National Company Railway Infrastructure cannot pay under the cession National Company Railway Infrastructure can not repay its debt under the cession contract with Eurometal, transport minister Mr. Petar Mutafchiev said. He admitted that the cessioner has pressed for the repaying of the debt. In his words, talks with Eurometal will continue after the holidays. They don’t have money to pay and we have received only BGN 1 mln so far, Eurometal CEO Lyudmil Stoikov commented. He explained that he had sent several warning letters to the infrastructure company to start performing its obligations. In his words, distraint of bank accounts may be imposed as an extreme measure. Mr. Stoikov said he doubted that it would be necessary. So far Bulgarian State Railways (BDZ) has rendered only 500 wagons for scrap, saying the company needed them, he explained. In March 2005 the company, BDZ and the National Electricity Transmission Company (NEK) signed a cession contract under which Eurometal and the US company Êingston Enterprises bought BGN 60 mln of debt of the infrastructure company to NEK. This equals the annual state subsidy figured in the 2006 budget that the company is to receive. Under the contract the infrastructure company will repay its debt to the Pernik-based company within 2 years at the fixed interest rate of 7 per cent.
Source: Dnevnik (03.01.2006)

Bulgaria ranks fourth in electricity export in Europe. In 2005, only France, the Czech Republic and Poland exported more than Bulgaria did, officials from the National Electric Company (NEC) announced. Bulgaria sold the record-breaking 7 600 million kWh which is an increase of 30% compared to 2004. Other 26 780 million kWh were produced for the domestic market. The increased export opportunities and meeting the domestic electricity market demands are results of the good functioning of the power plants and the clever use of the huge water resources during the year, said officials from NEC. In 2005, the record-breaking for the last 14 years 44 million kW/h were produced. The increase in the production of electricity from Bulgaria's water power plants grew by 33% compared with 2004. Last year, electricity consumption in Bulgaria grew by 2.7%. Because of the economic expansion, enterprises from the public sector consumed by 5.8% more electricity. At the same time, households reduced their consumption by 3%. Some BGN 80 million (EUR 41million) were invested in the modernization and reconstruction of the electricity transmission network. Other BGN 102 million were invested in the modernization and the construction of new water power plants.
Source: Standart (09.01.2006)

During 2005, Bulgarian households have shrank electricity consumption by 3 per cent, according to NEK’s annual report. The positive trends in the economy, however, have increased the electricity consumption in the public sector by 5,7 per cent and the rise as a whole - by 2,7 per cent. In 2005, a record electricity production was reported – 44 bln. KWh.
Source: Sega (09.01.2006)

Amendments encourage RES development Amendments to the Energy Act provide for stimuli for power production from renewable energy sources (RES). The changes were presented by Bulgarian deputy minister of economy and energy Ivanka Dilovska. The power generated from RES will be bought out for an eight-year period at prices set for each year. This will apply to all capacities that start production by the end of 2011. The draft introduces the mandatory requirements for independence of the operators of electricity and gas transmission and distribution networks. It also elaborates the regulations concerning the relations in a liberalised energy market. After July 1, 2007 all household and industrial consumers will be able to choose their electricity supplier. The prices, however, will be regulated even after that date. The amendments are expected to be submitted for discussion to the council of ministers on January 26.
Source: Pari (12.01.2006)

Russian company Atomstroyexport offers to deliver two new units for Belene NPP. This is one of the variants offered by the Russian company for the construction of the NPP. The offer was aired by Vladimir Pirigin, director of Atomstroyexport department for construction of new nuclear power plants outside Russia, before Deutsche Welle. The Russians offer a developed model of nuclear unit of type B-466 that is of 60 years of exploitation life. Currently a BBEP 1000 nuclear unit, produced in the Czech Republic, is stationed at Belene site. It is of 40 years of exploitation life, according to Pirigin. The other variant the Russians suggest is that the construction of the first unit should be completed and modernized and the second unit of B-466 type to be then constructed. Belene NPP construction bids' deadline expires on noon February 1. Apart from the Russians who are in consortium with Framatom, the Czech consortium Skoda Alliance, with the participation of the American City Bank and the Italian UniCredito, is the other bidder. If the Czech consortium wins the tender, they will need cooperate with the Russian nuclear companies as Belene project is Russian and the delivered nuclear units installations are also Russian made, Pirigin commented.
Source: Standart (12.01.2006)

The regulatory environment for the operation of the future buyers of the thermal power plants in Varna and Rousse will not be adjusted because that could prompt the other participants in the sell-off to contest the procedure in court, State Energy and Water Regulatory Commission (SEWRC) chairman Konstantin Shushulov said on Thursday. Under the effective regulations, national power grid operator NETC will sign five-year Reserve Capacity Mechanism (RCM) contracts with the future owners of the thermal power plants in Varna and Rousse, making RCM payments to the power station owners according to a tariff set by the SEWRC. The refusal of the energy watchdog to revise the regulatory framework, allowing Russia's RAO EES, which bid for the TPP in Varna, to seek higher RCM payments was reportedly one of the reasons the potential buyer quit the sell-off procedure.
Source: Dnevnik (13.01.2006)

Sergei Stanishev, the Bulgarian Prime Minister, will negotiate the export of electricity to Turkey. He will be on an official visit to Ankara and Istanbul on January 17-18 at the invitation of his colleague Bulent Ecevit. Stanishev will also have a meeting with the Turkish president Ahmet Necdet Sezer. The export of electricity was stopped by the Turkish side in April 2004. Now it depends on the construction of the Gorna Arda waterpower cascade project that had been frozen. Representatives of 120 Bulgarian firms will accompany the Bulgarian premier. This is the biggest Bulgarian business delegation in the modern history of the economic relations between the two countries. The interest is high because of the dynamic economic relations between Bulgaria and Turkey during the past few years. In the first half of 2005 the commodity exchange grew by 41 percent and reached USD1.1 billion. Thus, Turkey ranks fourth in Bulgaria's commodity exchange with the world and is the first among the Balkan countries.
Source: Standart (16.01.2006)

Not listing units 5 and 6 of the Kozloduy nuclear power plant (NPP) among the assets of the company that will complete the Belene NPP is the better option, said deputy energy minister Ivanka Dilovska, adding that the government will have to take a decision on the new corporation very soon. Parsons E&C, appointed as engineer/architect for the construction of the Belene nuclear power plant (NPP), has proposed to list the Belene site in the assets of a new company together with units 5 and 6. The inclusion of units 5 and 6 in the new nuclear energy company will not make the Belene project more attractive for the financial institutions because of the burden of the loans taken out for their modernisation, said Dilovska. The credits, backed by state guarantees, add up to 215.7 mln euro and were extended by Ex-Im Bank, Roseximbank and Euroatom. The energy ministry has been mum on whether the creditor banks have been sounded on the creation of the new nuclear energy company. The two consortia interested in building the NPP are formed by France's Framatome with Russia's AtomStroyExport while the other tie-in comprises Czech Skoda Praha, Citibank, Italy's Unicredito and Czech Komercni Banka. The bid receipt deadline has been pushed back to February 1 at Parson's request. The Belene project was suspended in the early 1990s due to cost overruns and environmental concerns. By the time the building of the 1,000MW Soviet-designed plant was put on hold, some 40% of construction works worth $1.0 bln had already been finished, including the delivery of a Skoda reactor. The estimated cost of completing the plant is seen anywhere between 1.5 and 4 bln euro.
Source: Dnevnik (16.01.2006)

The Supreme Administrative Court postponed for the third time the case for the electricity prices, this time for February 13, 2006. The reason is that this would give time to the expert to answer additional questions. The case was submitted by protest of the Deputy Chief Public Prosecutor Mr. Mitio Markov and of citizens against the decision of State Commission for Energy and Water Regulation to increase the electricity price from July 1, 2003.
Source: Sega (17.01.2006)

During the first day of PM Sergei Stanishev's visit to Turkey it became clear that Bulgaria would renew its electricity exports for Turkey. The Bulgarian PM and his Turkish counterpart Recep Tayyip Erdogan had a one-to-one conversation. Turkey stopped importing electricity from Bulgaria in 2003. "Now the country is ready to restore them," Stanishev announced. "We have the potential to export electricity for Turkey," The Bulgarian PM added. Erdogan described Stanishev's visit as a new period in bilateral relations. Turkey expressed its will to follow the example of Bulgaria which is successfully nearing its EU accession. Erdogan stressed the important role of the emigrants for the friendly relations between Turkey and Bulgaria. He addressed the Bulgarian PM with the words: my friend and counterpart Sergei Stanishev. "There aren't political problems of any kind between the two countries and this favours the development of the good relations between them," Erdogan accentuated. Turkish investments in Bulgaria amount to US$500 000 and are constantly rising. Stanishev invited Erdogan to Bulgaria to inaugurate together Sise Cam's plant near the town of Targovishte, northeastern Bulgaria. Erdogan laid considerable stress on tourism as a factor for improvement of the relations between the Turkish and Bulgarian people and enhancement of the cultural dialogue. He mentioned that 1.5 million Bulgarian tourists visited Turkey in 2005 but that the same hardly held true for Bulgaria. For this reason he recommended alleviation the visa control for Turkish citizens on Bulgarian borders. Both Bulgaria and Turkey are interested in the Nabucco project for transit of gas from Iran via Turkey and Bulgaria towards Europe. Stanishev believes the implementation of this project will be of use for the European countries. "The Turkish authorities control the bird-flu situation and are doing their best to prevent the epidemic from spreading into Turkey's neighboring countries," Erdogan said.
Source: Standart (18.01.2006)

German Commerzbank has officially proved its interest in the financing of NPP Belene's construction, it transpired after a meeting of Commerzbank's officials with Bulgaria's Minister of Economy and Energy, Rumen Ovcharov. Commerzbank was established some 135 years ago in Hamburg and it is among the four biggest and leading German banks. Commerzbank's officials declared the bank's readiness to become a leading mediator in the provision of a syndicated loan for the construction of NPP Belene. Preliminary calculated, the construction works of 2 nuclear reactors on the ground of NPP Belene will cost about 5 billion euros. German RWE is willing to build a new power site in Thermal Power Plant (TPP) Maritsa-Iztok 3. "The management of the company has approved a project for the construction of a site with an output of between 400 and 600 megawatts, stated Mathias Hartung, member of RWE's Board of Directors, who also had a meting with Bulgaria's Minister of Economy and Energy, Rumen Ovcharov, in Berlin. RWE executes a contract for the rehabilitation of TPP Maritsa-Iztok 3 and for the construction of sulphur-purifying installations. The German company also has a contract for the construction of a shelter for a temporary safe-keeping of the radioactive waste from NPP Kozloduy. The shelter construction costs are worth 48 million euros and it has to be finished off by 2008. At a forum, dedicated to Bulgaria and held in Munich yesterday, Minister Ovcharov appealed to the German companies to invest in Bulgaria's energetics, tourism, and electronics, machine building. Some 200 participants took part in the forum, hosted by Deutsche Bank. "The development of the Bulgarian-German relations will get a new incitement with the visit of German's Chancellor, Angela Merkel, to Bulgaria, which is expected very shortly," Minister Ovcharov said. "BMW will examine the opportunities for the production of hydrogen in Bulgaria," Stefan Krause, BMW board member in charge of finance, stated at a meeting with Minister Ovcharov in Munich. BMW is planning to start the mass production of cars with hydrogen engine within a year. BMW will also examine the opportunities that Bulgarian companies become sub-suppliers of its car parts.
Source: Standart (19.01.2006)

Bulgaria's national electricity grid operator NETC said it will start the construction of a 400kV powerline link with neighbouring Macedonia. NETC's Macedonian counterpart has hired for the project SAG of Germany, a unit of utility company RWE. The German company beat to the contract Iberdrola of Spain, Croatia's Dalekuvod, Elektromonta of Romania, China's CWE, Macedonia's EMO AD/EMO EB and Energoinvest of Bosnia and Herzegovina. The 150 km powerline will connect the Chervena Mogila substation near the Bulgarian town of Radomir with its counterpart facility Dubrovo in Macedonia. A total of 80 km of transmission infrastructure that will be installed on Bulgarian territory and will cost 20 mln euro. NETC has committed 2.5 mln levs to the project. Elektrostopanstvo na Makedonija co-funds the remainder of the venture on a 40 mln euro EBRD loan and its own funding.
Source: Dnevnik (20.01.2006)

Johannes Teyssen, member of the E.ON board of management, said during his meeting with the Bulgarian energy minister in Munich that the company is ready to invest in gas distribution in North-eastern Bulgaria where its two power distribution units are located. The executive said E.ON could also buy existing power generation facilities in Bulgaria or engage in the construction of new capacity. The EBRD said it would buy from German energy service provider E.ON shares in the electricity distribution companies based in Bulgarian cities Varna and Gorna Oryahovitsa. The deal will be signed next Tuesday. Under the contract for the privatisation of the power distributors, EBRD could acquire up to 16% of the equity. A source close to the deal said the bank would acquire around 8%, leaving E.ON with 59%. The Bulgarian state owns the remaining 33%. E.ON bought 67% stakes in the two power distributors in 2004, paying 140 mln euro.
Source: Dnevnik (20.01.2006)

National Electricity Transmission Company most probably will restructure the company in Holding with subsidiaries for the transfer and trade activity. In the parent company will stay the debts. This is one of the variants, which was presented by part of the company’s management during the meeting with the minister of economy and energy, Mr. Roumen Ovcharov and European Bank for Reconstruction and Development’s representatives, at the end of last week.
Source: Dnevnik (23.01.2006)

In connection with the published information by National Electricity Transmission Company (NETC) SPJSC, which reads that NETC is not able to and declines to credit Kremikovtzi JSC anymore, from Kremikovtzi JSC explained that the amount due of BGN 95 mln is in the frames of the payment schedule spaced out for the next years. In the frames of the specified by NETC date - February 27, 2006, Kremikovtzi JSC will take the necessary steps to normalize the relations with NETC and to pay up the amount of due according to the agreements. During the last five years NETC has showed understanding towards the management of Kremikovtzi JSC at similar defer of payments. We believe that again an understanding for overcome of the deferment would be showed.
Source: Company information (28.01.2006)

Moscow pressures Bulgaria into changing gas prices Gazprom again insists on lowering the tariffs they pay for the transit of gas via Bulgaria, as well as on terminating barter agreement, under which Bulgaria is getting gas for transit. The demands of the Russian gas giant are listed in a new letter Bulgaria received Thursday night, said Minister of Economy and Energy Roumen Ovcharov during the latest Q&A session in Parliament. In practice, this would result in double high delivery prices of natural gas on the Bulgarian market. Ovcharov told the MPs that the letter of Gazprom is a good ground for future negotiations that will guarantee our national interests in short- and long-term perspective. The Minister added that Gazprom keeps on pressing Bulgaria into altering the original contract, while Bulgaria's stand remains the same. Ovcharov admitted that a visit to Russia is being negotiated, but the official invitation has not yet come. The steady tendency towards raising crude, liquid fuels and natural gas prices is a fact that bears out the importance of the Belene project (a new Bulgarian nuke on the Danube,) Ovcharov added. The minister declined to go in details as to who of the candidates for the construction of Belene would be picked, as the deadline for the submittal of bids expires in five days. In his opinion, however, the willingness of three private companies to become majority holders is a favorable sign proving the cost-effectiveness of the Belene project. The price of electricity will leap up after the decommissioning of Units 3 and 4 in the Kozloduy NPP by the end of the current year, Ovcharov admitted. He, though, flatly denied that the prices were going to double. He also specified that Bulgaria should be particularly careful about the contracts for power export in 2007, in order to guarantee home power consumption after the closure of the two reactors. According to him, in future power export will be reduced to 2 billion kW/h a year.
Source: Standart (28.01.2006)

Mounting debts to halt power supplies to Kremikovtzi steel works The National Electricity Transmission Company (NETC) said on Friday it would gradually cut electricity supplies to steel maker Kremikovtzi over unpaid debts totalling 95 mln levs. The power company said it would bring supplies down to the technical minimum of 20MW by February 17. In early 2004, NETC agreed to a 10-year rescheduling of Kremikovtzi's debts which back then stood at 70 mln levs. More rescheduling agreements, which the steel maker subsequently failed to honour, followed. The latest was negotiated in July 2005 when the power company again threatened to discontinue supplies. Meanwhile Kremikovtzi's liabilities increased by 5-6 mln levs over the past several months. Kremikovtzi said it will take steps to normalise relations with NETC, adding that it had met with understanding on the part of the electricity operator in the past. Kiril Gegov, the executive director of gas distributor Bulgargaz, announced in the beginning of this week that his company too was owed money by Kremikovtzi, but would not cite figures. Last August India's Global Steel Holding Ltd. (GSHL), part of the Ispat Group, acquired a 71% stake in Kremikovtzi from Finmetals Holding. Kremikovtzi posted an unconsolidated loss of 78.2 mln levs and 30% drop in sales for January-September 2005. Debts stood at 425.5 mln levs.
Source: Dnevnik (28.01.2006)

The bids for Belene nuclear power plant will be opened on February 1, the National Electricity Company said. The opening of the preliminary bids of the tender participants, bidding for contractors for the design, construction and putting into operation of the first and second units of the second Bulgarian NPP will be held in the premises of Kozloduy NPP in Sofia.
Source: Standart (31.01.2006)

The candidates for the construction of NPP Belene presented two hundred and six cardboard boxes full of documents. Over two hundred people crowded into the small hall in the office of NPP Kozloduy in Sofia, yesterday, to see the opening of the bids. "This is Bulgaria's number one project for the 21st century," said Ivan Hinovski, Chairman of the Bulgarian Energy Forum. The Russians deposited their 177 cardboard boxes full of over 3,200 pages of documents as early as 2:35 p.m. on January 31. Each box weighs over ten kilos and the total weight of the bid is about three tons. Skoda Alliance submitted their documents at 9:15 a.m. yesterday. The papers were stacked in 29 cardboard boxes weighing 525 kg. At 2:00 p.m. sharp, Yulian Zhelyazkov, Chairman of the Bids Evaluation Commission, opened the boxes. Both of the candidates offer three variants for the construction of NPP Belene. The first variant provides the construction of two 1,000-megawatt power units, using the equipment already installed at the site of NPP Belene. The second variant envisions the construction of two power units without using the installed facilities. The Russians propose a third variant, which provides the construction of a nuclear island, with a fully-equipped 1,000-megawatt power reactor on it. The Czech group proposes the construction of one power turbine, instead. The candidates declined to comment on the financial frameworks of their bids. By the end of July, the Bids Evaluation Commission will present a protocol with a proposal for election of an executor of the project before the Board of Directors of the National Electricity Company," Zhelyazkov said.
Source: Standart (02.02.2006)

Belene NPP to cost up to EUR 4bn Russia’s Atomstroyexport and Czech Skoda Alliance submitted offers for the construction of the Belene nuclear power plant (NPP) in Bulgaria by the February 1 deadline. The companies declined to comment their official parameters but said they had agreed their proposals with the framework set by Bulgaria and the value of the project would range between EUR 2 billion and EUR 4 billion. In line with the tender documentation, the candidates propose two versions of their offers. One of them envisages using the existing equipment and infrastructure, the other is for building an entirely new plant on the site. The infrastructure at Belene is estimated at EUR 550 million in the tender documents. In both cases, the future contractor has to deliver two 1,000-megawatt units. The first reactor has to start operating in 2011-12, its electricity has to cost between 2.4 and 3.6 eurocents per kWh. Atomstroyexport specified that the price of construction would depend to a great degree on the security system to be chosen by the tender commission and the National Electric Company (NEK), which is investor in the project. Skoda Alliance (a consortium of Skoda G.A.M., Skoda Praha and the Czech nuclear research institute) commented that their offer was based on the concept of the Temelin NPP in the Czech Republic. One of the main advantages of Skoda Alliance’s offer is the possibility to use alternative fuel supplies, since Temelin runs on fuel supplied by US Westinghouse. According to the procedure, within six months the tender commission has to review the offers, meet with the candidates and submit a proposal for selection of a contractor to NEK’s board of directors. The negotiations with the two companies will begin after an initial ranking of the offers. The company that will design, build and put into operation Bulgaria’s second N-plant has to be chosen by the end of this year.
Source: Pari (02.02.2006)

Ovcharov: Belene NPP project will fail without Russia The construction of NPP Belene without Russia's participation is extremely hard from a technical point of view and it is quite questionable from a legal point of view, Bulgaria's Minister of Economy and Energy, Roumen Ovcharov, stated on his return from Moscow. Minister Ovcharov grounded his opinion with the fact that the reactors WWER 1000 were Russian-made. Such a type has already been delivered to Belene construction site. One of the bidders, Czech Skoda Alliance, offers the same type, but modernized. However, Minister Ovcharov's comment on the issue should not be interpreted as an unconditional support for Russian bidder Atomstroyexport. Fifty percent of the shares of the Czech bidder are also held by a Russian company. This is Skoda Nuclear Machinery (SNM), which is 100% property of the United Heavy Machinery (OMZ). The main difference between the offers of Atomstroyexport and Skoda Alliance are nuclear reactors for Belene. The Czech company is ready to install 2 reactors WWER 1000/W 320, which are the same as reactors 5 and 6 of NPP Kozloduy, but they are modernized with control equipment from Westinghouse as those used in the Czech NPP Temelin. "The technical improvements in our reactors make them the safest WWER 1000 in the world," representatives of Skoda Alliance stated. Atomstroyexport offer to finalize the construction works of the already existing reactor WWER 1000/W 320, as well as a new type of reactors, which haven't been installed elsewhere - WWER 1000/W 466. Another difference between the bids is that the Czech reactor is modified to use nuclear fuel both from Russian company TVEL and from US company Westinghouse. It is up to those who will run the NPP to decide which nuclear fuel will be used in Belene.
Source: Standart (03.02.2006)

