GORUBLYANE, Bulgaria – Bulgarian firms should cut the amount of energy they waste if they are to handle increased competition after the poor Balkan state’s planned EU entry in 2007, the European Bank for Reconstruction and Development (EBRD) said yesterday. Rich in lignite, the Black Sea country of 7.8 million is the region’s biggest power exporter and the fourth largest in Europe but is also the least energy efficient, using twice the Western European average for each unit of GDP produced. «Having a market economy brings more competition,» Jean Lemierre, president of the EBRD, said ahead of a conference on attracting investment to Southeastern Europe in Sofia. «One of the best ways to increase competitiveness is through energy efficiency.» The EBRD has launched a battery of loans through local banks to help Bulgarians wean themselves off of wasteful energy habits left over from when they had cheap, plentiful and often dirty energy in the Soviet era. They include financing for double glazing, heat pumps and other innovations for home and business owners like Dimitar Dobrev, who not long ago was wondering how his bakery would fare against richer Western firms after EU accession. For 600,000 euros, he switched his production line to gas from electricity, slashing energy costs by 85 percent and saving 134,000 euros a year – a sum that could pay almost 70 workers at average wages for the same period. And although the bakery, located on the gritty outskirts of Sofia, may still lack the shine and sparkle of its Western counterparts, Dobrev now says he has a chance to compete. «We have still a lot to do to reach the level of Western European companies, but we are doing all we can,» he said. Surveys consistently show that less than a quarter of Bulgarian companies see themselves ready to compete in the EU, with many citing high energy bills as a main problem. Last month, Bulgarian power utility NETC announced it would start cutting electricity supplies to its largest steel mill Kremikovtzi due to around $60 million (50 million euros) in outstanding debts. Other problems, such as high oil prices and patchy supplies – illustrated in January when Russia’s Gazprom cut supplies to central and Eastern Europe over a price row with Ukraine – highlights the need to cut consumption, analysts said. «The basic rule is communist-era monsters and non-foreign investment related companies are less energy efficient and less productive. The new ones are better,» said Krassen Stanchev, head of the Sofia-based Institute for Market Economics. «With oil prices, gas prices and the liberalization of the sector, obviously the incentive to modernize and save is clear.» Bulgaria is now scrambling to make up for a 9 percent drop in capacity as it prepares to shut down two 440-megawatt units at its Kozloduy nuclear power plant ahead of planned EU entry. It aims to build the new 2,000MW nuclear Belene plant by 2011, while the US-based utility is also working to complete a $1 billion, 670MW coal-fired plant by 2008.