Bulgaria Not Planning to Nationalize AES, ContourGlobal TPPs, Energy Min Says

Energy | October 8, 2015, Thursday // 22:07|  views

Bulgaria's Energy Minister Temenuzhka Petkova. Photo by BGNES

Bulgarian Energy Minister Temenuzhka Petkova has turned down a proposal by employers' organizations that potential investors should be sought to replace AES and ContourGlobal as shareholders at thermal power plants.

On Wednesday the Bulgarian Industrial Association (BIA), one of the four big employer unions, sent a statement to the media reading that a meeting is due with investors to consider the move.

Petkova, however, later told the Bulgarian National Radio no decision had been taken to seek a buyer for the shares of two US-based companies into two of the "Maritsa East" compound. These are ContourGlobal Martisa East 3 TPP and AES Maritza East 1 TPP, which the two companies have owned since the end of the 1990s.

Petkova added the idea had long been discussed in the sector but was "unacceptable to either the ministry or the Bulgarian government."

"These are private companies, they should state their will about what should happen with their property. Separately, there are long-term energy purchase contracts between the two US plants and the National Electricity Company [NEK]." Petkova also warned the two TPPs were fundaments of Bulgaria's energy system which "cannot exist" without them. 

The Republic of Bulgaria has no shares in AES Maritza East 1, but holds a 27% stake at ContourGlobal Maritsa East 3.

Some experts have blamed the two TPPs for imbalances in Bulgaria's energy mix, with preferential prices set under the long-term contracts placing a huge financial burden on the NEK.

According to the reports of employer organizations, the idea is to grant the "potential investor" the right to build new energy transmission infrastructure or to use existing infrastructure in order to directly export energy.

Other suggestions put forward by employer associations include a default at NEK and possible closure of the Bulgarian Energy Holding (BEH), a conglomerate bringing together state-owned energy infrastructure.

Employers have been submitting over the past month measures to tackle problems in the energy sector which part of the organizations see as possible alternative to the hike in energy prices paid by industrial consumers - a move which entered into force as of August 1.

On October 1, the four associations convened to discuss together an Energy Roadmap which they say could address the needs of the energy sector. 

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Tags: Temenuzhka Petkova, AES Maritza East 1, ContourGlobal Maritsa East 3, energy prices, power prices, Petkova, Bulgarian Industrial Consumers, BIA


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