Mr. Pramod Mittal, owner of Kremikovtzi JSC: I must admit that the beginning of the work in Kremikovtzi proved much more difficult than I expected. We were forced to take many unexpected charges. We invested BGN 32 mln of our own capital and quite a lot of our family funds in current repairs. However our experts are just before finishing of the all-round strategy for the company's development, which will transform it into a modern and competitive steel maker. - Mr. Mittal, why did the management of the National Electricity Transmission Company (NETC) threaten you that it would stop the power supply to Kremikovtzi? Is it true that you do not pay your debts to NETC? NETC says you owe it a total of USD 95 mln. - The debts of Kremikovtzi that we succeeded are being paid according to the contracted payment schedules. So current difficulties are impossible but total non-execution – not. I would like to assure the management of NETC of our correctness. We in Global Steel have a more radical offer – to repay in advance all Kremikovtzi’s old debts to NETC and Bulgargaz and to sign a mutual agreement with the Government for the resolution of open and succeeded problems. - Does the Government know for your intentions? - In the coming days we will offer to the ministers Mr. Rumen Ovcharov and Mr. Plamen Oresharski such an agreement. It will create totally new situation for Kremikovtzi and particularly for our relations with NETC and Bulgargaz. - A rumour has it that you have problems with your debts to the National Social Security Institute (NSSI). - Our relations with the NSSI are completely satisfactory. The debt of the past has decreased significantly over the past years. We have an agreement that both sides are observing. The employees of Kremikovtzi JSC should not worry. Their old age is secured as the law provides. - Last September you said that in three years you will invest more than USD 300 mln in Kremikovtzi and will make the company "the steel lion of the Balkans". Will you manage to fulfill your investment programme? - There is no doubt that these investment intentions will be fulfilled. The funds however should be invested when there are clear projects. They will be implemented in compliance with the requirements of the European Commission within the framework of the so-called viability plan. The good news is that we are about to finish a new overall strategy for the development of the company. - What does this strategy include? - It concerns a package of projects, which will make Kremikovtzi very stable and competitive steel maker. Our aim is to make it a centre of new technology projects. The first task of the company this year is to produce over 1.2 mln tons of finished production, which means over 120,000 tons a month, as the increase of the output is the basis of all other successes. These are really ambitious but realistic tasks. - How are you going to solve the serious environmental problems of the company? The installations are from the 1960-70s? - By 2009–2010 Kremikovtzi should set its capacities in compliance with the EU’s principal environmental standards. This supposes big capital investments and if we do not make them, we are going to suffer hard sanctions by the European Commission. And these sanctions would be fair because modern industries are good when they do not pollute the environment. - Quite often in the past and even now workers could be heard to complain that their wages are not paid on time. The trade unions have even protested recently. What are the reasons for the delays? - I heard some time ago one of the plant’s directors to say, “Kremikovtzi may delay but always pays”. The truth is that every problem with the supply or marketing of the finished production leads to delay of the salaries in the company. Thus, in January because of the low temperatures and the stop of the gas supply we got direct losses and this delayed the payment of the wages. I think though that this system must be changed. Kremikovtzi should have more financial and input reserves. Now the average wage is BGN 730-750, which is about twice the average salary in the country. This is not the limit however. If we fulfill our programme for 2006, I expect the wages to rise more. - What is your opinion of the business climate in Bulgaria? You have units in dozens of countries all over the world. - Trends are very positive. Even impressive. The credit rating of the country has been rising. At the same time the world economy is now entering a new cycle – higher prices of oil and natural gas, fierce competition on all markets, global redistribution of the investments. I think that Bulgaria and its business will cope with these challenges. But I expect the role of the state monopolies to decrease as it is in all Europe. I also expect local statesmen to pay greater attention to big investors. - What are your relations with the government? - I had only brief meetings but I have wonderful impressions by the Prime-Minister Sergey Stanishev and the ministers Roumen Ovcharov and Plamen Oresharski. I believe we will come to an agreement on all open issues, which will also bring direct benefits to the budget. - Kremikovtzi is one of Bulgaria’s biggest exporters to Europe. Do you expect any changes after the country’s accession to the EU? - The company will continue exporting where its production is valued most. In the first place, this is Europe. The European markets are our absolute priority. We will pay bigger attention to the domestic market. It is necessary however to change everything according to the European criteria – discipline, order and most of all efficiency. Every employee at our company should produce as much as the employees at our rival companies. And it is our duty to provide the necessary equipment and investments. - Indian experts have already arrived at Kremikovtzi. How do they work with their Bulgarian colleagues? - My style is not to separate people by nationality or origin but by skills and loyalty. We have fantastic Bulgarian experts. We have good experts from India and Germany. I think we need more young professionals on leading positions. - Tell us something about Global Steel? Legends about your family’s fortune are told. - My father started making steel in 1950 when I was not born yet. The whole life of my family is connected with this business. Global Steel, the owner of Kremikovtzi JSC, produces an average of 12 mln tons of steel a year, which ranks us among the world’s first 15-17 companies. I have to point out that Global Steel is one of the most dynamic companies, which is obvious by the support of big international banks. - Mr. Mittal, you have already been in Bulgaria for half an year. How do you like it? - I have not traveled in Bulgaria a lot but I could say that you have beautiful country and very skilled metallurgists. I would like to thank everybody who believed us and with whom we work every day. The world is one big village – we all bring our cultures closer. In this respect Bulgaria is among the best countries in Europe by hospitality and tolerance.
Source: Trud (06.02.2006)

Serious talks for the replacement of one of the companies in the international consortium contracted to carry out the rehabilitation and the modernisation of Bulgaria's Maritsa Iztok 3 thermal power plant (TPP) are underway, Tsvetana Kishkilova spokeswoman for the TPP said. The company in question is German DSD Dillinger Stahlbau GmbH, whose specialists are in charge of the rehabilitation of the TPP units, where the implementation of project has already been delayed by 18 months. The consortium comprising DSD Dillinger Stahlbau GmbH and RWE Industrie-Losungen GmbH was supposed to complete the modernisation of the TPP in 42 months, as was announced at the start of the project on April 9, 2003. Maritsa Iztok 3 is owned by power company Maritsa Iztok JSC, a joint venture between Entergy Power Holding Maritsa BV, registered in the Netherlands, and Bulgaria's National Electric Company (NEK). Bulgaria's deputy economy and energy minister Yordan Dimov has already put forward the question about the replacement of the contractor. An option for the termination of the contract with Entergy Power Holding Maritsa BV and regaining ownership over the TPP as a forfeit for the consortium's failure to complete the project in time has also been considered, leftist MP Zlatko Zlatev said in Stara Zagora. However, this is not likely to happen prior to the end of the project, Zlatev added. The Maritsa Iztok 3 project envisages the rehabilitation and modernisation of the four power generating capacities at the TPP with an overall capacity of 840 megawatts. The life of the TPP will be extended by another 15 years. The overall value of the project amounts to EUR 600 million.
Source: Pari (07.02.2006)

Russian gas giant Gazprom has become the leading bidder in the tender for the construction of Belene nuclear power plant (NPP). The giant, via its daughter company Gazprombank, not only stands behind the two candidates, but has even increased its share in one of them - the consortium, headed by the Czech Skoda company. On February 1, Skoda and the Russian Atomstroyexport submitted their offers for the building of the new nuclear power plant in Bulgaria. Investors, connected with Gazprombank, have acquired 75% of the United Machinery Group, (OMZ) which was owned by Russian tycoon of Georgian origin Kakha Bendukidze, AFP reported. On the other hand, OMZ is the owner of Skoda JS firm for nuclear equipment. Gazprom owns 53% of Atomstroyexport. Thus the Russian gas giant will have practical share in the project for the construction of Belene NPP, no matter which of the two candidates wins the tender.
Source: Standart (09.02.2006)

Italian gas and water utility Enel is in talks to buy the stake held by Entergy of the U.S. in Energy Company Maritsa Iztok 3, the company in charge of the rehabilitation of thermal power plant Maritsa Iztok 3. Energy Company Maritsa Iztok 3 is co-owned by Dutch-registered Maritsa Iztok Power Holdings with 73% and Bulgaria's national power grid operator NETC. Enel holds 60% of Maritsa Iztok 3 Power Holdings, the remainder is controlled by Entergy. D&D, the agency in charge of Enel's PR in Bulgaria, confirmed that the buyout talks between the 2 shareholders. Entergy is contractually allowed to pull out of the project after the completion of the rehabilitation of unit 1 of the thermal power station which is expected next month. The rehabilitation of unit 1 was scheduled to finish 2 years ago but that deadline was missed by the contractor, DSD. NETC chief executive director Lyubomir Velkov said last week that Enel will replace the contractor. The rehabilitation project will likely be commissioned to Enel Power. The overall cost of the ongoing rehabilitation project, which will extend the life of the power station by 15 years, is 600 mln euro. NETC and Energy Company Maritsa Iztok 3 have a 15-year contract for the purchase of the electricity output of the reconstructed facility.
Source: Dnevnik (13.02.2006)

Czech energy company CEZ has been invited to negotiate for the acquisition of the state-owned thermal power plant (TPP) in the coastal city of Varna, news agency Reuters quoted prime minister Sergei Stanishev as saying in Prague. 'The talks were very constructive and I see the possibility (of clinching a deal) to be very realistic,' Reuters quotes Stanishev as telling reporters after meeting CEZ chairman Martin Roman in Prague on Thursday. Roman told Reuters he expected negotiations with Bulgaria to take several weeks. He declined to comment on whether CEZ was prepared to raise its initial offer. 'We believe that we will close a deal,' he said. CEZ bid 285.2 mln euro for the TPP, ranking second in the competition after Russia's RAO. After nearly 6 months of negotiations, the Russian company backed out of the deal, saying it was unhappy with the regulatory and environmental issues outlined in the sale contract. 'We don't have an official decision yet to start talks with CEZ but we will probably have one on Monday," Privatisation Agency executive director Todor Nikolov said. He explained that another, more risky option, would be to call a new sale procedure or to invite to talks Italy's Enel, whose bid was ranked third. CEZ owns 67% stakes in the power distribution companies based in Sofia, Sofia region and Pleven, for which it paid 281.5 mln euro. The Czech company plans to join the liberalised segment of Bulgaria's power market through its unit CEZ Trade which holds a power trading licence.
Source: Dnevnik (17.02.2006)

There will be no alliance between the offers of the Russian Atomstrojexport and Skoda Alliance for NPP Belene, said the Minister of Economy and Energy Mr. Rumen Ovtcharov during his visit in Czech last week. Mr. Ovtcharov also said that such an alliance is not expected at this stage. At the latest stage of the procedure obviously alliance would be possible, even desired. Such a development of the matters is due to the fact that practically the technology, approved for our second NPP, is Russian - water-water reactors or water under pressure.
Source: Pari (20.02.2006)

New furnace under construction in Kremikovtzi Kremikovtzi JSC steel plant starts construction works on a new electric furnace in April. Investments in the project are expected to total USD 30 million. This is a completely innovative technology which has been implemented only at the Mumbay plant of Ispat Industries, Vilas Jamnis, the new executive director of Kremikovtzi said. The Indian company acquired 71% in Kremikovtzi in the summer of 2005. The Indian owner appointed a completely new management board to the company as of yesterday. Former executive director Alok Gupta resigned for personal reasons. The new capacity is expected to double the output and reduce the cost value of the end product, Jamnis added. The new furnace will be built in twelve months. The installation of a new Japanese quality system has already started at four of the Kremikovtzi plants. The system is expected to reduce significantly flaws to the end product, the company said. Kremikovtzi will produce 1.5 million tonnes of steel in 2006 under the form of hot-rolled coils. The output is expected to reach 2.0 million t, Jamnis said.
Source: Pari (21.02.2006)

All debts of Kremikovtzi JSC will be paid in the nearest future, yesterday said the new executive officer of the company Mr. Vilas Jamnis. The Holding Global Steel that bought Finmetals Holding JSC and owns 71 per cent of the metallurgical giant will pay to all creditors proved their taking in the court, and to the others it will offer buy back of the debts, explained Mr. Jamnis. From yesterday Kremikovtzi has renovated and extended managing Board. Mr. Vilas Jamnis that replaced Mr. Alok Gupta as Director of the company, has been member of the Managing Board. Mr. Maurizio Roza will be sales manager. Eng. Dimitur Kuzmanov will negotiate the arrangement of accounts and arguments. We are negotiating with but still have no agreements with Bulgarian State Railways, National Electricity Transmission Company and Bulgargaz, which are some of the biggest creditors of Kremikovtzi, reported Mr. Kuzmanov.
Source: Sega (21.02.2006)

The Privatization Agency invited CEZ to negotiate for the Varna Thermal Power Plant (TPP). With its bid of 192,044,361.44 euro for 100% of the TPP the company ranked second in the tender. The term for signing the privatization contract is 60 days. More than a month ago the Russian firm RAO UES, which ranked first, gave up the deal.
Source: Standart (23.02.2006)

Another four companies asked the State Commission for Energy and Water Regulation to issue them licenses for trade in electricity. The applicants are two subsidiaries of the Germany-based E.ON – E.ON Sales and Trading Bulgaria, and E.ON Bulgaria Trading, the local Enemona Utilities, and the Sofia-registered Energy Partners – company of the Energy Holding – Romania’s structure. After being registered as traders the companies would be allowed to buy at free prices from the electricity plants and to sell it (as well at unadjusted prices) to the privileged consumers in the country. The export and import of electricity is currently monopolized by National Electricity Company (NEK).
Source: Capital (25.02.2006)

Standard&Poor's Ratings Services said it has revised its outlook on Bulgaria-based electric utility National Electricity Transmission Company SPJSC (NETC) to developing from stable. At the same time, Standard & Poor's affirmed its 'BB' long-term corporate credit rating on NETC. The outlook revision is due to the uncertainty over the planned restructuring of NETC. The outcome of the proposed restructuring, which is planned ahead of Bulgaria's entry into the EU, is unclear at this point in time, and could lead to either positive or negative implications for the company's credit quality, said S&P. 'We view the transmission and system operations as the strongest business, and it could potentially earn a higher rating than the current rating on NETC,' said Standard & Poor's credit analyst Magnus Pettersson. 'On the other hand, the rating could be lowered if NEK were to take more risks in the Belene nuclear power plant or venture into other market-exposed electricity generation and supply operations.'
Source: Dnevnik (27.02.2006)

National Electricity Transmission Company (NETC) entered the Top 101 giant companies in Europe, published by the Slovenian newspaper Finance. The rating includes companies of 13 countries. For each of them the 25 biggest companies are analyzed. The analysis is detailed only for the companies that have entered the Top 101.
Source: Sega (02.03.2006)

Pair of producers seek to hike electricity prices over expensive coal Citing a jump in coal prices, thermal power plants (TPPs) Maritsa Iztok 2 and Bobov Dol have demanded a tariff hike for the electricity they sell to the national power grid operator NETC, the State Energy and Water Regulatory Commission said on Monday, March 6. The 2 TPPs have submitted their requests with the regulator. A working group will come up with a decision within 3 months. There will be no revision of the tariff for the time being as it would affect end-consumer prices, the regulator commented. The new prices may be introduced in April for TPP Bobov Dol, which is undergoing privatisation, and in the summer for Maritsa Iztok 2. Approached for comment Vladimir Vladimirov, executive director of TPP Bobov Dol, would not quote the size of the requested increase. Experts estimated that the power generated by the TPP will go up by 10-12%. Maritsa Iztok 2 executive director Atanas Dmitrov refused to comment. The TPP said the price of coal extracted by the Maritsa Iztok mining company had gone up by 5% since the beginning of the year. Currently TPP Maritsa Iztok 2 sells power to the licensed electricity trader EFT Bulgaria and KCM S.A. (Combine for Non-ferrous Metals) in Plovdiv. The State Commission for Energy and Water Regulation fixed a quota of 850 million kWh that the power plant may sell on the free market by July this year. Last year the TPP was selling to the Maritsa Iztok mines, Polimeri – Devnia, KCM – Plovdiv, EFT Bulgaria, Stomana Industry and Agropolychim – Devnia. The restraint of the company’s participation on the market was prompted by the stopping of the plant’s first two units for rehabilitation by Japan’s Mitsui. In 2005 TPP Maritsa Iztok 2 produced 6.4 billion kWh of electricity or 94 percent of the plan. The company reported pretax profit of over BGN 20 million for 2005.
Source: Dnevnik (07.03.2006)

A three-member panel of Bulgaria's Supreme Administrative Court revoked the decision of the Privatisation Agency (PA) ex CEO to terminate the procedure for the Bobov dol thermal power plant (TPP). The complaint of Greece's Public Power Company (PPC) is grounded, the court said. PPC offered EUR 70.917 million for the plant and the price was the main criterion in the tender. Ernst & Young Bulgaria's evaluation of 100% of the Bobov dol TPP ranges between BGN 32.743 million and BGN 152.697 million. The market value is between BGN 130 and BGN 607 per share and the assessment was approved by the PA executive board. PPC's offer makes EUR 282.09 per share, which is close to the maximum price. The court also decided that PPC's offer gives enough guarantees for use of local coal as fuel for the plant, as envisaged in the tender documentation.
Source: Pari (15.03.2006)

If the new instruments for the EU financial framework are introduced, Bulgaria could demand additional funds for the closure of Kozloduy Nuclear Power Plant (NPP), said Lidia Shouleva, Bulgarian MP and observer at the European Parliament. The new regulations include a so called "review clause". Having in mind the pace at which the absorption of the European funds is realized we could demand more money for the closure of the Kozloduy NPP, Shouleva explained. The National Electricity Distribution Company said that 207 experts were taking part in the assessment of the offers about Belene NPP. The Russian Atomstroyexport and the Czech Skoda Aliance have submitted their documents for the tender.
Source: Standart (16.03.2006)

The Enel/RWE consortium will rehabilitate units 1, 3 and 4 of lignite-fired thermal power plant Maritsa Iztok 3, in Southern Bulgaria, replacing the current contractor DSD Dillinger Stahlbau GmbH, Energy Company Maritsa Iztok 3 said after reaching an agreement with the German company to pull out of the project. DSD Dillinger Stahlbau GmbH will continue to be in charge of the retrofitting of the first of two sulphur dioxide removal installation. Enel/RWE will complete the assembly of the other one. Energy Company Maritsa Iztok 3 is co-owned by Dutch-registered Maritsa Iztok Power Holdings with 73% and Bulgaria's national power grid operator NETC. Italian gas and water utility Enel holds 60% of Maritsa Iztok 3 Power Holdings, the remainder is controlled by Entergy of the U.S. Enel is in talks to buy out the stake held by Entergy. The replacement of the contract was prompted by the 18-month delay of the rehabilitation project and aims to avoid further disruptions of the schedule. The deadline for the rehabilitation has been pushed back from 2006 to 2008. The new timetable has been approved by the shareholders and creditors of Energy Company Maritsa Iztok 3. The overall cost of the ongoing rehabilitation project, which will extend the life of the power station by 15 years, is 600 mln euro. A total of 340 mln euro have been absorbed so far. NETC and Energy Company Maritsa Iztok 3 have a 15-year contract for the purchase of the electricity output of the reconstructed facility.
Source: Dnevnik (20.03.2006)

The Czech CEZ company will pay additional 54 million euro for the Varna Thermal Power Plant (TPP). The improvement of the bid has been negotiated with the Privatization Agency, sources from the agency released. CEZ has raised the price by 14 million euro thus increasing it from 192 million to 206 million euro for 100% of the TPP's shares. The future owner will make extra investments of 40 million euro, which will be included in an investment fund for realization of projects in the energy sector. The memorandum about the establishment of the fund will be concluded between Economy and Energy Minister Rumen Ovcharov and CEZ and will be signed along with the privatization contract. This was the last agreement in the course of negotiations between the Privatization Agency and the Czech company. After putting the finishing touches to the document for the TPP's sale, it will be signed. CEZ ranked second in the bid for the privatization of Varna TPP. The winner, Russian RAO UES, gave up the deal after 9-month negotiations which failed because the bidder insisted on the increase of the electricity prices paid by the National Power Distribution Company for the installed capacities. They insisted on the nullification of the contract with Siemens for modernization of the TPP's units. Later on it became clear that this contract had not been terminated. Yesterday, CEZ reported its financial results for 2005 which showed that its profit increased by 47% thus reaching 1.16 billion dollars.
Source: Standart (22.03.2006)

The state doesn't give up control over Belene NPP The State will have a majority stake in the future nuclear power plant in Belene (at the Danube River.) The discussion is underway about the establishment of a venture within the National Electric Company, in which the State will be the major shareholder. It will be responsible for the construction and running of the future nuke, said Deputy Minister of Economy and Energy Ivanka Dilovska at a roundtable "Power Engineering in Bulgaria - Where to Now?" So far, different options have been discussed as to how the State and the private companies can become the investors and operators of the "second nuke." Kommerzbank of Germany has already declared its interest in financing the project, while the Italian Enel stated it was interested in exploitation of the future NPP. Experts of CEZ (Czech Republic) told in their turn they would wait till the State takes decision as to whether it wants to hold the majority share. Then they will make up their mind how exactly to participate in the project. Currently experts are discussing the offers concerning the construction technology of Belene NPP to be applied further on. Russian Atomstroy, and Skoda Alliance Consortium, in which CEZ is a partner, have made their offers. The first stage of the valuation will be completed by June, the final decisions will most probably be taken by end-year. Bulgaria will focus its investment activity in power engineering on Nabucco gas pipeline as well as the transit gas pipelines Bourgas-Vlore and Bourgas-Alexandroupolis, Dilovska said further.
Source: Standart (22.03.2006)

