ECONOMY

Bulgarian plant launch

GALABOVO, Bulgaria (Reuters) – US energy firm AES launched yesterday the construction of a $1.4 billion (1.08-billion-euro) coal-fired power plant in Bulgaria, the Black Sea state’s largest investment since the 1989 fall of communism. The long-delayed project is key for Southeast Europe’s leading power exporter to replace lost energy capacity as it shuts down reactors at its Soviet-era nuclear power plant ahead of planned 2007 EU accession. The 670-megawatt plant in the southeastern Maritsa lignite coal complex will maintain energy exports and boost the foreign investment Bulgaria needs to counter its wide balance of payments deficit. «This is Bulgaria’s biggest foreign investment in the last 15 years,» Economy and Energy Minister Rumen Ovcharov told journalists at a groundbreaking ceremony attended by traditional Bulgarian dancers in colorful costumes. «With this, we are sure to reach the government’s goal of 3 billion euros in foreign direct investment this year,» he said. The project is expected to create over 2,000 jobs during construction and another 300 once it comes on line in 2009. AES said in the prospectus that the plant will meet EU environmental standards and 95 percent of harmful substances will be removed from its emissions once it is working. AES will provide around 30 percent of the financing for the construction, which will be carried out by French contractor Alstom. It has signed agreements to obtain the rest from ING Bank, Calyon Bank, BNP Paribas and a 12.5-year debt facility worth 105 million euros from the European Bank for Reconstruction and Development. The plant is the first large generator to be built in the country in two decades. It will operate for 40 years. AES has also signed a 15-year power purchase agreement with Bulgaria’s dominant utility NETC and will supply the plant with coal from the Maritsa mines. The project was originally agreed upon in 2001, but stalled due to a difficult global climate for securing financing for energy projects. AES finally sealed the contract last December. Bulgaria’s 10,000 megawatts of total installed power capacity will be dented at the end of this year when it shuts down two 440-megawatt reactors at its Kozloduy nuclear plant.