The Bulgaria 2009 Review: Energy

Business » ENERGY | Author: Milena Hristova |December 30, 2009, Wednesday // 07:54| Views: | Comments: 0
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Bulgaria: The Bulgaria 2009 Review: Energy Russian Energy Minister Shmatko (left) and his Bulgarian counterpart Traikov (right) during the bilateral energy talks in Sofia in December. Photo by BGNES

Bulgaria, Russia Start Talks for New Gas Supply Contract

Bulgaria and Russia are starting negotiations for a new long-term gas supplies agreement at the beginning of 2010.

This became clear December 24 during the conversations between the Bulgarian Economy and Energy Minister, Traicho Traikov, and his Russian counterpart Sergei Shmatko, Bulgarian National Radio reported.

Traikov left for Moscow unexpectedly a day earlier on a trip which had not been announced in advance. The specific reason for his rush to Russia was not revealed.

Traikov and Shmatko have also discussed the plans for the construction of the South Stream gas pipeline.

The talks for a new, long-term contract for supplies of Russian natural gas to Bulgaria are going to start in January or February 2010.

Russian Minister Shmatko has pointed out that some of the bilateral contracts in this field expire in 2010, and stressed that Russian energy giant Gazprom was going to make some new good offers to Bulgaria, and that a new agreement would be reached that would make the process of providing gas transparent.

The Bulgarian demand that all intermediaries be removed from the gas supply process will also be discussed during the upcoming negotiations.

The specific talks about the construction – specifically, about the project agreement and preliminary survey – of the South Stream gas pipeline on Bulgarian territory will also start in 2010.

Bulgaria Goes Ahead with Belene Nuclear Project

After nearly six months of hesitating whether to abandon or push ahead with the planned Belene nuclear power plant, the new Bulgarian government announced the tender for a consultant to help it decide how to proceed and attract new investors for the planned Belene nuclear power plant will be invited at the end of January.

Earlier in December Germany's Siemens, whom Bulgaria's previous Socialist-led cabinet contracted to build Belene nuclear power plant, handed its technical-economic offer to its partner Russia's Atomstroyexport.

Bulgaria's new centre-right government, which has put the 2,000 megawatt Belene under review due to rising costs, came up with the idea to hire a new consultant after German utility RWE walked out of the project due to funding problems and Sofia decided to redesign it in the next year to attract new investors.

Russia's state nuclear company Rosatom announced in December that it is ready to finance the multi-billion nuclear project in the Bulgarian Danube town of Belene, which has stalled over lack of funding.

This was Russia's second offer to pour money into Bulgaria's second nuclear plant Belene after Russian Prime Minister, Vladimir Putin, gave the green light to a EUR 3,8 B loan at the end of May.

Bulgaria's new government of the center-right GERB party has said however that it is not willing to provide any state guarantees for loans and is yet to decide whether to scrap or push ahead due to purely economic terms.

RWE's departure from Bulgaria's new Belene nuclear plant put extra pressure on government to find new shareholders while it redefines the scope of investment it needs.

The new governmen plans to cut its shares in the project from 51% to 20-30%, which will still allow the country to keep its blocking quota.

Belene's reactors are to be of the Russian VVER-1000 class, while the Western companies are providing instrumentation and control systems. State power utility NEK has a majority stake in the plant.

Russia Wants to Invest in JV for Bulgaria Nuclear Plant Belene

Russia is ready to invest in the joint-stock company for the creation of Bulgaria’s second nuclear power plant at Belene.

This was made clear December 11 at a news conference in Sofia by Russian Energy Minister Sergei Shmatko, who participated in the 13th meeting of the Intergovernmental Bulgarian-Russian Commission for Economic, Scientific and Technical Cooperation.

“The Russian Federation was ready to provide a credit for the execution of the Belene NPP project but this is a hard thing to do now in the state of economic crisis. In the present situation, it seems rather hard to secure state funding. In spite of that, we are interested in the realization of this project, and are having a dialogue in order to find just corporate solution that would guarantee the construction of the nuclear plant, with the Russian Federation considering the opportunities for financial aid for the project,” Shmatko declared.

He has confirmed the interest of the Russian side in becoming a part of the joint-venture for constructing the Belene NPP.

Bulgaria’s Minister of Economy, Energy, and Tourism, Traicho Traikov, stated that the Bulgarian government want to turn the Belene nuclear plant project into one which “can happen.”

“The interest of our nation is to attract additional investors to the project, and the interest of the Russian side is to make the project happen, and therefore the participation in a joint-stock company is an option which is not ruled out,” Traikov said.

He explained that through the “appropriate structuring of the Belene deal in one or several phases” it could reach a form in which it corresponded with the vision of the Bulgarian government.

Sarkozy Offers Help for Bulgaria's Nuclear Plant Belene

French President Nicolas Sarkozy vowed on October 12 cooperation for the construction of Bulgaria's planned second nuclear power plant on the Danube, which has hit funding problems.

