements and an earlier dismissal could have impeded investigation work.
Source: Agency Focus (15.12.2006)

EBRD (European Bank for Reconstruction and Development) is ready to grant emergency funding to Sofia’s heating distributor, following the agreement that mayor Borisov signed with the bank’s deputy-manger Henry Russell. EBRD has so far allotted EUR 30 to Toplofikacia, as the latter has only managed to appropriate EUR 15 million. Now the financial institution is ready to unleash part of the second tranche for stbilization of the heating distribution company, which should be negotiated with the Ministry of Finance beforehand.
Source: Agency Focus (18.12.2006)

The Sofia Municipality will elect today a new Heating Utility Executive Director. The last director Georgi Rogachev and his deputy Emil Antonov were arrested on 13th December for embezzlements. A day later the Prosecutor on the case Bozhidar Dzambazov explained the scheme on which BGN one million was drained from the company. The Heating Utility previous executive director Valentin Dimitrov is also in custody for money laundering.
Source: Agency Focus (18.12.2006)