ECONOMY

Turkey, Bulgaria tangled up in dispute over power

SOFIA – Bulgaria said yesterday that Turkey had planned to halt power purchases from its Balkan neighbor this week without giving any reason, but then changed its mind as a result of Sofia’s diplomatic efforts. A suspension in Bulgaria’s electricity supplies to Turkey would mean Sofia losing its leading power export position in the region and would undermine its plans to build a second nuclear power plant, industry officials said. Bulgaria exports 3.5-4.0 billion kilowatt hours (kWh) of power to Turkey a year, more than half of its total annual exports, under a 10-year bilateral energy deal, signed in 1998. Last Friday, Turkey’s state power company TEAS told Bulgaria’s power export monopoly NETC that Ankara would halt power imports as of April 16, giving no reasons for the decision, the Energy Ministry in Sofia said in a statement. Bulgaria’s Energy Minister Milko Kovachev contacted Turkey’s embassy in Sofia to clarify the issue, underlining that both energy-hungry Turkey and cash-strapped Sofia needed the power deal to continue, the statement said. Electricity exports, which last year totaled some 6.2-6.3 billion kWh, are an important source of revenue for Bulgaria – one of the poorest European Union candidate countries. «As a result of our diplomatic shuttle, TEAS changed its mind and sent another letter to NETC late on Tuesday, saying electricity imports would continue,» a ministry official said. She added that Kovachev would most probably travel to Ankara next week for talks with senior Turkish energy officials. A Bulgarian government source said Ankara’s action was probably aimed at putting pressure on Sofia to speed up talks on a stalled high-profile hydropower project. The $300 million project at Gorna Arda River near Bulgaria’s border with Turkey, which envisages the rehabilitation of existing dams and building three new hydropower stations, was initially to be built by Turkish Ceylan Holdings under a deal singed in 1998. Sofia has been seeking to replace Ceylan since its Bank Kapital was put under administration in October 2000 but needs Ankara’s consent because the project is part of the 1998 energy agreement. Under the agreement, in return for Bulgaria’s power supplies to Turkey, Turkish firms should participate in building the Gorna Arda project and in the construction of a highway stretch to the border with Turkey, officials have said. Sofia is in talks with Italy’s energy giant Enel to replace Ceylan in the Gorna Arda project but Ankara has indicated it wants Turkish firms to take the place of Ceylan. Some local industry experts said Gorna Arda was not the only reason for the power dispute. They said Turkey did not need Bulgarian power, which it considers expensive.