A special company may be set up within the frame of Bulgaria's National Electric Company (NEK), with majority state interest, to build and operate the Belene nuclear power plant (NPP). This emerged from a report of deputy minister of economy and energy Ivanka Dilovska, which was presented at a round table Tuesday. The state is envisaged to contribute units 5 and 6 of the Kozloduy NPP and the ready infrastructure at Belene to the new company's capital. It is not yet clear whether the state will assume any guarantees. The ownership structure of Bulgaria's second N-plant is yet to be decided on. The project is assessed at between EUR 2 and 4 billion. The cost price of the power to be generated there should not exceed 3.5 eurocents per mW. Offers for construction of the plant were submitted by Russia's Atomstroyexport and Czech Skoda Alliance. Both consortiums propose to provide financing for the project. Other companies have also voiced interest in financing the construction.
Source: Pari (22.03.2006)

Bulgaria will provide a 300 mln euro guarantee for the loans that will be received from Euroatom and EIB for the construction of the Bulgarian nuclear power plant (NPP) at Belene, on the Danube, Dnevnik learned from energy minister Rumen Ovcharov. The guarantee is a political move aiming to secure EU's backing for the project, said Ovcharov. Previously, the Bulgarian government insisted that the project will involve no state guarantees or long-term electricity purchase deals. The state guarantees will enhance the risk for the investors, said Georgi Angelov from the Institute for Market Economics. In his view, the government is unnerving the investors with its brinkmanship on the structure of the company that will implement the Belene project. The future investment vehicle that will be created to build the Belene NPP will be 51%-owned by the Bulgarian government which will contribute the Belene site to its assets, said Ovcharov. The strategic investor will control the residual equity. Italian water and gas utility Enel, Czech utility company CEZ, Germany's E.ON as well as Russian and Belgian companies are interested in becoming strategic investors in Belene, said the energy minister. The new company will have no obligations regarding the repayment of the credits for the modernisation of units 5 and 6 of the Kozloduy NPP. The criteria for the selection of the investors will be drafted by financial consultant Deloitte&Touche. The strategic investor should be picked on a competitive basis, recommended Angelov. Sources from national power grid operator NETC said that the company could launch the Belene project on its own. The Belene project was suspended in the early 1990s due to cost overruns and environmental concerns. By the time the building of the 1,000MW Soviet-designed plant was put on hold, some 40% of construction works worth $1.0 bln had already been finished, including the delivery of a Skoda reactor. The estimated cost of completing the plant is seen anywhere between 1.5 and 4 bln euro. Czech consortium Skoda Alliance and Russia's AtomStroyExport have filed offers to complete the Belene NPP. NETC is currently reviewing the two bids.
Source: Dnevnik (23.03.2006)

US company AES will commence construction works on a 670 mW replacing capacity at Maritsa Iztok 1 thermal power plant (TPP) in the first half of April 2006, Bulgaria's deputy economy and energy minister Yordan Dimov said in Stara Zagora. Investments in the project are expected to total USD 1.1 billion. A total of USD 790 million of the funding has been extended by several large-scale European banks, including EBRD, Calyon, BNP Paribas and ING Bank. The project dates back to 1998 and the replacing capacity was supposed to become operational at the end of 2006. This will be the only newly-built capacity in Bulgaria after the decommissioning of units 3 and 4 of the Kozloduy nuclear power plant, Dimov said. He also expressed concerns on the 18-month delay in the implementation of the projects for the rehabilitation of Maritsa-Iztok 3 and the modernisation of Maritsa-Iztok 2 TPP, which might pose a threat to the stability of Bulgaria's energy system. The National Electric Company (NEK) will not export electricity over the next two years, according to Dimov.
Source: Pari (27.03.2006)

Bulgarian company Trans Euroenergy has applied to be issued a 10-year permit to operate as an electricity trader. The application will be reviewed by the Bulgarian power regulator today. Trans Euroenergy will target consumers of low- and mid-voltage electricity which will become eligible to buy power directly from producers when Bulgaria further deregulates the domestic market in July. Trans Euroenergy is 49%-owned by Orion 5K. The remaining equity is held by Kobela which, in turn is 55%-owned by VATO 2002. Local businessman Vasil Bozhkov owned 65% of VATO 2002 until 2002. At the moment, VATO 2002 is 95%-owned by Milena Urdeva, a member of the management of Riel 99, a company believed to have links with Bozhkov. Vasil Bozhkov has no relations with Trans Euroenergy, said Irina Tencheva, the PRO of Nove Holding. Bozhkov serves as president of the holding company. 'However, at this point I am unable to say if Mr.Bozhkov is involved in any way in energy trade,' said Tencheva. Bulgaria has so far awarded electricity trader licences to EFT Bulgaria, Albus, CEZ Trade, Enemona, Energy Partners, PCC and E.ON Trading.
Source: Dnevnik (28.03.2006)

An increase of approximately 7% in the price of the electricity, generated at Bulgaria's Bobovdol thermal power plant (TPP) and sold to the National Electric Company (NEK), was discussed at yesterday's open sitting of the State Commission for Energy and Water Regulation (SCEWR). The price revision is proposed by the TPP and is grounded on the fact that the price of coal, purchased by the TPP from local mines, has increased by as much as 15% in 2006. NEK pays Bobovdol TPP BGN 48.56 per mW (VAT excluded) at present. Should the proposed increase be approved, the price of electricity will reach BGN 56.68 per mW, according to the SCEWR. Bobovdol will be producing the most expensive electricity in Bulgaria, if the price revision is approved, Vladimir Vladimirov, executive director of the TPP said. The TPP purchases the coals from 11 different mines, whose production and price offers differ from the contracts that had been signed and have already come into effect, Vladimirov added. Bobovdol should be compensated for the increase in the coal prices, the SCEWR said. We cannot afford to aggravate the condition of the TPP as it is in the process of privatisation, SCEWR chairman Konstantin Shushulov said. NEK also will have to increase the price of the electricity sold to electricity distribution companies, Damian Hristov of NEK said. NEK's electricity purchase costs will go up by BGN 18 million, if the increase proposed by the TPP comes into effect, Hristov added.
Source: Pari (29.03.2006)

Electricity price shock comes in 2007 When the third and the fourth power units of the NPP Kozloduy are shut down in 2007, the price of electricity will go up by 30%, said Mardik Papazyan, CEO of the National Electrical Company (NEC). "At present, the price of electricity in Bulgaria is 0.174 lev/kWh (EUR 0.088) daytime and 0.093 lev/kWh nighttime. Presently, NEC sells electricity at a loss to the transmission companies, so as to curb the galloping prices. The losses on the home market are compensated by the profit from the export of electricity. The next year, however, the export rates will go down by eighty percent, so we will have to set higher prices for the electricity we consume at home," Papazyan explained. The prices, however, should be set by the State Energy and Water Regulatory Commission.
Source: Standart (30.03.2006)

The National Railway Infrastructure Company (NRIC) will create a power distribution utility that will buy electricity directly from power grid operator NETC, Dnevnik learned from deputy transport minister Georgi Petarneichev. NRIC will be ready with the paperwork for the creation of the new company by the end of the month. If NRIC is allowed to buy directly from NETC, that would pare the monthly electricity bills by 12 mln levs, said Petarneichev. The savings made that way could be invested in upgrading the rail tracks to accommodate faster trains, said the official. NRIC intends to apply for a power trader licence which will allow it to sell electricity to private railway carriers. It is not yet clear form a legal point of view if the new company should apply for a power transmission licence. Only energy companies are eligible for such licence. Sources from the power regulator said that the problem with the participation of infrastructure companies in the electricity market should be solved with changes to the Energy Act.
Source: Dnevnik (05.04.2006)

Kremikovtzi sells EUR 300 mln bond Kremikovtzi will sell bonds for EUR 300 mln to pay its creditors, the general meeting of the shareholders decided on Thursday. Law Debenture Trust Corporation is the trustee for the issue and Merrill Lynch will place the bonds. The bulk of the loan will repay the debts of the metal plant to State Receivables Collection Agency, National Electricity Transmission Company (NETC) and Bulgargaz, and the rest of the money will be invested. The former owner and director of the company Mr. Valentin Zahariev was dismissed as member of the Supervisory Board. The state representative Mr. Ivan Mihaylov was replaced by Mr. Atanas Bogdanov, also former director of the company.
Source: Standart (07.04.2006)

BGN 50 000 bid for HPS Iakoruda, announced Privatization Agency. The step is BGN 5 000 and the participation deposit is BGN 15 000. The price of the trade documents is BGN 500.
Source: Standart (11.04.2006)

Russians Answer 800 Questions about Belene Experts of Atomstroyexport think over the answers to 800 questions concerning the construction of the second nuke in Bulgaria. The aim is to specify the details of the Russian company’s offer. The replies are expected in the National Electric Company (NEC) by April 14, after which the negotiations will start. In June, NEC will announce the winner in the international tender for chief executor of Belene nuclear power plant project, said Vladimir Parygin, head of the Atomstroyexport construction directorate for the building of the new NPP. The company is one of the firms that take part in the bid for the construction of Belene. The second participant is the Czech Skoda consortium. The bid for Belene is the third one in which Atomstroyexport participates after the ones in Finland and China. The Russian government is ready to immediately provide a state credit from Gazprombank covering the sum the Russian party participates with. According to Parygin, the cooperation between Atomstroyexport and Skoda Alliance in the process of construction of Belene NPP is possible.
Source: Standart (12.04.2006)

Russia's AtomStroyExport, in the frame to build the Bulgarian nuclear power plant (NPP) at Belene, on the Danube, is considering teaming up for the project with the other candidate contractor, Czech consortium Skoda Alliance, if the Bulgarian government decides to complete the facility using the equipment already assembled on site in the early 1990s, Dnevnik learned from Vladimir Porigin, chief of NPP construction works abroad at AtomStroyExport. The procedure for the selection of contractor allows tie-in between rival bidders. AtomStroyExport expects Bulgaria's national power grid operator NETC to pick a contractor by early June. The Bulgarian government has decided to build two 1000MW reactors in Belene at a cost of between 2 bln and 4 bln euro. NETC expects the first reactor to become operational in 2012. Some 20 Bulgarian companies have notified to AtomStroyExport their interest in become subcontractors on the Belene project, said Porigin. The company will audit the candidates before make a selection. Gazprombank, the bank of Russian state-controlled gas monopoly Gazprom, will act as a strategic investor on behalf of the Russia side. The financing for the construction of the Belene NPP will be guaranteed by the Russian government. Bulgarian energy minister Rumen Ovcharov recently said Bulgaria will provide a 300 mln euro guarantee for the loans that will be received from Euroatom and EIB for the Belene NPP. The guarantee is a political move aiming to secure EU's backing for the project, said Ovcharov. The Belene project was suspended in the early 1990s due to cost overruns and environmental concerns. By the time the building of the 1,000MW Soviet-designed plant was put on hold, some 40% of construction works worth $1.0 bln had already been finished, including the delivery of a Skoda reactor.
Source: Dnevnik (12.04.2006)

Bulgaria's National Electric Company (NEK) will be split into two companies, the board of directors decided at a meeting Tuesday. A new company will be set up, fully owned by NEK, to operate the electrical system and serve as administrator of the balancing market. The current company will keep the whole transmission network and the hydro power plants, while the new structure will maintain the network and trade electricity. The approved restructuring model will be submitted for approval by the minister of economy and energy, Rumen Ovcharov. Amendments to the Energy Act will also have to be made.
Source: Pari (12.04.2006)

The electricity of Belene will cost up to 4 eurocents Up to 4 eurocents will cost the electric power produced by the future Nuclear Power Plant Belene, announced Mr. Ruben Topchian, deputy executive officer of Atomenergoproekt. The limit of 4 eurocents had been set by NETC in the terms for the participants in the announced in May 2005 international contest for executive of NPP Belene. This makes the electric power of the future NPP one of the most competitive in Bulgaria. In long term it is most advantageous for Bulgaria to accept the offer of Atomenergostroy for the construction of two modern megawatt reactors Â-466Á.
Source: Standart (13.04.2006)

Alcatel will build 60 telecommunication networks in Bulgaria. The French company won an order by the National Electricity Transmission Company (NETC) for installation of the networks in 60 of its operation departments in the country. The installation will be done in 3 stages and is expected to end by March 2007. The financial conditions of the deal were not revealed.
Source: Standart (13.04.2006)

Russia's AtomStroyExport has proposed to install reactors of the VVER 466B type at Bulgarian nuclear power plant (NPP) at Belene, on the Danube. The VVER 466B reactors, to begin operation at the Kudan Kulam NPP in India and Chinese NPP Tianwan, are one of the options for the completion of the Belene NPP offered by the Russian company. VVER 466B are designed to operate for 60 years but not a single reactor of that type has become operational yet. Czech consortium Skoda Alliance, which is the other candidate to build the Bulgarian NPP, has fastened on the fact that its Russian rival is marketing a reactor that is still in the process of development. AtomStroyExport estimates that the choice of VVER 466B will allow to complete the Belene power station in 5 years. AtomStroyExport has also proposed to complete the facility using the equipment already assembled on site in the early 1990s. That option could be completed in 4 years. The Russian company confirmed it was ready to team up with Skoda Alliance if the Bulgarian government decides to utilise the assembled hardware. The AtomStroyExport offer complies with the requirement posited by Bulgaria's national power grid operator NETC that the price of the electricity otput of the new NPP not exceed 0.04 euro cents/kWh. If AtomStroyExport is tapped to build the Belene NPP, the Russian government will extend a loan for the project with the participation of Gazprombank, the bank of Russian state-controlled gas monopoly Gazprom. Some 20 Bulgarian companies have notified to AtomStroyExport their interest in become subcontractors on the Belene project, including Enemona, Energokonsult, Risk Engineering, Interservice and Energoremont Holding. The Russian company said it will audited the candidates before making a selection. The Belene project was suspended in the early 1990s due to cost overruns and environmental concerns. By the time the building of the 1,000MW Soviet-designed plant was put on hold, some 40% of construction works worth $1.0 bln had already been finished, including the delivery of a Skoda reactor.
Source: Dnevnik (13.04.2006)

The contract for the sale of the Varna Thermal Power Plant (TPP) was signed in the Privatization Agency (PA) yesterday. The document was signed by head of PA Todor Nikolov and Sarka Halfarova representing CEZ. Several months ago the Russian company United Energy Systems gave up the deal. The Czech firm will pay 206 million euro in compensatory vouchers for 100% of the TPP. The contract is yet to be approved by the Supervisory Board.
Source: Standart (14.04.2006)

The corporate structure of national power grid operator NETC will be transformed by the end of the year into a parent company, a subsidiary system operator, 4 branches and 2 enterprises - Dams and Cascades and Trafoinvest, the management of the utility decided. The parent company will retain the licences for public supplier, for the production of hydro energy and for electricity trade and transmission. The company will continue to operate the power grid under a power grid management contract with NETC but will have no ownership rights over the network. The holding company will own assets worth several billion levs, including the hydro power clusters Rila, Rodopi and Chaira. Experts said the selected restructuring model was the easiest way to go and that it will not ensure the modern management of the company because of the lack of efficiency incentives and commercialisation. The accounting and legal demerger of the system operator and the electricity supplier is required by an EU directive. NETC has already introduced separate accounting. The reshuffle of the company will be completed when parliament approves the relevant changes to the Energy Act.
Source: Dnevnik (18.04.2006)

In January 2007 the Nuclear Power Plant Kozloduy will stop the export of electricity to Greece, Turkey, Serbia, Macedonia and Albania, Mr. Ivan Ivanov, executive director of the company, said yesterday. He stressed that at the moment the NPP provides 41.6 percent of the power supply in Bulgaria, but the cease of electricity export will be prompted by the decommissioning of units 3 and 4 of the NPP at the end of 2006, as agreed with the EU. In January 2006 the NPP produced 2.177 bln kWh of electricity. Last year the National Electricity Transmission Company exported 6.5 bln kWh, which is a record for the past 10 years.
Source: Monitor (18.04.2006)

Bulgaria's National Electric Company (NEK) will be split into two entities, CEO Lyubomir Velkov said. The parent company NEK will continue to function as a public supplier, water power producer and trader. The other entity will be wholly-owned by NEK and will work as an electricity system operator. It will maintain and operate the transmission networks for payment under a contract with NEK. The change is prompted by the requirements of the European directives for equal access to the electricity transmission networks and has to be completed by January 1, 2007 at the latest. The restructuring will not affect the quality of suppliers but will raise prices. The tariff revision will also be necessitated by the higher prices requested by thermal power plants (TPP), Velkov said. The closure of units 3 and 4 of the Kozloduy nuclear power plant the importance of TPPs will increase, while NEK will have fewer possibilities for compensation, as exports will decline rapidly.
Source: Pari (19.04.2006)

The Cabinet decided to create a separate firm under the jurisdiction of the National Electric Company (NEC) which would deal with the construction of Belene nuclear power plant (NPP). All the assets of the site of Belene will enter it as a contributed property. The winner in the contest for executor will be known within two months. According to Academician Evgenii Velikhov, secretary of the Russian Social Chamber and head of the Kurchatovsk Institute research center, the results of the bid will depend on political factors, as well.
Source: Standart (21.04.2006)

The Bulgarian government decided on Thursday that the new branch Belene established within the corporate structure of national power grid operator NETC will build Bulgaria's second nuclear power plant (NPP) at Belene, on the Danube. The project contractor will be named in June, said NETC executive director Lyubomir Velkov. The construction of the administration and utility buildings that will accommodate the staff of engineers and construction workers will begin in June, Belene branch chief Vasil Pandov told local radio station Darik. The project is apparently being rushed despite a number of uncertainties overhanging key aspects of its implementation. The government has decided that the Belene branch will start the construction on its own. A separate company will be registered after a suitable strategic investor is found. Energy minister Rumen Ovcharov said the government will contribute the Belene site to the assets of the new company. NETC will invite next week Russia's AtomStroyExport and Skoda Alliance to discuss their offers for the design, construction and launch of the new NPP. It is still not clear how the project will be packaged financially and if it will enjoy state guarantees. NETC executive director Mardik Papazyan claims that the grid operator could borrow the necessary financing. The NETC management suspects that the selection of the project contractor and equipment vendor could take a while and that is why they prefer to start the implementation of the project on their own. The 2 candidates to build the power station have also made financing suggestions. According to Ovcharov, it will be important to enlist the support for the project of EIB and Euroatom. According to the Russian media, Gazprombank, a key player in both candidate consortia, will co-own the Belene NPP. The Russian government will extend a loan for the project with the participation of Gazprombank, the bank of Russian state-controlled gas monopoly Gazprom, Vladimir Parigin from AtomStroyExport said last week. Miroslav Fiala, director general of Skoda GS, part of Skoda Alliance, said at the presentation of the their offer that the consortium is ready to offer financing for up to 100% of the project costs. In related news, it emerged that 3 German environmental organisations have launched a campaign aimed at discouraging business support for the construction of the Bulgarian NPP. The environmental organisations, who claim that the Belene project is an eco hazard, have information that Deutsche Bank, HypeVereinsbank and Commerzbank are marketing credits to the consortium led by Russia's AtomStroyExport which is in the frame to build the Bulgarian NPP.
Source: Dnevnik (21.04.2006)

Today the Austrian companies VA TECH HYDRO and Porr Technobau und Umwelt AG will sign the contracts for the modernization of the three hydroelectric plants of the hydropower cascade Dolna Arda (HPP Ivaylovgrad, HPP Kardjali and HPP Studen Kladenets), the National Electric Company (NEK) said. The project for the modernization of the three hydroelectric plants is worth EUR 70 mln. Bulgaria’s Minister of Economy and Energy Mr. Rumen Ovcharov and Austria’s state secretary of the Ministry of Transport Mr. Edward Mainoni will attend the signing of the contracts. Together with another Austrian company – Alpine Mayreder Bau, VA TECH HYDRO is also executor of the Tsankov Kamak project, which costs EUR 120 mln.
Source: Monitor (25.04.2006)

The price of electricity will go up by an average of BGN 0.01 (EUR 0.005) per kW/h for the citizens of Sofia and Pleven (northern Bulgaria). The Czech company CEZ, which owns the power distribution network in the respective regions, demanded that the price of electricity went up with 6.9% for households from the beginning of October. At the moment the price of electricity during the day is BGN 0.17 per kW/h and BGN 0.09 per kW/h during the night.
Source: Standart (26.04.2006)

Austrian companies VA TECH Hydro and Porr Technobau und Umwelt AG signed Tuesday contracts with national power grid operator NETC for the rehabilitation of the 3 power stations part of the Dolna Arda hydro complex, in Southern Bulgaria. VA TECH Hydro will retool the electric and mechanical installations of the 106MW Kardjali hydropower plant, the 60MW Studen Kladenets hydropower plant and the 103.5MW Ivaylovgrad hydropower plant and will supply electric and mechanical equipment for the expansion of the Studen Kladenets power station. The cost of the rehabilitation project, which should be completed by October 2010, is 49.5 mln euro. Porr Technobau und Umwelt AG will design and implement the expansion of the Studen Kladenets hydropower plant. The cost of the project, which should be completed by December 2008, is 15.9 mln euro. The upgrade will boost the annual output capacity of the power station by 20.8gWh. Talks are underway with 7 Austrian banks but the final number of lenders that will be involved in the project will be smaller than that of the Tsankov Kamak complex, said Alexander Schwab, the VA TECH Hydro senior vice president for marketing management. The 220 mln euro Tsankov Kamak hydro complex is implemented under Austrian-Bulgarian memorandum for understanding and bilateral co-operation to conduct mutual actions on Kyoto Protocol. Oesterreichische Kontrolbank Aktiengellschaft underwrites the political risk while a consortium of Bank Austria Creditanstalt, Fortis Bank SA, Ostererreichische Volksbanken, Raiffeisen Zentralbank Osterreich AG, Societe Generale and Credit Suisse First Boston International will raise the remaining 120 mln euro.
Source: Dnevnik (26.04.2006)

