Austria's Alpine Bau Dumps Bulgaria's Troubled Hydropower Project

Energy | May 16, 2010, Sunday // 15:01|  views

The construction of the Gorna Arda cascade is expected to be resumed shortly. File photo

Austria's Alpine Bau has withdrawn from the construction of Gorna Arda hydropower project in southern Bulgaria, leaving energy firm EVN the sole partner of the majority owner, dominant state power utility NEK.

This was announced on Sunday by Austria's EVN, which holds a 67% stake in one of Bulgaria's three power distributors and serves clients in Southwestern Bulgaria.

The company assured that the shareholders overhaul will not delay the project and promised that it will press for speeding it up in a bid to secure green energy for its clients in the region.

“Bulgaria turned into a hotspot for the future development of EVN group. Gorna Arda project is a long-term and strategic investment not only for EVN, but also for the region,” says the statement of the company.

At the beginning of September 2009, Bulgaria’s new government sealed a letter of approval for the construction of the hydro power project on the Arda river, known as Gorna Arda (“Upper Arda”).

This was a requirement for wrapping up of the sale of a 30,1% stake, owned by Turkey's CCG, part of the Ceylan conglomerate, to an Austrian consortium of EVN and Alpine Bau.

The move was made after a trial in the International Court of Arbitration, in which Ceylan Holding filed claims for EUR 75 M against the other member in the joint venture - Bulgaria's National Electric Company NEK, was suspended for three months.

The Turkish company was contracted to implement the project under an electricity-for-infrastructure swap deal Bulgaria and Turkey signed in 1998, during the term of the government of Ivan Kostov. The launch of the hydropower construction was delayed after the Turkish company ran into financial troubles.

The Gorna Arda hydropower project is expected to cost around EUR 500 M, which should be paid by the consortium. It is planned to have an electricity production capacity of 160 MW.

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Tags: Gorna Arda, Vladimir Urutchev, MEP, hydro-power plant, Belene NPP, Nuclear Power Plant, Kardzhali, Ceyhan Holding, EVN

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