ECONOMY

Bulgaria to pick foreign investors for electricity distribution by July

SOFIA – Bulgaria will choose investors to take majority stakes in its regional power distributors by July, and will kick off several other major energy sector sales shortly after, Energy Minister Milko Kovachev said yesterday. Five firms are expected to bid for 67 percent in each of seven distributors by June 25 in the linchpin sell-off, which is key to the Balkan state’s plan to renovate its power sector ahead of joining the EU and its liberalized market in 2007. The government has not revealed how much it thinks the stakes, which are being sold in three packages, are worth, but similar deals in central and eastern Europe point to hundreds of millions of euros. «After the June 25 deadline, in a very short time, we expect the (winning) bids to be picked and the contracts to be closed,» Kovachev told Reuters in an interview. «We expect these deals to be finalized not later than July,» he said, adding that price would be the deciding factor on bids. The firms vying for the stakes are Italian energy firm Enel, German utility EON, the Czech Republic’s state-run CEZ, Greece’s state-run Public Power Corporation and Austrian utility EVN. Bulgarian media has valued the deals’ total worth at up to 600 million euros ($728.5 million), funds the government needs to cover its widening external imbalance and strengthen its role as a leading power exporter in the region. In a similar sale in 2002, Slovakia sold 49 percent and control in its three power distributors, which sell a comparable amount of electricity as Bulgaria’s seven regional utilities, to German and French energy majors for 618 million euros. Kovachev also said the government would open a tender for an adviser on the sale of three thermal power plants in 10 days. The three coal-burning generators, Varna, Russe and Bobov Dol, have installed capacity of around 2,000 megawatts, or just under 20 percent of the Balkan state’s total. «We might expect deals in the first half of next year,» Kovachev said. He would not estimate how much the government wanted from their sales. But analysts said, when compared to similar generators, they could be worth 80 million to 200 million euros altogether, although their age, need for environmental upgrades, and other factors, pointed to the low end of the scale. Kovachev also said he expected two other stalled generator refurbishment projects at the Maritsa East lignite coal complex to secure financial backing and to begin implementation by next year.