The owners of the Lovech-based furniture maker Welga have built the first wind power station in Pleven district. The mini power station is located in the village of Somovit and has three turbines on one of the hills in the village. The investment amounts to BGN 1.3 mln. The alternative power source feeds the network of the National Electric Company (NEK) with 380-volt electricity.
Source: Monitor (26.04.2006)

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)

Bulgarian company ProWave OOD said the nation's first TETRA network will be operational until June. The first clients of the network are the Kozloduy nuclear power plant, the Sofia International Airport, the Varna airport and the electricity distribution companies operating in Sofia and the Sofia region, said ProWave executive director Krasimir Ganchev. The client base should reach 1,500 by end-June and 10,000 by the end of the year. ProWave plans to spend 30 mln euro on the development of the network in the next 3 years, said Ganchev. Some of the necessary financing will be solicited from banks, including the EBRD and 2 of the biggest banks operating in Bulgaria, and from 2 unnamed U.S. investment funds. EADS and Selex have so far been contracted to supply equipment for ProWave's TETRA network. The network currently covers Sofia and the Sofia region and Kozloduy, on the Danube, and should reach Stara Zagora, Plovdiv and the whole of North-eastern Bulgaria by the end of 2006. ProWave is in talks to plug into the network the Maritsa Iztok coal mining company. Other potential clients include the ministries of interior, defence and disaster and emergency response, the civil defence and national power grid operator NETC. The TETRA network will not compete with the cellular grid operators GloBul, MobilTel and vivatel but will seek to phase out the analogue radio networks.
Source: Dnevnik (28.04.2006)

The management of NPP Kozloduy will bring to court Russia-based company Hydropress, which supplied equipment for the current repairs of the plant's fifth power unit. On March 1, one of the reactor's emergency shutdown systems failed to work and the facility was urgently shut down for ten days, for which period NPP Kozloduy had to pay BGN 2.8 million compensations to the National Electricity Company. "We want the Russian company to pay us these BGN 2.8 million," said Ivan Ivanov, CEO of NPP Kozloduy. Hydropress will also have to pay US $720,000 to NPP Kozloduy, because of the poor quality of the repair works, which cost the NPP US $24 million. Under the signed contract, the warranty totals three percent of the repairs' cost. "In the summer, we will ask Hydropres to give 100-percent guarantee for the repairs it made to the fourth power unit. We will not set the reactor into operation until we are absolutely sure it is safe, even if we will have to introduce power cuts in Bulgaria," Ivanov said.
Source: Standart (04.05.2006)

Kremikovtzi JSC and the government have agreed on the repayment of the smelter’s debts, the Ministry of Economy and Energy announced. Today the parameters of the agreement for repayment of the company’s debts to the state and state-controlled companies will be revealed. Kremikovtzi’s debt to the National Electricity Company only is BGN 95 mln, 90 percent of which are old and overdue debts. A few days ago the shareholders voted for the drawing of a EUR 300 mln credit for the repayment of the debts. However a big part of the money will be given to the owner Global Steel Bulgaria which sells the rights for direct trade in metals with two English companies to Kremikovtzi.
Source: Monitor (05.05.2006)

Bulgarian steel mill Kremikovtzi taps bond proceeds to repay debts Bulgaria's largest steel mill Kremikovtzi, majority owned by Indian steel maker Ispat Industries, has retired outstanding debts of 112.8 mln levs towards the National Social Security Institute, the State Receivables Collection Agency and the tax administration. The debts were repaid from a 325 mln bond placed by the steel works a week ago. Kremikovtzi is now negotiating with NETC and Bulgargaz on the repayment of some 130-140 mln levs it owes to the national power grid operator and the state-controlled gas distributor. In addition to the settlement of outstanding debts, which have been under a lid since early 2006, Kremikovtzi also plans a large-scale investment program. The company will absorb $70 mln in 2006 and $300 mln over the next 5 years. The spend should double annual steel output to 2 mln tons in 2 years with exports seen at $1 bln. The payments made to government agencies and companies has not yet resolved the problem with the injunction imposed on the shares of the majority owner in 2004 in connection with a $50 mln euro claim against the steel mill filed by the Post Privatisation Control Agency. The agency is trying to penalise the company for defaulting on post-privatisation obligations.
Source: Dnevnik (08.05.2006)

Big banks are ready to finance the construction of the Belene nuclear power plant and their interest is still sound, Bulgaria's Minister of Economy and Energy, Roumen Ovcharov stated on Nova TV. Credit Suisse First Boston, Citibank, BNP Paribas are some of the banks willing to pour funds in Belene NPP. Energy companies Enel, E.ON and CEZ are also ready to finance the construction of Belene NPP.
Source: Standart (08.05.2006)

Local wine producers will attack the Russian market with Government delegation that will visit Moscow on May 15 and 16. Representatives of 14 cellars will accompany the Minister of Economy and Energy Mr. Rumen Ovtcharov. He will travel together with the chiefs of Vini-Sliven, Vinzavod-Asenovgrad, Festa Holding, Domaine Boyar, LVK - Targovishte and others. Russia is traditionally the biggest market for the Bulgarian wine. About 60 per cent of our bottled wine and 62 per cent of the broached are exported there. Until now the delegation includes nearly 100 companies and branch organizations but it is expected the number to increase. Overcoming the misbalance in the trade between the two countries is one of the main problems to be discussed. The Bulgarian export for Russia is hardly EUR 200 mln and the trade is EUR 2,2-2,3 bln. Amidst the other themes to be discussed are the new mechanisms for calculation of the transit taxes for the natural gas, the Russian interest in the construction of NPP Belene.
Source: Standart (10.05.2006)

Yesterday the price of HPS Iakoruda was increased 13 times at an auction in Privatization Agency. The bidding won Sofia-based Business BG Group Correct with an offer of BGN 670 000. The initial price was BGN 50 000 and the step – BGN 5. The auction is record also because of the participation – including 24 companies and 3 eliminated due to irregularity in documents.
Source: Standart (12.05.2006)

Natural Gas, AK-47 and MiG are the top agenda in Moscow A strong smell of natural gas could be felt at the negotiations, which kick off in Moscow today. Sofia and the Kremlin will again put on the agenda complicated problems, which they have tried to solve for years now. Will Russia finally admit that Bulgaria produces submachine-gun Arsenal, which has nothing to do with AK-47? When will Moscow pay the rest of its debt to Sofia? Who is going to repair the MiG-29 fighters? The natural gas, which Bulgaria receives from Russia, remains the biggest issue to be discussed. What price of natural gas will Minister of Economy and Energy Roumen Ovcharov manage to negotiate? All Bulgarian citizens want to know the answer of this question, because it has an immediate bearing on the contents of their pockets. The session of the Joint Bulgarian-Russian Commission for Economic, Commercial, Scientific and Technical Cooperation in Moscow will last three days. This time the session will take place against the background of the ongoing tender for the construction of Bulgaria second NPP in Belene. One of the two bidders is Russia-based Atomsroyexport.
Source: Standart (15.05.2006)

Kremikovtzi secured bonds with equipment from the new plant The metallurgical company Kremikovtzi lodged machines and equipment from its new plant for continuous steel casting as provision for its debenture loan of EUR 325 mln. The mortgage of the company is already written in the registered pledges of the Ministry of Justice. The company has already taken part of the debenture loan and has paid off all its debts and taxes, duties and obligatory security payments, which amounted to BGN 113 mln. After the repayment the State Receivables Collection Agency canceled the distraint of the bank accounts, motor vehicles, movable property and real estate of the company. Two weeks ago the metallurgical plant sold through the Dutch Bulgaria Steel Finance a total of EUR 325 mln of bonds with 7-year maturity and annual rate of 12 per cent. In order to make the bond more attractive, for each purchase of EUR 1 mln Kremikovtzi gave to the investors warrants for 6172 shares of the company. The shares of the major owner of the plant GSHL Bulgaria are blocked so it cannot control them due to a restriction on lawsuit for penalty of EUR 50 mln that should be paid to the Agency for post-privatization control. The equipment in the new plant, pawned as provision for the loan, was delivered by the Austrian company Voest Alpine, one of the leading companies for development of metallurgical technologies. For its launch were invested EUR 3,5 bln, according to preliminary reports. The equipment was started in the summer of 2005, after 10 years of postponing their launch due to lack of money. Kremikovtzi will use the funds raised through bond issuing not only for repayment of debts to companies but also for implementing an investment program. Still active are the debts to Bulgargaz and National Electricity Company (NEK), which are between BGN 130 and 140 mln, but negotiations for repayment are being held. In 2006 Kremikovtzi plans to invest EUR 70 mln, and during the next five years – up to EUR 300 mln for the modernization of the production process, for environment protection and improving the working conditions.
Source: Dnevnik (15.05.2006)

The deputy Minister of Economy and Energy Ms. Ivanka Dilovska yesterday handed her resignation, reported Council of Ministers. The official cause for her resignation is not clear. According to sources of Standart the reason is the disagreement of Ms. Dilovska with the conservative way of the restructuring National Electricity Company (NEK). Ms. Dilovska is member of the Board of NEK.
Source: Standart (17.05.2006)

Bulgaria to Resume Extraction of Uranium Concerned Bulgarian and Russian organizations are to launch a research on the advisability and options for the renewal of extraction of uranium in Bulgaria, reads the Protocol of the 10th Session of the Intergovernmental Bulgarian-Russian Commission, signed by Bulgaria's Minister of Economy and Energy, Roumen Ovcharov and Sergey Naryshkin, Head of Russia's Government Apparatus and Co-chairman of Russian-Bulgarian Intergovernmental Commission. RAO "UES of Russia" and the Bulgarian National Electric Company (NEC) EAD to examine the options for power deliveries from third countries, Bulgarian and Russian experts agreed upon.
Source: Standart (18.05.2006)

Energo-Pro Bulgaria JSC, Bulgaria’s biggest private producer of electric power from HPP, invested EUR 7 mln in the modernization of cascade Sandanska Bistritsa, the company, managed by Mr. Teodor Bobochikov, said. The project for the modernization of the basic equipment in cascade Sandanska Bistritsa started in December 2002. The total costs of the project amounted to some EUR 5.5 mln.
Source: Monitor (19.05.2006)

Italian gas and water utility Enel is interested in joining the selection process for a strategic investor in Bulgaria's Belene nuclear power station and expects Sofia to provide more details on its intentions towards the project, Enel CEO Fulvio Conti was quoted by news agency Bloomberg as saying Sunday, May 21. A Skoda-led Czech tie-in and Russia's AtomStroyExport are vying to build Bulgaria's second nuclear power plant.
Source: Dnevnik (22.05.2006)

The price of electric power from TPP Maritsa-Iztok 3 will not increase the price of electricity, reported the company. The reason is that the electric power from the power plant is being bought by NEC from 2003 on fixed and competitive price by the force of 15-year contract, concluded by the company that will renew the facilities of the plant.
Source: Monitor (25.05.2006)

Big American companies are potential investors in Bulgaria, said Assen Gagauzov, Minister of Regional Development and Public Works. The Americans' interest is attracted by the big infrastructure projects - the construction of the highways, Belene Nuclear Power Plant (NPP) and the two big oil pipelines: Bourgas-Vlora and Bourgas-Alexandroupolis. The cabinet must decide about the financing of the projects for their construction. "We need sums amounting to more than 1 billion euro which will be hard to find without the participation of American firms," Gagauzov explained. "The state will do its best to receive this money," he added.
Source: Standart (26.05.2006)

Metal Pharaohs From July 2001 until March 2006 Water Supply and Sewerage – Sofia has BGN 600 000 losses from stolen metals. The number of stolen shaft covers and bars is 23 418. This statistics sounds boring – it is from the type of information that are automatically written down in “boring” column. However the things seemed completely different the night that when driving in dark your right tyre suddenly goes in a perfectly rectangular hole, deep enough to take BGN 300 to 500 for repairs. The problem with stolen metals for scrap is among those everlasting problems that each Government decides to solve in its own way. The case with the current Government won’t be different. According to Mr. Valeri Nakev, director of Licensing and control of trade in metal scrap department in the Ministry of Economy and Energy, over the next two months is expected a new course of changes in the legislation for metal trade. The aim is to tighten the rules by increasing the hypotheses according to which a dealer in scrap may lose his license. The changes came after one more series of complaints from the big infrastructure companies of the increasing thefts. The victims are mainly the National Company Railway Infrastructure (NRIC), Bulgarian State Railways (BDZ), water supply and sewerage companies, National Electricity Company (NEK) and Bulgarian Telecommunication Company (BTC). The basic stimulus for increasing of the metal thefts is probably the jump of the international metal prices during the last few months, which inevitably affected the demand and the purchase prices of scrap in Bulgaria. In many cases the missing stolen metal constructions may lead to dangerous situation. According to National Company Railway Infrastructure (NRIC) almost every night on the railway Ilientzi – Karlovo people steal cables, supplying the security system of the line, thus the signals stop working and there is risk of accidents. The reasons for the thefts are three, claim the experts from the state as well as from the branch structures. First: increase of the scrap prices and of the demand. Second: lack of effective control on the business. And third: the companies-victims do not protect their property well. The reaction of the state institutions is “tightening the regime” for the trade in the problem goods – in this case scrap. This is exactly what they would do now. However whether the measures would be effective or not is another question. According to Mr. Valeri Nakev a great number of companies (some hundreds) continue to exist now in the white sector and then in the gray one. According to data from the Economic Ministry until year 2000 the licensed scrap companies were a little more than 1000. Then in 2000 the requirements for documents were increased and thus the companies reached down 240. However the thefts did not decreased. Mr. Petar Zhotev who was a Prime Minister in 2001 brought some new temporary limitations over scrap trade for a few months and later on lightened the regulations for obtaining a license and reduced the number of documents needed from 27 to 7. In t his way the number of companies in this area increased and reached almost 1000 until 2003 when another license was introduced because of the new Waste Management Act. As a result nowadays the number of companies in this sector is about 600. Mr. Mladen Mladenov, a chairman of the Bulgarian branch chamber Phoenix Resource, considers that so many requirements for the companies push them to the gray market and now only 60 – 70 per cent of them have licenses. All this actions did not seem to reflect much on trade with stolen scrap. The main reason for that according to the economic experts and experts of branch organizations altogether is the lack of effective control over the companies. The Ministry of Economic Affairs, local mayors and Executive Environmental Agencies throughout the country has the right to inspect the market points for trading scrap. Because of the fact that there is not only one institution to supervise this, there seems to be no positive effect at all. “It is obvious that there is a lack of coordination between the different authorities. This is why, for example, people steal scrap in Haskovo and later on trade it in Plovdiv leaving no traces behind”, added Mr. Mladenov. The other paradox is that every authority is trying to supervise only companies that are actually registered with them. The list of registered companies very often is different in the databases of the different authorities and this leads to greater misinformation. Ms. Politimi Paunova chairman of the Branch Chamber of Ferrous and Non-ferrous Metallurgy said that every company has at least a few points for buying scrap. There are over 15 000 points like this throughout Bulgaria. She considers that the biggest problem is the lack of responsibility by the business and the regional authorities and the current code of law does not encourage such responsibility. After a mayor administers a license for a scrap trade point later on he/she never checks on it because he/she does not get any benefit out of it. Based on an information received by the Ministry of Economy there are 20 licenses for trade with scrap that has already been terminated and there are appeals against this decisions in the Supreme Court. This appeals last for many years. That is why there are only 12 decisions confirmed by the Supreme Court so far. In 2002 the code of law was changed, concerning malpractice with scrap, announcing it as not incriminating. Since then there are more than 200 registered cases of malpractice with scrap but nobody is found guilty, said Mr. Valeri Nakev. Right now we do not have a well-determined scheme of how to control trade of scrap but a scheme of how to split the responsibilities between as many parties as possible and this way we encourage corruption, adds Ms. Politimi Paunova. According to the branch organizations with our admission in the European Union the opportunities for illicit profits in this business will grow up. Currently companies dealing with scrap do not have to pay VAT. In every European Union country – member, the level of VAT on scrap is determined individually and Bulgaria has decided to set the maximum possible 20 per cent, said Mr. Mladen Mladenov. In his opinion this might be followed by a major draw of VAT “This illegal activities look very tempting to companies in this branch because with a single invoice only VAT for hundreds thousand BGN might be drawn ” he points. According to Ms. Temenoushka Kostova executive director of the Bulgarian Association of Recycling /BAR/ the major reason for the continuing frauds with scrap is because there is a poor regional control over the buy up of scrap. The process of trade with scrap is very complicated, it has a pyramid-like structure. It is interesting that the net price of scrap does not go up, in the upper levels of the pyramid but goes down. On the other hand, clients pay extra bonuses for delivered quantities so this is the way that profit is accumulated, for the firms in the upper levels of the pyramid. For example if 1 kg. of ferrous scrap is paid BGN 0,30 and in the meantime Stomana Industry JSC – Pernik pays BGN 0,25 but offers a bonus for every full loaded train that is delivered. The bigger the quantity the higher the bonus is. It is not other place but the regional level where all links of stolen metals fade away, because over there, rails, wires and covers are being smelted to unrecognizable cast. Most of the smelt-houses remain under cover. Most of the stolen scrap is smelted there but there is not a well-established control over them, said Ms.Temenoushka Kostova. Another way to look for stolen scrap is to check on those smelt-houses that sell metal products, but not to the big metallurgical factories. They are not authorized dealers so they are not subjected to all requirements, as authorized dealers are, said the Bulgarian Association of Recycling. The Association suggests that smelters’ activities have to be accurately determined as it is for the companies trading with scrap and the licenses to be administered only by BAR. It is still too early to say if this is going to happen. After all it is not that important who actually administers the licenses but whom is in charge of controlling them. The imposed fines for violations in scrap trade, have reached the level of BGN 10 000, even though this does not seem to scare too much as malpractice continue.
Source: Capital (26.05.2006)

The National Electricity Company (NEK) loses 3.50 levs at the sale of every megawatt/hour, Liliya Ivanova, Head of "Economy and Finances" department with NEK informed. "The price, approved by the regulatory committee, at which NEK sells power to the power-distribution companies, is 57,43 levs per megawatt/hour, while the company's expenses for a megawatt/hour amount to 61 levs. NEK registered losses of 45 million levs in 2005 as they are expected to reach 60 million levs this year," Ms. Ivanova said further. "The negative balance is being compensated with the increased receipts from export of power," Liliya Ivanova explained.
Source: Standart (30.05.2006)

Bulgaria's national power grid operator NEK is selling electricity to 5 industrial consumers at a price that is 33% lower than the competing offers of the power distribution companies. Peshtera-based drug maker Biovet, cardboard factory Mayr-Melnhof Nikopol, ceramics plant Khan Asparuh, sanitary ware maker Ideal Standard and Targovishte-based Energia are buying their electricity from NEK at 0.061-0.06.3 levs/kWh instead of 0.08 levs/kWh. The 5 industrial customers should expect to pate their energy costs by 2.6 mln levs annually while generating over 1 mln levs in additional revenues for NEK. Khan Asparuh has announced plans to start doing business with licensed electricity trader EFT Bulgaria. Ideal Standard also plans to buy electricity directly from the producers. The sales to clients of the electricity distribution companies contravene neither the Energy Act nor the licence issued to NEK, said Lilia Ivanova, head of the company's economics and finance department. NEK's recent attempts to pluck major customers from the electricity distributors has riled the foreign owners of the companies: Germany's E.ON, Austria's EVN and CEZ of the Czech Republic. The owners of the power distribution companies have warned that they will reciprocate with a hike in household tariffs and the tariffs for small companies. The power distributors are making no investment and just meter consumption unlike NEK, said economy minister Rumen Ovcharov. The opportunity provided to NEK to supply electricity to mid-voltage users will not interfere with the development of the local power market, said Ovcharov.
Source: Dnevnik (30.05.2006)

Biovet JSC, the ceramics factory Khan Asparuh JSC, the company of Mayr-Melnhof-Nikopol JSC, Ideal Standart - Vidima JSC, and Energia-Targovishte JSC, are buying electricity from the National Electricity Company (NEK) SPJSC instead of the electrodistributive companies, announced the head of management Economy and Finances in NEK, Liliya Ivanova.
Source: Dnevnik (30.05.2006)

Bulgaria's national power grid operator NEK posted a 11.7% increase in electricity exports in January-May. Half of the electricity volumes were exported to Greece, some 35% to Serbia with the remainder were bought by Romania and Macedonia. NEK has forecast electricity exports of 7 bln kWh for 2006. More than half of the power export deals were brokered by the 12 traders and go-betweens that do business with NEK. South-eastern Europe is facing a 12 bln kWh shortage due to the outmoded power generation facilities and the loss of export capacity that Bulgaria will experience after the closure of units 3 and 4 of its Kozloduy nuclear power plant, said Mityo Hristozov from NEK. Bulgaria's electricity consumption was secured mainly by the hydro power stations in 2006, said Hristozov. Hydro power output rose 8% last year while thermal power production was up 7%. Domestic power consumption increased by 3.9% in 2005.
Source: Dnevnik (30.05.2006)

