South Stream Bulgaria Company Plans Capital Hike to BGN 397 M

Energy | December 19, 2013, Thursday // 21:05|  views

Bulgaria's Economy and Energy Minister Dragomir Stoynev, photo by BGNES

Energy Minister Dragomir Stoynev has explained the BGN 191 M capital increase of the South Stream Bulgaria project company with the need to fast-track the gas pipeline scheme.

State-owned Bulgarian Energy Holding (BEH) is to contribute BGN 191 M to the capital of the South Stream Bulgaria project company and Russian energy giant Gazprom is to submit an equal amount of money, according to reports of Capital daily. The capital of the joint venture set up to build and operate the local section of the South Stream gas pipeline is to reach BGN 397 M.

The capital increase is to be used to finance the second part of the company's investment program in 2013.

Stoynev, as cited by Trud daily, informed Thursday that the capital increase would be used to fast-track the implementation of the gas pipeline project.

Meanwhile, former Economy and Energy Minister Delyan Dobrev claimed that the capital increase was being financed through a loan of BEH earmarked for covering losses in the energy sector. Dobrev, who was Energy Minister during the term in office of the center-right GERB government, cautioned that the loan of BEH would not be used as intended.

Asked to comment on the accusations, Stoynev declared he was not going to say anything about GERB, adding that the GERB (Citizens for European Development of Bulgaria) government was to blame for the dire straits of the energy sector.

He did not specify the concrete activities which would be financed with the capital increase.

Stoynev also failed to specify a date by which the contractor for the Bulgarian section of the gas pipeline would be selected, taking into account that the first tender was stopped.

He suggested that the procedure had been stopped at his insistence because a number of foreign companies had expressed willingness to take part in the tender but the deadline for the preparation of documents had been too short.

Former Prime Minister Boyko Borisov argued that Bulgaria had surrendered its sovereignty by authorizing the European Commission to hold talks with Gazprom over South Stream.

In early December, the EC cautioned that the bilateral intergovernmental agreements on the South Stream gas pipeline project between Russia, Bulgaria, Serbia, Hungary, Greece, Slovenia, Austria and Croatia had to be renegotiated in order to comply with EU law.

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Tags: Dragomir Stoynev, Economy and Energy Minister, South Stream gas pipeline, south stream bulgaria, Bulgarian Energy Holding, BEH, Gazprom, GERB government, Boiko Borisov, EU law, Delyan Dobrev


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