Bulgaria to sell power utilities

SOFIA – Bulgaria yesterday launched the delayed privatization of the 67 percent stakes in its seven state-owned power distribution utilities to liberalize the energy sector and boost its efficiency. Cabinet ministers said a successful utilities sell-off was important for the Balkan country’s image abroad and for sustaining its No. 1 position in power exports in the region while it prepares to join the European Union in 2007. The government, which initially pledged to sell the group in 2002, is eager to carry out smooth sell-offs after the landmark sales of telecoms operator BTC and tobacco monopoly Bulgartabak stumbled over legal hurdles and political rows. «The utilities sale is very important for Bulgaria’s image and for its leading energy role in the region,» Energy Minister Milko Kovachev told a news conference at which the sell-off agency announced the start of the tenders. «It will affect 4.5 million Bulgarians (consumers). The electricity system is the blood circulation system of the economy and we cannot afford mistakes,» Kovachev said. Under a sell-off strategy approved by Parliament, the seven power utilities were grouped in three packages, each of which has annual electricity sales of some 8 billion kilowatt hours, and will be sold through three two-stage public tenders. So far, Russia’s national power utility UES and the Czech Republic’s state-run CEZ have said they could bid, while industry sources say that Italian energy group Enel is also interested. There is a deadline for submitting indicative bids set for January 30 next year, the sell-off agency’s Executive Director Ilia Vassilev said. The agency will then announce which bidders will be allowed to place final offers. The strategic investors that can participate should have equity capital of at least 700 million euros last year, annual power sales of 7,000 gigawatts in 2002, investment-grade credit rating and at least a 5 percent share in another partially liberalized power market.