Skoda Alliance is able to construct Bulgaria's Belene nuclear power plant (NPP) in 8 years, instead of the initially planned 10, Miroslav Fiala, general director of Skoda JS said. We are ready to show flexibility and to co-operate with our Russian competitor Atomstroyexport, if it is in the interest of the Bulgarian party, Fiala added. No such signal from Bulgaria's National Electric Company (NEK), investor in the project, has come through so far, according to Fiala. Skoda Alliance's project for the Belene NPP is based on the concept of the Temelin NPP in the Czech Republic, representatives of the consortium said yesterday. The nuclear unit has been completely renovated though and boasts a number of improvements compared to the unit offered to be constructed by Atomstroyexport. The main improvements have been made on the safety systems, experts said. Skoda Alliance plans to utilise to a maximum extent the already delivered equipment and the existing infrastructure at the Belene site. This will happen only after a thorough risk assessment, which will be discussed with NEK. The costs for the construction of the Belene NPP will drop, if the existing equipment is used, Jiri Demis member of the board of directors of Skoda JS said. Our offer includes an option for alternative fuel supplies to the NPP, which are not necessarily linked with Russia, Demis added. Skoda Alliance plans to assign more than 30% of the construction works to Bulgarian companies, if the consortium wins the procedure. Talks have already been held with more than 20 Bulgarian companies, representatives of the consortium said. We have no problems with Russia over licensing rights and intellectual property, Miroslav Fiala said.
Source: Pari (01.06.2006)

Bulgaria household power tariffs to remain regulated Bulgaria's State Energy and Water Regulatory Commission (SEWRC) will regulate the electricity tariffs for households and small companies after the domestic power market is opened to competition in 2007, says the bill amending the Energy Act submitted for consideration by the MPs. Household customers will be able to pick a power supplier from July 2007 while industrial consumers will get that option at the beginning of the year. The bill introduces the term 'end-suppliers', a catch-all for the currently existing electricity distribution companies and power traders. The end-suppliers will be authorised to sell electricity to household customers and to industrial consumers with at least 50 staff and annual turnover of up to 19.5 mln levs. According to energy experts, the power distributors will be allowed to buy electricity from independent producers or traders instead of national power grid regulator NEK. The option envisaged in the bill for major industrial consumers plugged into the NEK transmission network to buy electricity from the operator at lower prices ignited a row between NEK and power distributors with the latter arguing that this provision was in breach of their licences. NEK could potentially rake in a turnover of 2 bln levs from this group of consumers. The new bill authorises SEWRC to determine and register the export quotas for traders and producers to ensure the reliability of the energy system. NEK will lose its monopoly over the import and export of electricity at the beginning of 2007, allowing eligible consumers to buy power on the international markets
Source: Dnevnik (06.06.2006)

The Austrian EVN is interested in the privatization of Thermal Electric Power Plant Plovdiv, announced Mr. Stefan Shishkovitz, chairman of the Board of Directors of EVN. The Austrian company owns the electricity distribution companies in Plovdiv and Stara Zagora. According to Mr. Shoshkovitz this would facilitate serving the call center of the company, which would be in Plovdiv.
Source: Monitor (08.06.2006)

Bulgaria's national power grid operator NEK said it will invest 30 mln euro in the construction of a number of substations in areas with spotty voltage along the Southern Black Sea coast, Plovdiv and Varna. The company will borrow half of the necessary cash for the construction of the local area substations in Sozopol, Obzor, Pamorovo and the Sunny Beach resort. NEK executive director Mardik Papazyan said the investment program could also be financed by a Swedish bank under a bilateral agreement for co-operation n the energy sector. The Sozopol and Obzor areas are experiencing serious voltage fluctuations due to the strain on the grid placed by the slew of new hotel openings, said Papazyan. Power and automation technology provider ABB has already been selected to build the substation in Sunny Beach. The private operators of Bulgaria's 7 electricity distribution companies also plan to invest in new substations. Germany's EON, the owners of the power distributors in Varna and Gorna Oryahovitsa, said it will build new facilities n Trakata and Byala, on the Black Sea. CEZ, the Czech owner of the power distributors servicing Sofia, the greater Sofia area and Pleven, said it will build a new substation in ski resort Bansko
Source: Dnevnik (15.06.2006)

Bulgaria's National Electric Company (NEK) is starting the construction of new substations along the Black-Sea coast, executive director Mardik Papazyan said at an international energy forum in Varna. The state-owned company will invest some EUR 30 million in 2006 and 2007 in a programme for accelerated construction of substations in the coastal areas to improve electricity supply there. Due to active tourism in summer the voltage of power at the seaside falls to 150 V, instead of 220 V. Large-scale construction in the coastal resorts also requires more sources of power. Therefore NEK is launching a construction and repair programme that is outside its other investment plans. The existing substation in Golden Sands will be refurbished by the spring of 2007. New substations are planned to be built in Sunny Beach, Obzor and Sozopol, as well as in the mountain resort of Pamporovo, Papazyan said. Under the Energy Act, NEK is obliged to build substations, which are later bought out by the electricity distribution companies. A substation costs between EUR 4 and 5 million.
Source: Pari (16.06.2006)

Bulgaria is in talks with a number of companies and countries for the sales of part of the electricity, which is to be generated by the Belene nuclear power plant (NPP), economy and energy minister Rumen Ovcharov said in an interview for Russian news agency Novosti. Ovcharov, however refused to reveal the names of the countries Bulgaria negotiates with. The outcome of the tender for the construction of the Belene NPP will be clear at the end of July or the beginning of August, Ovcharov said. Russia has all the chances of winning the tender for the construction of Bulgaria's second NPP. Talks on shortening the construction terms are currently being held with the two bidders, Russia's Atomstroyexport and Czech Skoda Alliance.
Source: Pari (16.06.2006)

Italian gas and water utility Enel said it has bought for 47.5 mln euro 40% of the stake held by Entergy of the U.S. in Energiyna Kompaniya Maritsa Iztok 3, the company in charge of the rehabilitation of lignite-fired thermal power plant (TPP) Maritsa Iztok 3, in Southern Bulgaria. Energiyna Kompaniya Maritsa Iztok 3 is co-owned by Dutch-registered Maritsa Iztok Power Holdings with 73% and Bulgaria's national power grid operator NEK. Enel now holds 73% of Maritsa Iztok 3 Power Holdings. The deal strengthens Enel's foothold in Bulgaria where the company intends to figure on the both the power production and energy infrastructure markets, said Enel CEO Fulvio Conti.
Source: Monitor (19.06.2006)

EK, Bulgaria's national power grid operator, and national railway carrier BDZ have announced plans to deploy telecommunication networks to compete with the likes of BTC, the former telecom monopoly. BTC and BDZ will both apply for telecom licences while BDZ intends to pursue a permit for electricity distribution as well. NEK plans to install by the end of 2007 a fibre-optic backbone second only to that of BTC, said the company's executive director Mardik Papazyan. The 2,200 km network, which will provide datacasting, international connectivity and leased lines, will pack 24 optical fibres. NEK already has in place 700 km of the network, mainly in Central Bulgaria. After the NEK's corporate restructuring is finished in late 2006, the company will register a telecom subsidiary, NEK Tel. Telecom experts said NEK was unlikely to be able to reach end-customers. BDZ said their fibre-optic network was conceived back in 1998 but the company was still unsure about the sources of the 150 mln levs in financing needed for the project. The railway carrier has already completed a datapipe linking Sofia and Gyueshevo, on the border with Serbia, and is working on a link between Blagoevgrad and Kulata, on the border with Greece. NEK's fibre-optic network will reshuffle the leased lines market currently accommodating BTC, Bulgargaz unit Bulgargaztel and cable operator CableTEL. The state-owned Bulgargaz and NEK could opt to merge their telecom units, emerging as the nation's biggest infrastructure operator, said Bulgargaz board chairman Valentin Ivanov.
Source: Dnevnik (26.06.2006)

Over 60 local companies are interested in buying electricity directly from national power grid operator NEK, taking their current suppliers, the power distribution utilities, out of the equation, NEK executive director Mardik Papazyan told a public forum late last week. The said companies operate stand-alone power grid plugged into NEK substations. Sanitary wares company Ideal Standard, tile maker Han Asparuh, battery maker Energia and cartonboard producer Mayr Melnhof Nikopol have so far signed direct power supply contracts with NEK, saving as much as 33% on their previous electricity bills. The new energy bill will entitle the operators of stand-alone power networks to buy electricity from NEK, an option that the power distributors claim is in beach of the licences granted to them by the power regulator. The power distributors advocate that the new bill should settle conclusively the issue of where the transmission grid ends and the distribution infrastructure begins. The new bill also expands the definition of transmission grid to include the mid-voltage infrastructure, an area where the privately-own power distributors currently do business. The bill provides for the creation of new power distribution companies and changes the rules agreed in the privatisation of the existing 7 power distributors, said Georgi Mikov from CEZ Bulgaria, the owner of the power distribution companies servicing Sofia, the greater Sofia area and Pleven. The power distributors have warned that the adoption of the new bill would add 7.5% on average to electricity tariffs.
Source: Dnevnik (26.06.2006)

SEWRC decides today on 5.4% raise in price of power sold to NEK by large producers. The decision concerns the price of electricity purchased by the National Electric Company (NEK) from the Kozloduy nuclear power plant, Maritsa Iztok 3 thermal power plant (TPP), Rousse's heating utility, Varna TPP and Maritsa Iztok 2 TPP. These power plants account for 60% of the electricity generated in Bulgaria. NEK has already proposed that the price of the electricity it sells to electricity distribution companies (EDC) should be raised by 15%. The latter in turn have requested that the price of electricity they sell to industrial and household consumers should go up by between 16-24% and 6-6.9%, respectively. The figures have already been submitted for approval at the State Energy and Water Regulation Commission (SEWRC) and if all these demands are fulfilled, another electricity price hike may be expected in the autumn. Undoubtedly, part, if not all these demands, will be fulfilled by the SEWRC. As a result, the overall increase in the electricity price will be no less than 20%. NEK will calculate the 5.4% increase along with the 15% price-hike demanded by the company in the tariffs offered to EDCs. The increase demanded by NEK will hit directly end consumers, according to EDCs. The price hike demanded by electricity producers will come into effect as of July 1, which is outside of the regulation period in which the SEWRC may revise electricity prices. However, the increase will be calculated by NEK in the prices of electricity sold to EDCs. This means that electricity producers may insist on another price revision as of October 1, when the regulation period starts.
Source: Pari (27.06.2006)

Bulgaria's State Energy and Water Regulation Commission (SEWRC) has approved the quantities of electricity that producers will be able to sell directly to privileged consumers from July. To qualify as privileged consumers companies have to have used at least 9 gWh of electricity in 2005. Debtors of the National Electric Company (NEK) cannot buy power directly from producers. The prices of direct electricity supplies are agreed between producers and privileged consumers, the regulator only determines the total quantity. According to SEWRC's decision, producers that are not owned by NEK can agree the whole amount of electricity they generate. The power produced by the Maritsa Iztok 3 thermal power plant is bought out by NEK, according to an agreement.
Source: Pari (28.06.2006)

Kozloduy power plant to sell more electricity to major consumers Bulgaria's Kozloduy nuclear power plant (NPP) will be allowed to sell 1.4 mln MWh of electricity to major power consumers in 2006, it transpired after the energy regulator determined the supply quotas for the deregulated segment of the market. The eligible power consumers prefer to buy their electricity from Kozloduy which is able to offer lower tariffs than rival domestic producers. The NPP currently sells electricity to copper smelters Cumerio Med, Asarel Medet, Elatsite Med and Chelopech Mining, chemical works Polimeri and oil refinery LUKoil Neftochim. After Kolzoduy was granted a bigger supply quota, the NPP will start selling electricity to Duropack Trakia Papir, Berg Fitingi-Montana and licensed power trader Energy Partners. Companies with no outstanding debts to national power grid operator NEK are eligible to buy electricity directly from producers. They also have to meet a requirement for annual power consumption. That threshold will be set at 9GWh from July. According to the power regulator, some 92 companies meet the new annual consumption requirement. Five power traders and 14 eligible power consumers have so far been registered for participation in the deregulated power market.
Source: Dnevnik (30.06.2006)

The electricity, produced in wind-power facilities, will be bought by the National Electricity Company (NEK) at the preferential price of BGN 175/ mW, VAT not included, from January 1, 2007, the State Commission for Energy and Water Regulation decided (SCEWR). But the preferential price will be given only for electricity up to 10 MW, built after January 1 2007. The current price of the electricity produced by the wind-facilities, and set by the Commission, is BGN 12, VAT not included, per MW. The increase is aimed at stimulating the investments in wind-power plants and parks. Currently they are presented at the market rather symbolically. There are a few wind-power plants, built mainly near the Black Sea, as they are mainly amateur and are used for satisfaction of personal needs. According to the estimations of different experts Bulgaria may see the construction of capacities of 300 up to 500 MW over the next 10 years, mainly near the Black Sea coast. Bulgaria is falling far behind in the investments in renewable energy sources. The country engaged to Brussels to increase their share up to 11 per cent of the gross domestic consumption by 2011, as currently it is about 1 per cent. The Commission’s decision to increase the wind-power electricity price, is expected to accelerate the implementation of the two big investment projects. One of them is for construction of win-power park below Murgash summit in the Balkan Mountain. It is developed by the local company Ecosource Energy, owned by Mr. Plamen Stoyanov, who also holds the metal-waste trading company Ecometal Engineering. The project which is already ran is valued to EUR 86 mln and stipulates the construction of 44 wind generators with the total capacity of 100 MW. The other investment that is expected to start by the end of the year, is developed by the Japan-based company Mitsubishi Heavy Industries. The Japanese project costs BGN 92.2 mln, and is implemented along with the local company Inos-1 LTD.
Source: Capital (30.06.2006)

The thermal power plant (TPP) in Varna will be paid over the next 5 year by Bulgaria's national electricity utility NEK to maintain a reserve production capacity that could be plugged into the national power grid to meet peak demand. The reserve capacity agreement is yet to be approved by the board of Czech utility company CEZ which recently bought the 1,263MW power station for 206 mln euro. In Bulgaria CEZ also owns majority stakes in the electricity distribution companies servicing Sofia, the Sofia region and Pleven. In related news, CEZ said the 3 power distributors will spend 18.94 mln levs in 2006 and 2007 on the purchase of private transformers and mid-voltage aerial power lines and underground cable power lines. Under Bulgaria's Energy Act, the transfer of possession should be completed by 2011 at market value. Upcoming legislative amendments will allow power users with grids directly coupled with the NEK network to dispose of the services of power distributors and buy electricity from the national grid operator.
Source: Dnevnik (07.07.2006)

The core production assets of Bulgarian refinery Nova Plama will be sold in bulk at an international auction after the creditors of the bankrupt company took a decision to this end. The non-production assets will be sold separately. The proceeds from the disposal of the non-production assets will be used to settle outstanding payments to national power grid operator NEK. One of the first tasks of the appraiser appointed by the creditors will be to take stock of the warehoused finished products. The creditors estimate that the Pleven-based company has stockpiled at least 39 tons of store-ready motor oils. Nova Plama was adjudicated bankrupt on May 19 on a motion from its main creditors, Yorset Holding and DZI Bank. The bankruptcy ruling is under appeal before the Supreme Cassation Court.
Source: Dnevnik (12.07.2006)

Bulgaria's national power grid operator NEK has asked Czech tie-in Skoda Alliance and Russia's AtomStroyExport to sweeten their bids for the construction of the nuclear power plant (NPP) at Belene, on the Danube, said source close to the project. According to the source, the two candidates have already improved the price and hand-over parameters of their bids. NEK reportedly asked the maximum construction timeframe to but reduced from 10 to 6 years. The commission in charge of the tender procedure motivated the request with forecasts that Bulgaria's power system will need the new capacity to be brought on stream no later then 2011-2012. NEK executive director Mardik Papazyan confirmed the information but refused to give further details. The candidates have received queries on the technical and commercial aspects of their offers, said an official from Parsons, the project consultant and engineer/architect. The duration of the construction works depends on the equipment supplier and the time it takes to put the project together, said AtomStroyExport spokesperson Irina Esipova. Skoda Alliance has cut from 10 to 6 years the hand-over timeframe for the first reactor and from 10 to 8 years the timeframe for the second reactor, said project head Roman Zdebor. Parsons will prepare a report on the state of the project reflecting the impact that the adjusted hand-over deadlines will have on the undertaking and its cost. Bulgaria decided last year to complete the Belene project, hiring a vendor to install two 1000MW VVER reactors and make the best use of the hardware delivered to the Belene site before the project was put on hold in the early 1990s.
Source: Dnevnik (14.07.2006)

"Bulgaria received US USD 732,000 from Russia as a compensation for the malfunctioning of the fifth power unit of the NPP Kozloduy on March 1," Minister of Economy and Energy Roumen Ovcharov told the Darik Radio. "Thus, the Russians practically take the blame for the accident. The power plant was not fully operational on March 1 and this resulted in missed future earnings ," the minister explained. "The industrial giants in Bulgaria want to pay for the electricity they use directly to the National Electrical Company, but not to the local power distribution companies, because thus their electricity bills will be reduced by thirty percent. This will be implemented with an amendment to the Energy Act.
Source: Standart (17.07.2006)

Bulgaria's national power grid operator NEK is not satisfied with the sweetened bids for the construction of the nuclear power plant (NPP) at Belene, on the Danube, tabled by Czech tie-in Skoda Alliance and Russia's AtomStroyExport and has requested lower construction costs and a shorter implementation timeframe, said energy minister Rumen Ovcharov. The negotiations with the 2 candidates will continue for another month. NEK had originally planned to be able to rank the 2 bids by the end of July. Skoda Alliance and AtomStroyExport submitted their offers for the construction of two 1,000W reactors in February 2006. NEK has already asked the candidates to cut the construction timeframe for the first reactor from 10 to 8 years and for the second to 6 years, a request that was granted. The main issue at the moment is the offered cost per megawatt of power which is too high and that would affect the price of the output, said Ovcharov. NEK is also unhappy with the proposals for the use of the equipment delivered to the Belene site before the project was put on hold in the early 1990s. There scarcely any room for improvement of the offers, said a source close to the talks. Neither Skoda Alliance nor AtomStroyExport were willing to comment on Tuesday. Russian gas monopoly Gazprom is behind both Belene candidates. It owns a majority stake in AtomStroyExport and has a participating stake in Skoda Alliance through Skoda Nuclear Engineering, a company controlled by Gazprom-owned OMZ.
Source: Dnevnik (19.07.2006)

Metizi, the Roman-based maker of steel wires and wire ropes, said it was won a BGN 5.209 mln subcontract to supply conductors and lightning-conductors to national power grid operator NEK. The company posted sales of BGN 10.7 mln in '05, up from BGN 9.5 mln in '04. A June 23 general meeting of shareholders authorised the management to issue a BGN 5 mln bond.
Source: Dnevnik (21.07.2006)

Italian utility company Enel and Bulgaria's national power grid operator NEK have launched a feasibility study for the construction of a new 600-700MW capacity on the site of lignite-fired thermal power plant (TPP) Maritsa Iztok 3, in Southern Bulgaria, said Enrico Viale, executive director of Energiyna Kompaniya Maritsa Iztok 3. Energiyna Kompaniya Maritsa Iztok 3 is co-owned by Dutch-registered Maritsa Iztok Power Holding with 73% and NEK. Enel now holds 73% of Maritsa Iztok 3 Power Holdings after buying out Entergy of the U.S. in June this year. The Italian utility company also acts as investor in the 680 mln euro rehabilitation of the installed capacity of the Maritsa Iztok 3 TPP. The feasibility study is expected to be completed within a year. The cost of two new 300MW reactors is seen at over 1 bln euro but that could be brought down to 800-900 mln euro with the use of the existing infrastructure, said Viale. Enel will invite NEK to become a shareholder in the company that will build the 2 new reactors. The rehabilitation of the existing power station facilities, due for completion by January 2009, will be sped up by 4 to 6 months, said Viale. One renovated reactor has already been handed over while the upgrade of the second one should be finished by March 2007. Enel has also invested 140 mln euro in the retrofitting of the plant with sulphur dioxide removal equipment.
Source: Dnevnik (24.07.2006)

Bathroom wares company Ideal Standard and tile maker Khan Asparuh (KAI) are preparing to start buying their electricity directly from the power stations, disposing of the services of power distribution companies, said Lili Ivanova, CFO of national power grid operator NEK. The two companies will pay a transmission charge to NEK and will be at liberty to negotiate the supply tariffs directly with the producers. KAI executive director Spas Shopov confirmed that the company was in talks with a number of electricity traders but was yet to put pen to paper. A total of 14 commercial corporations and 6 licensed electricity traders participate in the deregulated segment of Bulgaria's power market. The country has opened only 15% of its power market to competition, earning a red-flag form the European Commission. Lovech-based bike maker Balkan recently opted out of the services of the power distribution company servicing its region and started buying electricity directly from NEK which managed to underprice the competition by 15%. Balkan is the 6th local company after Ideal Standard, battery maker Energia, KAI, drug maker Biovet and carton board producer Mayr Melnhof Nikopol to drop their power distributor and sign electricity supply contracts with NEK. Another 60 companies are ready to follow suit, said NEK. Their ultimate decision will be determined by the fate in parliament of a controversial amendment that would allow all power consumers directly plugged into the NEK infrastructure to buy electricity from the grid operator instead of the power distributors.
Source: Dnevnik (25.07.2006)

If both bidders for Belene NPP - the Russian Atomstroy Export and the Czech consortium Alliance do not offer revised bids, the expedience of implementing the project in this variant would be re-considered," said Rumen Ovcharov, Bulgaria's Minister of Economy and Energy. Last week the National Electricity Company and the Committee that estimates the bids for construction of the new nuclear power plant asked for re-negotiation of prices which were seen as too high and close to prices necessary for construction of a completely new plant. According to preliminary analyses, the existing facilities and the constructed infrastructure on the site for Belene NPP could taken as contributed property of NEC into the project, at the total cost of 500 million BGN(1 euro= 1.95 BGN).
Source: Standart (26.07.2006)

Energy consumers plugged into substations operated by national power utility NEK should be able to buy electricity directly from the company, opting out of the service of the power distributors, the parliamentary energy policy committee decided on Wednesday with the adoption of changes to the Energy Act. The amendments will have to be approved in parliament before becoming legislation. NEK estimates it will generate an additional 7.8 mln levs annually from direct sales to consumers. Some 60 commercial corporations are ready to start buying electricity from NEK which has managed to underprice the power distributors by as much as 15%. A total of 6 companies have already become NEK clients. If the bill is enacted that could result in the creation of duplicate transmission networks that the power distributors will not be able to supervise, said Georgi Mikov, business development director at CEZ Bulgaria. The Czech-owned company operates the electricity distribution companies servicing Sofia, the Sofia region and Pleven.
Source: Dnevnik (27.07.2006)

Thermal power plant Maritsa 3 Dimitrovgrad, owned by local businessman Hristo Kovachki, has applied for a 10-year power trader permit, the Bulgarian power regulator said on Thursday, August 3. The industry watchdog is expected to take a decision on the application next week. If the bid is successful, the power station will be authorised to buy electricity from power producers and resell it to eligible power consumers. Maritsa 3 Dimitrovgrad already sells its own output to eligible power consumers. After national power grid operator NEK loses its monopoly in 2007, Maritsa 3 Dimitrovgrad will be eligible to also export electricity abroad. The power station will become eligible to sell electricity to end-consumers from July 2007 when households will be able to pick their power utility. Maritsa 3 Dimitrovgrad will compete on the power trading market with licensed traders EFT Bulgaria, Trans Euroenergy, Enemona, Energy Partners, PCC, CEZ Trade and E.ON Trading. The Dimitrovgrad-based power station was acquired by Kovachki in 2003 on the local stock exchange. Bulgaria's electricity export capacity will decrease after the planned shutdown of units 3 and 4 of the Kozloduy nuclear power plant in 2007. NEK estimates that export capacity will fall by 200 mln to 1.5 bln kWh annually. If the power station is not modernised to meet relevant EU eco standards, Maritsa 3 Dimitrovgrad will cease to operate in 2011
Source: Dnevnik (04.08.2006)

Bulgaria's national power grid operator NEK could be forced to buy electricity produced by small-sized hydro power stations and wind- and biomass-fired power stations at preferential prices for a fixed period of 12 years if parliament adopts the relevant changes to the Energy Act proposed by an MP from the ruling majority. The sponsor of the amendments argues that the lenders loan-financing facilities for renewable energy production require from the borrower to have such a long-term contract for the purchase of the respective power station's output. NEK is campaigning against the proposed amendments, fearing the new long-term contracts could be too much on top of the 15-year agreements it has already signed to purchase the electricity produced by Maritsa Iztok 3 and 2 thermal power stations. However, the power grid operator is amenable to contracts of up to 10 years. Bulgaria raised as of July 1 the price at which the producers sell their output to NEK from 0.12 to 0.175 levs/kWh for wind farms that operate 2,250 hours annually and to 0.156 levs/kWh for wind farms that operate below that threshold. Bulgaria's market for energy from renewable sources is still in its infancy but its share of overall power production should reach 11% by 2010. The market uptake is seen at 1,445MW, including 600MW of wind power capacity. In related news, the power regulator has warned the operators of the nation's 7 electricity distribution companies - Germany's E.ON, CEZ of the Czech Republic and Austria's EVN, that they rate of return could be cut unless they invest in the improvement of service quality and the upgrade of the infrastructure. In 2005, the regulatory slashed the investment targets of the power distributors.
Source: Dnevnik (04.08.2006)

The intention of the Ministry of Economy to give more freedom to NEK to sell electricity directly to the consumers did not succeded. The Bulgarian parliament turned down the amendment giving right to the National Electric Company (NEK) and large consumers to close contracts for electricity supply. Such an option was envisaged in the cases when a consumer's electrical network is linked to the transmission company's one and the power lines are owned by the consumer.
Source: Sega (10.08.2006)

Russia's AtomStroyExport, bidding to construct Bulgaria's nuclear power plant (NPP) at Belene, on the Danube, said it has shortened the timeframe for the construction of the twin-reactor facility. If the equipment delivered to the Belene site in the early 1990s before the project was put on hold is used for the completion of the NPP, the Russian company offers to finish the first of the two reactors in 6 years and to hand over the second in 7 years. If the NPP is built from scratch, the first reactor could be completed in 7 years, said AtomStroyExport. The Russian company has improved by 6 months the hand-over target set in the proposal of competing outfit Skoda Alliance. Skoda Alliance has cut from 10 to 6 years the hand-over timeframe for the first reactor and from 10 to 7.5 years the timeframe for the second reactor, saying there was no room for further cuts. The updated AtomStroyExport offer takes into account not only the demand of the Bulgarian side to retrench implementation costs and cut the hand-over timeframe but also the additional requirements for innovative solutions, said the Russian company. AtomStroyExport proposed significant project integration with leading European companies that will be hired to deliver state-of-the-art automated equipment. The Russian company said it is ready to share 30% of the project with Bulgarian organisations.
Source: Dnevnik (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)

Two banks are bidding for Kremikovtzi's debts Two big European banks are bidding for Kremikovtzi JSC’s debts to National Electricity Company (NEK) SPJSC and Bulgargaz SPJSC. These are old debts accounting around BGN 100 mln that on an installment plan determined by the ex-government. The bank bids that are submitted to the Ministry of Economy and Energy offer covering all debts but with some reductions made by the government. Currently Kremikovtzi is accurately following it’s installment plans to National Electricity Company (NEK) SPJSC and Bulgargaz SPJSC, said the executive director Vilas Jamnis. He reminded that not so far ago the company has paid BGN 112.8 mln. With these funds all debts to National Social Security Institute and State Receivables Collection Agency for taxes and pensions were covered. This actions increased the company’s rating.
Source: Trud (18.08.2006)

Increased use of air conditioners and refrigerators in the heat wave that gripped Bulgaria in the last couple of days has pushed electricity consumption to record levels. At the same time, the sweltering heat is hotting up sales of air conditioners which are up 80 per cent over the year ago period, said electronics retailers Technomarket and Technopolis. The local vendors usually move some 80,000-100,000 air conditioners annually. Power consumption rose 3 per cent during the weekend and has already seen a 7.6 per cent year-on-year increase in the first 20 days of August, said national power grid operator NEK. The electricity intake of the 200,000 or so air conditioners humming around the country is equal to the output of a 200-250MW nuclear reactor. The 4.4 per cent gain in domestic electricity consumption so far in 2006 has outstripped earlier forecasts, prompting NEK to retrofit its plans for the construction of new power generation facilities. If the current trend persists, the peak in domestic consumption will move form the winter to the summer. The pick-up in domestic consumption also means NEK will have lowered export capacity. At the moment, the company exports 1,500MW of electricity to Macedonia, Kosov and Greece. NEK has assured that the heat wave will not tax the country's power supply capacity. All power stations are in order and the water level in the dam lakes is high enough to ensure the operation of the hydro power plants.
Source: Dnevnik (22.08.2006)

The EUR 220 mln Tsankov Kamak hydro complex is the latest Bulgarian energy project that has been thrown off schedule, a source close to the project told Dnevnik. The construction of the 80MW facility, due for completion by 2008, is facing a delay of around 6 months, said the source. The project, outsourced to Austrian consortium Va Tech Hydro/Alpine Mayreder Bau GmbH/Verbundplan GmbH, is implemented under Austrian-Bulgarian memorandum for understanding and bilateral co-operation to conduct mutual actions on the Kyoto Protocol. The delay is difficult to quantify at the moment not least because of contingency reasons like the flooding in the area, said Lyubomir Velkov, chief executive director at national power grid operator NEK. NEK is in talks with the contractor to specify within 2 months the reasons for the delay and the options to speed up the project, said Velkov. No one at Va Tech Hydro could be reached for comment Monday. Delays have also afflicted the rehabilitation of thermal power plants (TPPs) Maritsa Iztok 2 and 3 while the construction of a replacement capacity on the site of TPP Maritsa Iztok 1 is dragging 5 years behind schedule.
Source: Dnevnik (29.08.2006)

'Dimitrovgrad-based thermal power plant Maritsa 3, owned by local businessman Hristo Kovachki, will export electricity to Macedonia, Greece and Turkey after the Bulgarian market is deregulated in 2007, said Borislav Tsankov, deputy director of the power station. The power regulator is expected to announce Thursday whether the TPP will be granted an electricity trader licence. At the moment, Maritsa 3 sells electricity to fertiliser plant Agropolychim and paper mill Trakia Papir. 'We are in talks with potential customers who want to buy 9-10 gigawatts annually,' said Tsankov. Bulgaria has so far licensed 11 power traders, including EFT Bulgaria, CEZ Trade Bulgaria, E.ON Bulgaria Trading, Enemona Utilities, Energy Partners, PCC Energyand Energy Trading.
Source: Dnevnik (30.08.2006)

About a dozen industrial electricity consumers have asked Bulgaria's power regulator to settle their disputes with the energy distribution company servicing their area. The stand-offs resulted from the decision of the power consumers to opt out of the services of the power distributors and to start buying electricity directly from national grid operator NEK. Reportedly, most of the complaints were filed against Germany's E.ON which owns the power distributors in Varna and Gorna Oryahovitsa and Austria's EVN which runs the power distributors in Plovdiv and Stara Zagora. The power regulator said the names of the discontent consumers will be withheld until the disputes are resolved conclusively. NEK has managed to lure customers away from the power distribution companies by offering prices that are 15 per cent lower than their supply tariff. The decision of the regulator is appealable in court.
Source: Dnevnik (01.09.2006)

DSD Dillinger Stahlbau GmbH was charged a default penalty for the delay in the rehabilitation of lignite-fired thermal power plant (TPP) Maritsa Iztok 3, in Southern Bulgaria, which the German company was hired to carry out, Enrico Viale, executive director of Energiyna Kompaniya Maritsa Iztok 3, told the Bulgarian power regulator on Tuesday. Viale did not reveal the penalty amount, citing confidentiality reasons but said it was paid by the contract before its replacement. Energiyna Kompaniya Maritsa Iztok 3 is co-owned by Dutch-registered Maritsa Iztok Power Holdings with 73 per cent and Bulgaria's national power grid operator NEK. Italian utility company Enel holds 73 per cent of Maritsa Iztok 3 Power Holdings. The replacement of the contractor was prompted by the 18-month delay of the rehabilitation project and aimed to avoid further disruptions of the hand-over schedule. The deadline for the rehabilitation has been pushed back 28 months. Enel said it plans to speed up the project by 4 to 6 months. One unit and a sulphur dioxide removal installation have so far been completed.
Source: Dnevnik (07.09.2006)

Siemens recently finished the reconstruction and modernization of electric sub-station “Plovdiv.” The project totals the sum of EUR 8.5mln. and needed to be executed for 18 months. The contract was sealed between Siemens and the National Electric Company (NEC). The opening of the renewed station was attended by the minister of economics and energy Roumen Ovcharov and the head of NEC Lubomir Velkov. The reconstruction is part of the project Energy 2 totaling EUR 153mln.
Source: Novinar (11.09.2006)

The upward revision of household electricity tariffs originally slated for October 1 may be put off by a month, it transpired after Monday's meeting between Bulgaria's power regulator and the electricity distribution companies. The power distributors were surprised to hear at the meeting that, unbeknownst to them, national power grid operator NEK had moved for review by the regulator a proposal for a 6.8 per cent hike in the tariff at which it sells electricity to the distributors. The 3 power distributors, owned by CEZ of the Czech Republic, Austria's EVN and Germany's E.ON, said the estimates they took into the meeting did not reflect the costs that the NEK proposal will add to end-consumer prices. Experts commented that NEK is pushing for a tariff adjustment now to avoid one in 2007 when it is scheduled to lose its market monopoly. The power distributors have also balked at the removal of as of this fall of the lower tariff that households are charged the first 75kWh of their monthly consumption. They argue that the retirement of the discount would add 50 per cent to the monthly bills of a substantial number of customers. The power distributors are disputing the 5 per cent inflation target adopted by the regulator which is factored into the supply tariffs. The distributors expect a slightly higher inflation of 8 per cent, a forecast that motivates their proposal for a 6-8 per cent hike in household tariffs. The price revision may be decided in November after a public discussion of the tariff proposals, said Konstantin Shushulov, chief of the power regulator.
Source: Dnevnik (12.09.2006)

"Price of electricity in Bulgaria is the sixth highest in Europe. Only the Slovakians, Romanians, Italians and the people in Poland and the Netherlands pay higher electricity bills than the Bulgarians," reads a statement of the Confederation of the Independent Trade Unions in Bulgaria (CITUB) on the planned cancellation of the threshold of 75 cheaper kilowatt-hours of electricity. The CITUB experts say that the cancellation of the cheap electricity will hit 31% of the households in Bulgaria on the pocket.
Source: Standart (12.09.2006)

Monopolies feature heavily in Top 100 For a fourth consecutive year the National Electric Company (NEK) has remained a leader in sales income, according to the Top 100 ranking prepared annually by the Bulgarian Chamber of Commerce and Industry (BCCI). In 2005 the national electricity transmission company registered a 8.15-percent increase in sales to BGN 2.39 billion. Other strong performers in sales income include the Bulgarian Telecommunications Company, Petrol, Nafta Trading, Maritsa Iztok thermal power plant, Overgas Inc. However, last year's leaders like Kremikovtsi, Lukoil Neftochim, Kozloduy nuclear power plant and the electricity distribution utilities are not in the ranking this year. The absence of the first two is due to the fact that they did not present their reports on time, while the others posted losses, Alexander Dimitrov of the BCCI explained. The surprise this year is OMV's third position. The year 2005 was also very successful for Stomana Industry and Navigation Maritime Bulgare. The biggest sales growth - nearly 80-fold - was registered by GlaxoSmithKline, which is ranked 29th in Top 100. Nearly all companies on the list are with foreign equity participation. Small and medium-sized companies find place in BCCI's two other rankings. For a second time the chamber names the best performers in terms of financial profitability (profit to equity) and economic efficiency (profit to total assets). Substantial changes are also observed in the ranking of holdings. Bulgartabac and Festa Holding have dropped out of the list and Bulgargas is first with a net profit of BGN 11.664 million. It is followed by Industrial Holding, which has shifted from the eighth position.
Source: Pari (21.09.2006)

NEK, BTC and OMV lead '05 domestic sales rankings National power grid operator NEK, telecom BTC and fuel retailer OMV lead the Top 100 domestic sales rankings for 2005 prepared by the Bulgarian Chamber of Commerce and Industry. The 8th annual edition of the rankings is based on the financial reports, stock exchange filings, audits and otherwise publicly disclosed corporate information from some 5,000 local companies. The sales total of the companies included in the survey rose 30.7 per cent to BGN 56 bln versus a nation-wide average growth of 14.2 per cent. The rankings are dominated by energy, telecom, construction, transport and business service companies. NEK's BGN 2.387 bln in sales for 2005 (+8.15 per cent y-o-y) ensured it remains in the top spot for the 5th year in a row. It is followed by BTC with BGN 1.014 bln in sales (-2 per cent y-o-y) and OMV Bulgaria with BGN 576 mln (+94 per cent y-o-y). Drug maker GlaxoSmithKlein posted the highest sales growth - in excess of 8,000 per cent, while the Droujba Glassworks turned in the best performance in terms of profit per BGN 100 of sales. The biggest profit-makers among the domestic holdings and economic groups were Bulgargaz (BGN 111.7 mln), Industrial Holding Bulgaria (BGN 29 mln) and Videolux Holding (BGN 25.8 mln).
Source: Dnevnik (21.09.2006)

France's Alstom and US AES signed yesterday a contract for the construction of a 670 mW replacing capacity at Maritsa-Iztok 1 thermal power plant (TPP) in Bulgaria. The two companies have reached an agreement that the bulk of the rehabilitation and upgrade works will be carried out by Alstom. The value of the project is estimated at over EUR 700 million. The Bulgarian government will not participate in the selection of subcontractors for the project as the contract was signed only by the two companies. Alstom's participation in the project will extend by 18 years the lifetime of the TPP and will improve considerably its efficiency. AES have also signed a 15-year contract with the National Electric Company (NEK) for the purchase of electricity from the TPP. The US company also has a 15-year coal supply contract with the Maritsa Iztok Mines.
Source: Pari (26.09.2006)

French power and transport engineering group Alstom was quoted as saying Monday by news agency Reuters it had won a contract worth more than EUR 700 mln with U.S. company AES Corp. to build a turnkey 670MW clean coal power plant in Bulgaria. The contract covers engineering, procurement, construction and in-house manufacturing of the main equipment for the Maritsa East 1 lignite-fired power plant, located near the town of Galabovo in south-eastern Bulgaria, Alstom said in a statement quoted by news agency AFP. Maritsa East 1 will be the first large-scale power project to be built in Bulgaria for the last twenty years and is planned to start commercial operation in 2009, said AFPs. The plant will achieve emissions levels below those required by the European Union Large Combustion Plant Directive.
Source: Dnevnik (26.09.2006)

The recognised debts of Nova Plama exceeded BGN 300 million, after the three receivers of the bankrupt refinery submitted the list of creditors to the Pleven district court. A total of BGN 60 million were added to the BGN 240 million liabilities accumulated as a result of the failed rehabilitation plan of the company. Nova Plama owes BGN 3,846,072 and BGN 91,274 to Bulgargas and the national Elelectric Company (NEK), respectively. The State Receivables Collection Agency (SRCA) claims receivables for BGN 47,205,014. Nova Plama was declared insolvent for the second time at the demand of Jorset Holding, the successor of First Private Bank and Mineralbank.
Source: Pari (27.09.2006)

The 3 receivers of Pleven-based oil refinery Nova Plama submitted for review Tuesday to the Pleven regional court a list of the company's creditors and their dues. The biggest creditor on the list is the State Receivables Collection Agency which is owed BGN 47.205 mln in back taxes and fees by Nova Plama. The list also features a BGN 3.846 mln debt to gas distributor Bulgargaz and a BGN 91.274 mln debt to national power utility NEK. The new list of creditors is not related to the recovery plan of the refinery approved in 1999. Under that plan, the refinery has rescheduled the payment of BGN 241 mln in debts over a 35-year period. However, the creditors have moved a bankruptcy petition against Nova Plama, claiming the recovery plan is making no progress. An appeal of the bankruptcy proceedings against the refinery, whose main installations have been idled since end-1999, will be heard by the Supreme Cassation Court on November 9.
Source: Dnevnik (28.09.2006)

Italy's Enel, which owns 73% of Bulgaria's Maritsa Iztok 3 thermal power plant (TPP) refinanced EUR 450 million loan for the rehabilitation of the TPP. The repayment period for the loan is set at 17 years and will cover all investments related to the ongoing modernisation of the TPP. The funding was extended by French investment bank Societe Generale. Italy's credit risk insurance agency SACE has issued a guarantee for the repayment of the loan. Energy company Maritsa-Iztok 3 will reduce the price of electricity sold to the National Electric Company (NEK) as a result of the more favourable conditions on the new loan.
Source: Monitor (03.10.2006)

Maritsa Iztok 3 Power Company Monday said it has successfully completed the refinancing of the Maritsa Iztok 3 TPP refurbishment project. The company has secured a loan of 450 mln euro with a door to door tenor of 17 years to cover all the planned investments for the ongoing rehabilitation of the Maritsa Iztok 3 thermal power plant (TPP). The French investment bank Societe Generale has arranged and underwritten the new loan. The loan is covered by an unconditional repayment guarantee provided by SACE, the Italian credit risk insurer. By entering into the loan agreement Maritsa Iztok 3 Power Company was able to lock in improved financing conditions, including an extended repayment period and significantly reduced interest cost. The new loan will be used to repay the company’s outstanding debt under the existing loan agreements and finance the ongoing refurbishment of the power plant. The new single loan will replace the company’s existing long term debt financing package which consisted of four different loan tranches by various multilateral institutions, international and local banks. Maritsa Iztok 3 Power Company will pass on part of the benefits of the new financing in the form of a tariff reduction to the power off-taker, NEK, in accordance with what is foreseen in the Power Purchase Agreement entered into in 2003 as a commitment by the project to share the benefit of a refinancing with NEK. Last week, the company said it had entered into a 22 mln euro contract with Bulgarian company Totema Engineering for the design, manufacturing and construction of a gypsum dewatering plant to remove water from the gypsum produced in the new FGD desulphurisation installations of the TPP. Maritsa Iztok 3 Power Company AD is jointly owned by Enel, the Italian power company 73% and NEK, the Bulgarian power grid operator (27%). The company operates a 840MW lignite fired power plant in the Stara Zagora region of Bulgaria.
Source: Dnevnik (03.10.2006)

The privatisation of the Bobov Dol thermal power plant (TPP) should be completed by December 11, Bulgaria's sell-off authority said on Tuesday. Greek utility company PPC was picked in July this year to acquire the power station. The initial deadline for the closure of the deal was September 11 but it had to be reset to give the environment ministry enough time to issue the necessary eco permits and to settle issues related to the supply of locally mined coal and to the reserve capacity agreement with national power grid operator NEK. In addition, due to the protracted sale procedure, the buyer is entitled to conduct a new due diligence of the power station. PPC bid EUR 36.17 mln for a 51 per cent stake in the TPP and pledged EUR 34.8 mln for a capital raise. The Greek company has also undertaken to buy out the residual interest for EUR 34.75 mln by 2007.
Source: Dnevnik (04.10.2006)

Bulgaria's National Electric Company (NEK) and Italy's Enel are signing a memorandum of understanding on Wednesday concerning feasibility studies for the construction of additional electricity-generating facilities on the site of thee Maritsa Iztok 3 thermal power plant (TPP). The capacity of the new plant will be about 600 mW. The Italian company is a majority partner with NEK in Energy Company Maritsa Iztok 3 and has committed to upgrade the TPP's units and install desulphurising facilities. The plans for a new plant were first unveiled in December 2005. Later on it emerged that Enel would invest some EUR 15 billion in the region. Enel is also expected to sign a memorandum with Bulgargas on the development of a gas pipeline from Bulgaria via Macedonia and Albania to Italy, which will parallel transport Corridor No. 8.
Source: Sega (04.10.2006)

Italian utility Enel plans to invest 900 mln euro in a 640MW coal-fired power plant in Bulgaria, to boost its generation capacity in the Balkan state to 1480 megawatts, its chief executive was quoted as saying Wednesday by news agency Reuters. Fulvio Conti signed a memorandum of understanding to launch a feasibility study with Bulgarian power grid operator NEK for the new unit, which Enel wants to build next to its existing plant in the country's Maritsa Iztok power complex. 'The approximate future investment in the project will be around 900 mln euro,' Enel said in a statement quoted by Reuters. Enel is also upgrading its majority-owned 840MW plant under a 600 mln euro program aimed to boost the generator's capacity and bring it up to EU environmental standards, said Reuters. NEK holds a minority stake in the plant. If carried out, Enel's plan will join a number of other foreign-backed energy projects in Bulgaria, which is fighting to stay southeast Europe's leading power exporter after it closes two 440MW nuclear reactors ahead of EU entry next year, said the news agency. The nuclear plant provides around 40% of the Black Sea country's electricity. The Maritsa Iztok lignite coal complex accounts for another 30%. German utility RWE has expressed interest in building a 600MW plant in the complex, which also hosts Bulgaria's largest coal-fired plant, a 1,450MW unit currently being upgraded by Japan's Mitsui. U.S. energy firm AES is also building a 670MW coal-fired plant there, expected to come on line in 2011, said Reuters. Bulgarian Energy Minister Rumen Ovcharov has said Bulgaria must first to study the need for new generator and then decide how to proceed. Enel also signed a memorandum of understanding to look into developing a gas line between Bulgaria to Italy that will pass through Macedonia and Albania, but gave no further details.
Source: Monitor (05.10.2006)

German utility company E.ON, which owns the electricity distribution companies in Bulgarian cities Varna and Gorna Oryahovitsa, will try to overturn in court the new electricity tariffs approved by the power regulator in late September, said Markus Kaune, senior vice president of E.ON Bulgaria. The decision was unfair because, for the second year in a row, the regulator scaled down the investment and cost targets of the power distributors, a pullback that will prevent them from meeting requirements to improve service quality, said Kaune. The operating cost target was reduced by 36% in comparison with what E.ON had proposed, said the company executive. E.ON admitted it has lost 3 major industrial clients to national power grid operator NEK.
Source: Dnevnik (06.10.2006)

Bulgaria may merge into a holding structure national power grid operator NEK, gas distributor Bulgargaz, thermal power plant Maritsa Iztok 2, nuclear power plant Kozloduy and the Maritsa Iztok mines after the gas and electricity companies complete their corporate restructuring, said economy minister Rumen Ovcharov. Shares in NEK and Bulgargaz could then be floated on the local or international bourses. The energy ministry should be ready with the concept for the large-scale restructuring - which will have to be cleared by the creditors of the affected companies, within 3 months. If the full-scale consolidation is ultimately ruled out, the merger could involve only the electricity production, NEK and Bulgargaz, said Ovcharov. Four companies, including owners of electricity distribution utilities in Bulgaria, have shown interest in swapping shares in the mentioned energy firms, said the government official. The CEOs of Bulgargaz and NEK said the corporate restructuring of their companies will wrap by the end of 2006.
Source: Dnevnik (09.10.2006)

The retrofitting of the first 4 units of thermal power plant Maritsa Iztok 2 with sulphur dioxide removal equipment is experiencing a 5-month delay, said the executive director of the power station Velizar Pachedjiev. The original deadline for the installation of the desulphurisation devices was December 2007. The project, commissioned to Japan's Mitsui, has received 191 mln euro from the Japan Bank for International Cooperation and 35 mln euro from Bulbank. The retrofitting of units 5 and 6 with sulphur dioxide removal equipment is financed by EU's ISPA program with 36 mln euro and EBRD with 34 mln euro. The power station provides 10 mln euro. The competitive procedure to pick a contractor is expected to be launched in early 2007. Maritsa Iztok 2 recorded a profit of 13.2 mln levs for January-September. In related news, Reuters reported that rating agency Standard&Poor's said it is withdrawing the power station's BB rating at the company's request. Unofficial sources said the reason was the 40,000 euro in annual rating costs for the power station.
Source: Dnevnik (10.10.2006)

The revision of the agreement on transit of Russian natural gas via Bulgaria is delaying the selection of a contractor to build the Belene nuclear power plant (NPP). The winner will be named after the gas transit negotiations finish. According to publications in the Russian press, Atomstroyexport offers a final price of EUR 2.6 billion and Czech Skoda Alliance, EUR 3 billion. Russia's Gazprombank holds substantial packages of shares in both candidates for the project. The talks between Bulgargas and Gazprom concern the transit of natural gas to Turkey, Greece and Macedonia and, at a later stage, to Serbia. The Russian side insists on paying certain fees for the transit and on Bulgaria paying gas supplies at market prices. According to the agreement of 1998, which is still in force, Bulgaria pays USD 270 per 1,000 cu. m for domestic supplies and USD 82 per 1,000 cu. m when transiting natural gas.
Source: Pari (10.10.2006)

A cession between NEK and Eurometal to be discussed The Anti-corruption Commission will discuss in a meeting on Thursday (October 12) a cession made by National Electricity Company (NEK) and Eurometal LTD – Pernik. In March 2005 the company Bulgarian State Railways and NEK signed a cession contract according which Eurometal LTD and the American company Kingston Enterprises bought a BGN 60 mln debt of the infrastructural company that is part of NEK.
Source: BIA (11.10.2006)

The size of the state guarantees that will be extended for the construction of the Belene nuclear power plant will be determined after the European Atomic Energy Community (Euratom) confirms the financing for the project and the contractor is picked, Bulgarian economy minister Rumen Ovcharov said on Tuesday. Euratom plans to extend a EUR 300 mln to Bulgarian national power grid operator NEK for the purposes of the Belene project. That financing will require the provision of state guarantees unless otherwise agreed at an upcoming meeting with Euratom in November. No state guarantees for the Belene project are envisages in Bulgaria's 2007 budget bill. It has been agreed with the finance ministry that the project would get state guarantees after the financial packaging is finalised, said Ovcharov. NEK is expected to select the builder of the NPP within the next 2 weeks. Russia's AtomStroyExport and Czech tie-in Skoda Alliance are competing for the contract.
Source: Dnevnik (11.10.2006)

The National Electric Company (NEK) is launching construction works on the Slantchev Bryag-west substation at the eponymous seaside resort, the company said. The occasion marks the start of NEK's investment programme for the expansion of the electricity supply network of the company. ABB Bulgaria won the procedure for the construction of the new substation, which was organised under the Public Procurements Act. The value of the project stands at EUR 4 million. The contract was signed in July and came into effect in August. ABB has to build the substation in eight months. The construction of hotels and industrial buildings in the region brought about problems with electricity supplies and power shortages not only in towns but in villages as well. The new substation will secure the electricity supplies for the Slanchev Bryag resort and neighbouring Nessebar.
Source: Monitor (11.10.2006)

Nat'l power grid operator NEK has started the construction of a new substation in seaside resort Sunny Beach. The facility will be built by ABB Bulgaria which won the EUR 4 mln contract on a competitive basis. NEK also plans to expand the Aitos substation and link with the Karnobat substation via 2 new power lines. The construction of new substations will begin near Sozopol and Pamporovo by the end of '06. Work on new substations in Razlog, Southern Sofia and Northern Plovdiv will begin by '08.
Source: Dnevnik (11.10.2006)

Czech tie-in Skoda Alliance has cut to 4 years the timeframe for the completion of the Belene nuclear power plant (NPP), on the Danube, said Miroslav Fiala, director general of Skoda Nuclear Engineering. Skoda Alliance is a partnership between Skoda Praha, Skoda Nuclear Engineering and the Czech Nuclear Research Institute. Skoda Alliance and Russia's AtomStroyExport submitted offers for the construction of two 1,000W reactors in February 2006. In mid-August, Skoda Alliance has cut from 10 to 6 years the hand-over timeframe for the first reactor and from 10 to 7.5 years the timeframe for the second reactor. A delay in the launch of the Belene NPP could bring about a sharp increase in domestic electricity prices, said Fiala. The Czech tie-in has estimated that the investment in the Belene NPP will be recouped in 15 years. The Skoda project will easily fit into a price target of 4 euro cents/kWh, said the director general of Skoda Praha, also part of the Skoda Alliance consortium. If Skoda Alliance fails to win the Belene contract, the members of the consortium will pursue independent deals with AtomStroyExport, said Fiala. He expects that Bulgarian power grid operator NEK will pick a contractor for Belene by the end of 2006.
Source: Monitor (12.10.2006)

Russia's AtomStroyExport is the most likely winner of the deal for the construction of Bulgaria's Belene nuclear power plant, on the Danube. That outcome from the selection procedure, which also includes Czech consortium Skoda Alliance, was indirectly confirmed by Thursday's meeting in Paris of Bulgarian economy minister Rumen Ovcharov and Anne Lauvergeon, chairman of the executive board of Areva, an AtomStroyExport subcontractor. Ovcharov himself said that the results form the competition will be announced next week. The Russian press tipped AtomStroyExport as the likelier winner of the contract back in September. Skoda Alliance Wednesday said it has cut to 4 years the timeframe for the completion of the first unit of the new NPP. The tie-in said it expected that Bulgarian power grid operator NEK will pick a contractor for Belene by the end of 2006. Sofia is in a hurry to name a contractor for the project before EU entry on January 1, 2007 because after that date, the undertaking will require the approval of the EU energy and transport directorate.
Source: Dnevnik (13.10.2006)

NEK, Bulgaria's national power grid operator, is in talks with electricity traders on long-term contracts for the purchase of the output of yet-to-be-built nuclear power station Belene, Dnevnik learned from a source close to the negotiations. NEK is reportedly in talks with Italy's Trafigura Electricity, Swiss Atel and German-Swiss Egel. The negotiations are in progress despite the fact that NEK is yet to pick a company to build the new plant. The contract is contested by Russia's AtomStroyExport and Czech outfit Skoda Alliance. The singing of long-term contracts is necessary for the successful implementation of the project, said NEK. Talks have been held with different companies but pen has not been put to paper with any of them, said NEK. However, Dnevnik has learned that a 15-year agreement for the purchase of 500 mln MWh has been inked with Trafigura Electricity. The purchase price per kWh will be adjusted annually from the base of 35 euro/MWh outlined in the tender documents for the Belene project. The Trafigura agreement also functions as a guarantee before the banks interested in financing Belene. The strategic investor interested in the project include Germany's E.ON, Italy's Enel and Czech CEZ. The long-term power deals will stunt the development of the local market, warn experts. On the other hand, they allow the state to hedge some of the risks inherent to the implementation of power projects. Similar 15-year purchase contracts have already been signed for Bulgaria's newly built Maritsa Iztok 1 thermal power station and the rehabilitated Maritsa Iztok 3.
Source: Dnevnik (16.10.2006)

The rehabilitation schedule for the first four units of coal fired thermal power station Maritsa Iztok 2 is disrupted by delays in the design and the drafting by the contractor Mitsui Energy Projects of working projects in breach of the local legislation, says a report by the power station's executive director Atanas Dimitrov. The power station is forced to allow the contractor to go ahead with the installation and assembly work without the adequate paperwork on the condition that the Japanese corporation will hand it over before the respective facility is commissioned. The retrofitting of the first 4 units with sulphur dioxide removal equipment is 5 months behind schedule while the modernisation of unit 2 is 2 months behind. Units 1 and 2 have been switched off for 14-month rehabilitation. The power station is in talks to delay the unit 3 stoppage for after the upcoming winter season. Unit 4 should be switched off in April 2007. The EUR 226 mln project has received EUR 191 mln from the Japan Bank for International Cooperation and EUR 35 mln from Bulbank. Another serious problem reported by the management of the power station is the delivery of equipment that is in poor condition or that lacks the necessary paperwork.
Source: Dnevnik (16.10.2006)

Six companies licensed to operate as power traders have petitioned Bulgaria's Supreme Administrative Court to overturn a recent hike in the transmission fee they are charged by national power grid operator NEK. Energy Partner, EFT Bulgaria, PPC, Enemona Utilities, Energy Market and Transeuro Energy have contested the decision of the local power regulator to approve from the beginning of October an increase in the transmission charge to BGN 10.67. The increase of BGN 1.36 was requested by NEK. The plaintiffs argue that the regulator was in breach of the energy law which obliges the watchdog to create conditions for a competitive electricity market. The power traders further claim that the tariff hike discriminates against the consumers participating in the deregulated segment on the power market. The tariff revision will lead to higher prices for the end-consumers, a development that would allow NEK to underprice the power traders, argue the claimants.
Source: Dnevnik (16.10.2006)

The rehabilitation of the Dolna Arda cascade started officially yesterday, the National Electric Company (NEK) said. The overall value of the project is estimated at EUR 65 million. Loan agreements will secure 70% of the funding, while the remainder will be provided by NEK. The Joint Implementation mechanism under the Kyoto Protocol is applied in the project. Austria's agency for export crediting, Austria's Va Tech Finance, ING Bank and Corporate Commercial Bank will provide funding for the project. The installed capacity of the Dolna Arda cascade will be raised to 331 MW in 2009 after the rehabilitation, compared to 270 MW at present.
Source: Pari (18.10.2006)

Austrian company VA TECH Hydro Tuesday started the rehabilitation of 3 power stations part of the Dolna Arda hydro complex, Southern Bulgaria. The cost of the rehabilitation project, which should be completed by October 2010, is EUR 49.5 mln. As part of the upgrade, which will increase the capacity of the complex to 331MW, Austria's Porr Technobau und Umwelt AG and local outfit Risk Engineering will design and implement the expansion of the 60MW Studen Kladenets hydro power plant at a cost of EUR 15.9 mln. In Bulgaria, VA TECH Hydro is also building the EUR 220 mln Tsankov Kamak complex, a project that is 5 months behind schedule. The facility should be ready by 2008. Both hydro power projects are implemented under Austrian-Bulgarian memorandum for understanding and bilateral co-operation to conduct mutual actions on Kyoto Protocol.
Source: Dnevnik (18.10.2006)

The National Electricity Company (NEK) will open a sub-plant Targovishte - Zapad (West), which will supply the glass and china producing plant Trakia Glass Bulgaria SPJSC, and will be placed on the plant’s ground.
Source: Agency Focus (19.10.2006)

The European banks that declared interest in the financing of the NPP Belene do not withdraw from the project as green organizations reported at the end of last week, said the National Electricity Company (NEK) and added that there are new candidates to invest in it. The eco-organization, managed by a single center, supported by the alternative more expensive petrol, coal and gas business, started large company in front of offices of banks in various European cities, against the construction of the Bulgarian NPP. The “green” reported that Bank Austria Creditanstalt, subsidiary of Unicredit Group, withdraws but this branch of the Italian bank group has never wanted to take part in the process.
Source: Novinar (23.10.2006)

About BGN 80m will be invested for the infrastructure in Nesebar municipality for the period from2007 to 2008. The investment programme was announced by the mayor Nikolay Trifonov after the ceremony of corner stone ceremony of Sunny Beach West substation, the investment amounts to BGN 8m. It is due to start operation next active summer season. The state budget will provide funds for the second stage of the construction of the water supply system of the town of Nesebar. BGN 8m have been spent until now as well as BGN 1.2m co-financing from the municipality. The second stage will involve BGN 8m co-financing.
Source: Construction City (23.10.2006)

A disruption in Ukrainian and Russian supplies could leave the lignite-fired thermal power plant in Varna, acquired last month by Czech utility company CEZ, to cope with a coal shortage during the winter period. The power station said it has a stockpile of some 0.15 mln tons that will last it for another month if runs on only one unit. If the supply crunch is not avoided, the reduced output of the Varna power station will force national power grid operator NEK to scale exports down to 400-600MW. The Varna TPP, which runs solely on Russian coal, produces 10 per cent of Bulgaria's electricity output. The new Czech owner of the power station has already organised an international supply tender which attracted 9 offers. For of those were turned down due to high prices. The company is now in talks with 5 potential suppliers, including 2 with which it already does business. CEZ said it will propose to the power regulator a 10-15 per cent hike in the price of the electricity the Varna TPP sells to NEK. A fuel switch to gas will not work for the Varna TPP because it will have to increase the price of electricity from 45.82 levs/MWh to 97.6 levs/MWh.
Source: Dnevnik (25.10.2006)

Bulgaria's national power grid operator NEK was quoted by news agency Reuters as saying Monday it had chosen a group led by Russia's AtomStroyExport to build a new 2,000MW nuclear power plant at the Danube town of Belene. Bulgaria is building the new generator so it can remain the leading power exporter in southeast Europe after it shuts down two 440MW reactors by the end of the year due to EU entry on January 1, said Reuters. 'Today NETC's board of directors chose Atomstroyexport to build two 1,000 megawatt blocks at Belene,' NEK said in a statement. AtomStroyExport, in which Russia's Gazprom has a 49% stake, has teamed up with France's Areva and Germany's Siemens for the deal, which is worth up to an estimated 4 bln euro. The consortium beat a Czech group led by Skoda JS, which is owned by Gazprom-controlled OMZ , and included German firm Hochtief and Westinghouse, the U.S arm of British Nuclear Fuels being bought by Japan's Toshiba Corp . 'NEK declines to comment on the size of the offer or any other details,' a spokeswoman told Reuters. She said more information would be released at a news conference on Tuesday. NEK said AtomStroyExport would build two 1,000MW A92 blocks with B466 reactors. It said the blocks, which have a lifespan of 60 years, should be readily accepted by the European Union. 'We chose this option because of its safety record,' it said. Bulgaria launched the construction of Belene in the 1980s and invested around $1 bln, but following environmental concerns and lack of financing it froze the project in 1991. The Socialist-led government has decided to keep at least 51% in the new plant and to participate and bring in a strategic investor to share in the plant's cost and operation. It said details of ownership and operator of the new plant will be decided once the builder is chosen. So far Gazprom, Italy's Enel and Czech CEZ have expressed interest in investing in and operating the plant in northern Bulgaria.
Source: Dnevnik (31.10.2006)

The Russian Atomstryexport will construct the two super modern nuclear units in Bulgaria's new nuclear power plant in Belene. They will cost 4 billion euro. The Russians' partners in the gigantic project will be the French AREVA and the German Siemens, decided the board of the Bulgarian National Electricity Company after one-hour sitting Monday. The board rated the Russian offer first to that of Skoda Alliance. The Czech consortium offered to finish the old nuclear unit that was purchased in the end of the 1980s. Bulgaria is the first European country that will construct nuclear units of third generation after the Chernobyl disaster. The units will start functioning in 2013 and 2014 and will produce 16 billion kW a year which will restore Bulgaria among the leaders of electricity export in Europe. Atomstroyexport builds similar units in China and India.
Source: Standart (31.10.2006)

Russia's AtomStroyExport will build a new 2,000MW nuclear power plant in Bulgaria's Danube town of Belene in a project worth up to EUR 3.997 bln, state utility NEK was quoted as saying Tuesday by news agency Reuters. AtomStroyExport will build two new 1,000MW reactors in a consortium with France's Areva and Germany's Siemens . Russia's Gazprom has a 49 per cent stake in AtomStroyExport, which will be invited to sign a contract for Belene within a month, said Reuters. AtomStroyExport's bid was cheaper than that of its only rival, a Czech consortium led by Skoda JS, which is owned by Gazprom-controlled OMZ , whose offer was for up to EUR 4.098 bln. Under the Russian group's offer, the first new unit should be completed in six-and-a-half years and the second one in seven and a half after Bulgaria's licensing bodies gave the green light for the construction. NEK was quoted as saying by Reuters it plans to seek financing for the big project through the export agencies of the chosen builders - Russia, France and Germany, and from leading global investment banks, Europe's Euroatom and the European Investment Bank. An information memorandum and will send out to investment banks in a month or, month and a half. AtomStroyExport has said Gazprombank has already been in talks to secure the financing for the construction with leading European banking institutions. Bulgaria aims to keep at least 51 per cent in the new plant and seek a strategic investor for the remaining stake. It plans to invite prospective investors for talks by the end of 2006, said Reuters. So far it has held initial talks with Italy's Enel , Czech group CEZ , Russia's Unified Energy System , Germany's E.ON , France's EdF , Belgium's Tractabel and Spain's Iberdrola. Analysts say Russia had lobbied strongly for the deal, using its influence as Bulgaria's only natural-gas supplier and as the key player in a planned oil pipeline through the Black Sea country to the Mediterranean coast of Greece.
Source: Dnevnik (01.11.2006)

Bulgaria could be headed for a power capacity shortfall of around 700-800MW if weather conditions over the next couple of months are particularly cold, says an economy ministry report submitted to the parliamentary energy policy committee. The lower power output capacity is due to the undersupply of coal for the Varna and Ruse thermal power plants and ongoing repairs at power stations in the Maritsa Iztok coal basin. The situation will be further complicated by the switch-off in early 2007 of units 3 and 4 of the Kozloduy nuclear power station. In addition, national railway carrier BDZ lacks the necessary cars to transport coal to the Bobov Dol TPP. TPP Maritsa Iztok 3, undergoing modernisation by Italy's Enel, is also dogged by power equipment glitches. Bulgarian economy minister Rumen Ovcharov has duly warned Brussels of the regional power shortfall that will follow the stoppage of the Kozloduy units.
Source: Dnevnik (02.11.2006)

Atomstroyexport, which won the tender for the construction of the Belene nuclear power plant (NPP) will pay heavy forfeits, if the completion of the project is delayed even by a day to NEC, Sergey Shmatko, president of the company said yesterday. If the NPP is completed ahead of schedule Atomstroyexport will receive a bonus, Shmatko said. The contract between Atomstroyexport and NEC for the construction of the second atom power plant will be signed at the end of November.
Source: Monitor (02.11.2006)

“The Board of Directors of the National Electric Company (NEC) announced all the criteria for the Nuclear Power Plant Belene (NPP Belene) Project. We have nothing to hide from the Bulgarian society. Everything was clear still at the time when a decision had been made on the construction of the plant two years ago”, Bulgarian Minister of Economy and Energy Rumen Ovcharov said on BNT. He explained that Bulgaria’s electricity export will be reduced as of next year. “I do not want Bulgaria to feel responsible about the fact that Kosovo might be affected. We helped it in the summer, now we can’t do so any more and I have to inform it of that”, Mr. Ovcharov said commenting on his motives for sending a warning letter to the EU Commissioner for Energy Andris Piebalgs. “The shutting down of the units 3 and 4 won’t lead to a crisis in the region. It is the opinion of the European Commission, as well”, Ovcharov stated. “The Commission has to take measures to fulfil its commitments to the region. Bulgaria is not responsible for what will happen”, Rumen Ovcharov asserted. The Bulgarian Minister of Economy and Energy also said that a meeting would be held in Skopje on November 17, when he hoped that the EU Commissioner for Energy would answer the questions he had been asked.
Source: Agency Focus (03.11.2006)

The electricity distribution company servicing the greater Sofia area has failed to overturn in court a decision by the nation's power regulator allowing Biovet, the Peshtera-based pharmaceuticals company, to buy electricity directly from national power grid operator NEK. A three-judge panel of Bulgaria's Supreme Administrative Court (SAC) has determined that the power distributor does not supply electricity to Biovet using its own transmission infrastructure. A court-appointed expert has determined that the substations and powerlines enabling the supply of electricity to Biovet are the property of either NEK or the drug maker itself. The power distributor, owned by Czech utility company CEZ, argued that the supply deal between Biovet and NEK was in breach of its licence. Bulgaria's energy bill allows power users directly plugged into the NEK grid to buy their electricity from the grid operator and not from the distribution company servicing their area. Biovet was one of the first local industrial power consumers to opt out of the services of the power distributors and seek a direct deal with NEK. All industrial power consumers will be liberty to pick their electricity provider after Bulgaria opens the power market to competition in early 2007.
Source: Dnevnik (08.11.2006)

Nexcom, the local telecom start-up, said it completed in late October the rerouting of all telecom traffic to its just-finished fibre-optic backbone. Nexcom has looped Sofia, Plovdiv, Stara Zagora, Sliven, Varna, Burgas and Veliko Tarnovo and plans to add over the next 3 months Ruse, Pleven, Shumen, Haskovo, Dobrich, Yambol, Vratsa and Blagoevgrad. The new infrastructure, boasting VOD, conferencing and multimedia application readiness, will serve as a launch pad of Nexcom's WiMax network. BTC, vivatel, Mobiltel, Globul and CableTEL are on the list of local cable and telecom carriers with proprietary fibre-optic backbones. Several major utility companies like national power grid operator NEK and gas distributors Bulgargaz and Overgas have also installed sections of fibre-optic cables with their main infrastructure.
Source: Dnevnik (09.11.2006)

Russia's AtomStroyExport, set to build a new 2,000MW nuclear power plant at the Danube town of Belene, Bulgaria, is counting on becoming a shareholder in the power station, news agency Reuters was told by Ilya Kochevrin, vice president of Gazprom subsidiary Gazprombank which owns 45 per cent of AtomStroyExport. Bulgaria's national power grid operator NEK last week announced that AtomStroyExport has won the competition to build the country's second nuclear power plant. Gazprom is not ruling out making a play for a stake in the project, something the Bulgarian legislation allows, said Kochevrin. Bulgarian energy minister Rumen Ovcharov has already announced that 49 per cent of the power station are up for grabs by foreign investors. Kochevrin said Italy's Enel and Eni could be brought in as potential investors because they are interested in the export of Belene electricity. The EUR 4 bln Belene project will be financed by a pool of banks which could include - on the Russian side, Gazprombank, Sberbank, VTB and Vnesheconombank, said Reuters. The building contract for the Belene NPP should be signed in late 2006 or in the first quarter of 2007, said Kochevrin. Last week, NEK chief executive director Lyubomir Velkov said Enel, Czech CEZ, Spain's Iberdola, Germany's E.ON and Russia's RAO EES were interested in joining the project as investors.
Source: Dnevnik (10.11.2006)

The Maritsa Iztok mining company has applied to be issued a 35-year permit to operate as an electricity trader. At the moment, the mines buy electricity directly from the Kozloduy nuclear power plant and were one of the first local corporations to enter the deregulated segment of the Bulgarian power market. The mines have a 110kV network that connects to several industrial power consumers which do not have access to the infrastructure of national power grid operator NEK, said executive director Ivan Markov. On Friday, the local power regulator will review an application for a 10-year power trading permit submitted by Stadkraft South East Europe, a subsidiary of Stadkraft Europe which is in turn owned by Norway's Stadkraft. Bulgaria has so far licensed 15 power traders, including EFT Bulgaria, Energy Partners, PPC, CEZ Trade, E.ON Bulgaria Trading, Enemona Utilities and Transeuro Energy.
Source: Dnevnik (15.11.2006)

NEK, the Bulgarian national power grid operator, has posted on its website an invitationfor letters of intent from partners that would be interested in power sale agreements involving the future Belene nuclear power plant. The company will respond to the letters of intent by the end of 2006. NEK is marketing 500 to 1,000MW to be generated by the new NPP which will have two 1,000MW units. Deliveries should commence in 2013. Eligible partners should have at least 5 years of experience in power trading, annual turnover exceeding EUR 300 mln and established business relations in the Southeast Europe and sales of electricity exceeding 2.5 TWh. The minimum delivery period is 15 years while the minimum contract quantity is 100MW. The candidates should have bank guarantees issued by first class international banks. In related news, online media outfit Russian Financial Control reported that AtomStroyExport has started negotiations with NEK on the signing of the preliminary agreement on the design and construction of the Belene NPP. The Russian company expects to sign the final contract by mid-2007.
Source: Dnevnik (15.11.2006)

Bulgaria's National Electric Company (NEK) is looking for partners interested in buying electricity from the Belene nuclear power plant (NPP), which is yet to be built. NEK expects candidates to have at least five years of experience in power trade and established relations in Southeast Europe. They have to have an annual turnover exceeding EUR 300 million and electricity sales of more than 2.5 tWh. The Bulgarian power transmission company offers contracts for a minimum quantity of 100 mW and for a period of at least 15 years. Candidate buyers have to provide information about their credit rating and a declaration of the quantity, profile of electricity and supply period they are interested in. The documents also have to include the destination country and a market forecast.
Source: Monitor (15.11.2006)

Bulgaria to integrate mines, power and gas utilities into holding structure The Maritsa Iztok mines, thermal power stations Maritsa Iztok 1, 2 and 3 and the company that will design the future Belene nuclear power plant will form a unit within the holding structure of national power grid operator NEK. The restructuring is the first stage in a plan to consolidated power production presented Wednesday by Bulgarian energy minister Rumen Ovcharov. The consolidation process should get underway in 2007. Bulgartal, the telecom division of gas distributor Bulgargaz, and NEK's telecom operations will be integrated into the holding structure at the second stage of the project. The third stage will entail the consolidation of electricity production and transmission and gas transmission. The idea is to establish a separate company in charge of power and gas system management and transmission. The consolidation concept also envisages the creation of a financial outfit involving only the power stations which could be listed on the local or a foreign stock exchange. Bulgaria may list 5 per cent to 15 per cent on the Bulgarian bourse and add a further 10-15 per cent in 12-14 months; a second option is to offer 10 per cent to 30 per cent in the company to select investors in the U.S. and UK; a third option is to list 5-19 per cent on the Bulgarian bourse and 20-30 per cent abroad.
Source: Dnevnik (16.11.2006)

Britain's Rolls-Royce will supply gas turbines for the co-generation power project of Bulgaria's Polimeri, a chemical company, and paper mill Kostenez-HHI. The generators for the project will be supplied by another British company, Centrax Polimeri will get two 501-KB5 co-generators which should be operational by November 2007. The launch of the co-generation facility at Kostenez-HHI, seen by the last quarter of 2007, will cut company spending on liquid fuels. National power grid operator NEK will buy the electricity output of the project at a preferential tariff. The facility will be built as a result of an agreement signed by AKB Fores, the parent company of Polimeri and Kostenez-HHI, and Dutch agency Senter Novem under an Emission Reduction Unit Procurement Tender.
Source: Dnevnik (20.11.2006)

Turkey's national power transmission utility is willing to renew from 2007 the electricity imports from Bulgaria halted 3 years ago, newspaper Turkish Daily News reports. The two sides are negotiating a delivery price of 5.7 cents/kW. Ankara turned the tap on Bulgarian power imports in 2003, saying Sofia had failed to keep its part of a swap of electricity for participation of Turkish companies in Bulgarian infrastructure projects. Ankara's upcoming membership in the Union for Co-ordination of Transmission of Electricity, expected to happen in 2007, creates multiple opportunities to couple the Bulgaria and Turkey's transmission grids, said the newspaper. Bulgaria's national power grid operator NEK confirmed the electricity export talks with its Turkish counterpart but said the upcoming closure of units 3 and 4 of the Kozloduy nuclear power plant will severely limit domestic power capacity. The company has decided not to pursue new power export deals and to forgo international power export tenders.
Source: Dnevnik (22.11.2006)

In the coming year, Bulgaria's nuclear power station in the Danube town of Kozloduy will work at a loss, if an 18-percent price hike of power supplies is not approved after January 1, 2007. Standart learnt the news from Ivan Genov, Director of the Plant, after the sitting of the parliamentary energy committee. The agenda was the report of the management on winter preparedness. Electricity price might rise by only 3-4 percent if the State Energy and Water Regulatory Commission agrees that Kozloduy sells half of the generated energy at the free market instead of only 20 percent as it is now. Currently the Plant's free-market price of electricity is about 18 percent higher than the sale price offered by the National Electricity Company, Genov said.
Source: Standart (23.11.2006)

Austria's EVN, which owns the regional electricity distribution utilities in Bulgarian cities Plovdiv and Stara Zagora, is interested in the acquisition of shares in the holding company that will be formed with the merger of the state-owned mines, power and gas utilities, said EVN board member Peter Layr. Bulgarian energy minister Rumen Ovcharov recently said equity from the new holding company could be swapped with power majors like E.ON, EVN or Enel. Two weeks ago, Ovcharov presented to the parliamentary energy policy committee the energy holding concept. The Maritsa Iztok mines, thermal power stations Maritsa Iztok 1, 2 and 3 and the company that will design the future Belene nuclear power plant will form a unit within the holding structure of national power grid operator NEK. Bulgartal, the telecom division of gas distributor Bulgargaz, and NEK's telecom operations will be integrated into the holding structure at the second stage of the project. The third stage will entail the spin-off of electricity production and the consolidation of power and gas transmission operators. During the fourth stage, a financial outfit will be created with that could be listed on the local or a foreign stock exchange. EVN, which is in talks to buy the Plovdiv district heating company, continues to be interested in the construction of a waste recycling plant in Bulgaria, said Layr.
Source: Dnevnik (27.11.2006)

The electric company Terna will look for new opportunities for power import from Bulgaria and the other Balkan countries," said Flavio Cattaneo, CEO of the company in an interview with the Espresso. According to him, Terna wants to sign a contract for the supply of electricity with Bulgaria as soon as possible. The company specializes in the transmission of high voltage electricity on the territory of Italy and controls a 40,000 km long network. According to Cattaneo, an inter-governmental contract between Bulgaria, Albania and Macedonia for Corridor 8 can be signed soon, as the EU has already allotted the necessary funds.
Source: Standart (28.11.2006)

The price of the electricity sold by the Varna thermal power plant (TPP) to the National Electric Company (NEK) should be raised due to the higher price of imported coals used as fuel by the TPP, Ivan Bachvarov, director of the power plant, said at an open meeting of the State Commission for Energy and Water Regulation (SCEWR). The TPP currently loses BGN 10 per 1 MWh of generated electricity due to the higher coal prices. The price-hike proposed by the TPP was discussed at the meeting. The coal delivery price under the new contracts sealed by the TPP is 23% higher, Bachvarov said. The Varna TPP insists on a 20% increase in the current price of BGN 45.82 per MWh (VAT excluded). The suggested price by the TPP stands at BGN 54.89 per MWh (VAT excluded). SCEWR is expected to come up with a decision at an open meeting scheduled for Wednesday.
Source: Pari (29.11.2006)

Bulgaria's national power grid operator NEK Wednesday signed a EUR 3.9 bln agreement with a group led by Russia's AtomStroyExport to build a new 2,000MW nuclear power plant at the Danube town of Belene. The contractor will install two 1000MW reactors of the VVER 466 type. The first reactor will be ready in 6.5 years while the second will be finished in 7 years. The agreement obliges AtomStroyExport to subcontract local companies for 30 per cent of the project value which means that construction, assembly, equipment supply and transportation companies will fight it out for orders totalling EUR 1.2 bln. AtomStroyExport president Sergei Shmatko said the project will involve Ukrainian and Czech companies as well. The financial packaging of the project will become clear by mid-2007, said NEK chief executive director Lyubomir Velkov.
Source: Dnevnik (30.11.2006)

Bulgaria has refused to accept a state-guaranteed loan from Russia for the construction of NPP Belene, learnt the Standart. "Moscow is ready to finance the project for the second nuclear power plant, but Bulgaria will have to accept certain conditions," said Sergei Shmatko, president of Atomstroyexport. "We are looking for alternative means of financing the construction of the nuclear power plant and currenly Russia's offer is not on our agenda," said Rumen Ovcharov, Bulgaria's Economy and Energy Minister. According to Ovcharov, the information memoranda are still being prepared. Within a month they will be sent to the financial institutions with the aim of ensuring the necessary funds for the project. "We are negotiating with two companies, one of them is Euroatom," Ovcharov said further. "I am certain that next year we will raise the necessary financing," said Lubomir Velvkov, CEO of the National Electric Company. "At least 30 per cent of the firms involved in the project will be Bulgarian and the construction works will start in 2007," said Sergei Shmatko. The two 3G nuclear power units will have a capacity of 1000 MW and will cost a little less than EUR 4 billion. The first reactor will be finished in 6.5 years and the second one, in 7 years. Representatives of the National Electric Company and Atomstroyexport will examine and evaluate the available equipment at the Belene site.
Source: Standart (30.11.2006)

A contract for the construction of Bulgaria’s second Nuclear Power Plant at Belene was signed between Bulgaria’s National Electric Company and the Russian concern Atomstroyexport. The project plans building two 1000 MW blocs with light-water reactors of the new generation in Belene on the Danube. The new NPP will cost almost EUR 4 billion. A consortium of the companies Areva and Siemens will deliver safety equipment, controlling mechanisms, the electric system and part of the ventilation and heating systems for the plant.
Source: National radio (30.11.2006)

The simmering conflict between national power grid operator NEK and the local power distribution companies over electricity supplies to major industrial customers has flared up once again. The regional power distribution companies in Gorna Oryahovitsa and Varna, owned by Germany's E.ON, are trying to forcefully keep their clients and are stalling payments due to NEK, said the press office of the national power grid operator. NEK said the power distributors in question paid up only after it secured writs of execution against them. According to NEK, the power distributors withheld the payments it was due on the grounds of the losses they reportedly sustained after local companies Energia, Kaolin, Khan Asparuh and Ideal Standarded opted out of their services in favour of the national power grid operator. NEK said it was owed BGN 0.365 mln by the Gorna Oryahovitsa power distribution company and BGN 0.118 mln by the Varna power distribution company. E.ON is attempting to antagonise business relations by deliberately withholding due contract payments, said NEK in a press release. The national power company said other power distributors are also causing problems but stopped short of naming them. For its part, E.ON has complained to the power regulator that NEK is plucking away corporate customers in breach of the licence granted to the German company. The licence has not been breached, said Valentin Kirchev, deputy chairman of the power regulator. Bulgaria's Supreme Administrative Court has also sided with NEK in its wrangle with the power distributors.
Source: Dnevnik (07.12.2006)

Sandvik awarded major materials-handling contract in Bulgaria Sandvik Mining and Construction has received an order for materials-handling system for an Alstom engineering project in Bulgaria, the Swedish company said on its corporate website. The order, valued at about EUR 44.3 mln, comprises a turnkey lignite and limestone handling system at the Maritsa Iztok 1 power station in Southeast Sofia, Bulgaria. The advanced system has a capacity exceeding 32,000 tons per day. The Sandvik delivery will include a train unloading station, stacker/reclaimers, belt conveyors, crushers and a limestone handling system. The coal-fired power plant is scheduled to start operations in 2009. Earlier this year, Sandvik completed the delivery of a materials-handling system for coal and iron ore for the port of Burgas in Bulgaria. The Maritsa Iztok 1 project is strategically important for Sandvik in establishing close cooperation pending Alstom’s continued expansion plans in the power sector. French power and transport engineering group Alstom has won a contract worth more than EUR 700 mln with U.S. company AES Corp. that covers engineering, procurement, construction and in-house manufacturing of the main equipment for the Maritsa Iztok 1 lignite-fired power plant.
Source: Dnevnik (11.12.2006)

NEK threatens debtor Kremikovtsi with measures The National Electric Company (NEK) will take categorical measures to protect its financial interests if Kremikovtsi does not resume the repayment of debts according to the agreed schedule, the electricity transmission company said in an official notice. The metallurgical plant has been NEK's biggest debtor for years. The two sides have closed two agreements on debt repayment: in December 2003 and in July 2006. That concerns tens of millions of leva, said NEK but did not specify. In the past few months Kremikovtsi started to neglect the repayment terms. NEK also expressed its surprise that the plant's owner, Global Steel, had acquired a soccer club.
Source: Pari (11.12.2006)

Bulgaria's sell-off authority has extended by 2 months the deadline for the closure of negotiations with Greek utility company PPC for the Bobov Dol thermal power plant (TPP). The Privatisation Agency said the extension was necessitated by the need to sound the competent state institutions and departments on some aspects of the privatisation contract. The PA press release refers to the eco permits that should be issued to the new owner and to issues related to the supply of locally mined coal and to the reserve capacity agreement with national power grid operator NEK. Greek utility company PPC was picked in July this year to acquire the power station in Bobov Dol. PPC bid EUR 36.17 mln for a 51 per cent stake in the TPP and pledged EUR 34.8 mln for a capital raise. The Greek company has also undertaken to buy out the residual interest for EUR 34.75 mln by 2007.
Source: Dnevnik (12.12.2006)

Bulgaria's national power grid operator NEK will likely be unable to export any electricity in 2007 after units 3 and 4 of the Kozloduy nuclear power plant are switched off at the end of 2006, said NEK chief executive director Lyubomir Velkov. There could be a brief opportunity to sell abroad some 500-600 ml MWh if the domestic hydro power producer get a boost from an unseasonably wet spell in the spring of next year, said Velkov. NEK will sign one-off contracts for periods of no more than a month and will not commit to full-year deals as previously. Energy minister Rumen Ovcharov has approved a stand-by power capacity of 1,170MWh for 2007. NEK said power production topped 45.5 bln kWh in 2006. Exports are seen at 6 bln kWh and account for 22.7 per cent of total earnings.
Source: Dnevnik (20.12.2006)

The net profit of Bulgaria's National Electric Company (NEK) for 2006 will amount to some BGN 60 million, unchanged from last year. So far the company has produced, bought out and sold 45.5 billion kWh of electricity, NEK CEO Lyubomir Velkov said. Until the end of the year exports will reach 7.8 billion kWh. The quantity is smaller than expected due to the temporary difficulties with coal supplies to the Varna thermal power plant. In 2007 NEK will not be able to export power to neighbouring countries but will guarantee local consumption.
Source: Pari (20.12.2006)