This was announced by Bulgarian Prime Minister Boyko Borisov after a meeting with the French president as he started a two-day working visit to France on October 12 2009.

"We are looking for European partners to make sure that the money that has been invested so far in the project does not go down the drain,” Borisov told journalists after the meeting.

In his words the French President has been impressed with the speed at which Bulgaria's nuclear sector is developing.

Sarkozy has reiterated the commitment of France's Prime Minister Francois Fillon to hold talks with French companies, potential investors in Bulgaria's planned second nuclear power plant in the town of Belene.

"Why do you say you are breaking up with Russia, if everything has been produced there?", Sarkozy asked Borisov, referring to the Russian participation in the project and the two Russian-designed 1000MWe units.

Bulgaria's new center-right government has launched a review of Belene, questioning the need for new power capacity in Bulgaria as well as costs which it said could reach EUR 10 B.

Bulgaria Belene Project Maintenance to Cost EUR 200 M a Year

The nuclear project in the Bulgarian Danube town of Belene, which has stalled over funding problems, will need EUR 200 M to be maintained, according to the head of the holding, which groups the country's top energy assets.

"Now it is not a good time for suspending the project, it should be sustained even though with minimum of funds," Boris Pekov, chairman of the Board of Directors of the Bulgarian Energy Holding and executive director of the state enterprise “Radioactive waste” said on November 5.

According to Pekov freezing the project will also cost money. He assured that Russia's Atomstroyexport, which was contracted to build the two 1 000 megawatt reactors, has not yet claimed damages for the delay in the project.

The expert warned that the criteria for a new strategic investor should be selected very carefully, which clear requirements and realistic expectations.

Nabucco Project Gets to Ratification Stage in Bulgaria

Bulgaria’s government decided in December to table the international agreement on the construction of the Nabucco gas transit pipeline to Parliament for ratification.

The international agreement for Nabucco was signed by representatives of Austria, Bulgaria, Hungary, Romania, and Turkey on July 13, 2009, in Ankara.

The Nabucco consortium is comprised of six energy companies with a share of 16,66% each – Bulgargaz (Bulgaria), Botas (Turkey), MOL (Hungary), Transgaz (Romania), OMV (Austria), and RWE (Germany).

Bulgaria, in which the pipeline from Caspian gas fields is to enter the EU, holds a 16.5 % stake in the EUR 8 B project.

The Nabucco pipeline is planned across Azerbaijan, Georgia, Turkey and Bulgaria, its construction executed by a consortium of firms from EU nations - Germany, Austria, Hungary, Romania and Bulgaria - as well as Turkey.

The project is the EU's attempt to diversify sources and reduce dependency on Russia.

Joschka Fischer: Next Year Crucial for Nabucco

European Union's Nabucco gas pipeline project will play an important role for Bulgaria's future and the coming year will be crucial for it, former German foreign minister Joschka Fischer said in Sofia at the beginning of November.

Fischer, now an adviser for partners in the Nabucco consortium, the German and Austrian energy giants RWE and OMV, arrived in Sofia to discuss the project with Bulgarian Prime Minister Boyko Borisov and other officials.

"I am keen on drumming support for Nabucco because Europe will need more and more gas," he said, but downplayed the rivalry between Nabucco and South Stream, neither of which has moved into the construction phase.

Asked about the potential providers of gas, Fischer singled out Northern Iraq, as well as Azerbaijan and Turkmenistan.

"The project should be implemented step by step so that we can be absolutely sure that these countries will agree to provide gas," he added.

Following his meeting with Fischer, Bulgaria's Energy and Economy Minister Traycho Traykov said the country has no plans to pull out of the project.

According to the minister the Bulgarian state has to secure EUR 300 M for the completion of the project.

Bulgaria's officials have made it clear that the government assigns great importance to the European Union's Nabucco gas pipeline project and it will be given a higher priority over Moscow's rival plan.

Russia, Toshiba Said to Eye New Unit at Bulgaria's Kozloduy N-Plant

Japan's Toshiba Corp. has reportedly voiced its interest in the building of a seventh unit at Bulgaria's Kozloduy nuclear power plant, the closure of which was one of the conditions for the country's EU accession.

Representatives of the company are expected to visit Bulgaria this week to launch the negotiations, local Klasa daily reported, citing sources from the government.

Toshiba holds a 67% stake in the American Westinghouse Electric Company, which builds nuclear power generator units. During their visit to Bulgaria the company representatives are expected to propose the building of Westinghouse Electric Company's AP1000, a Generation III+ reactor, on the site of the nuclear power plant.

Bulgaria's new center-right government of GERB party announced at the end of November that it is considering the construction of a new 1 000 MW nuclear unit at Kozloduy Nuclear Power Plant.

Earlier this month Russia officially voiced its interest in the building of a seventh unit at Bulgaria's Kozloduy nuclear power plant after Special Envoy of the United States Secretary of State for Eurasian Energy, Richard Morningstar, made it clear that American companies are likely bidders in nuclear energy projects here.

Experts have commented that the participation of American companies will ease Russia's grip on Bulgaria's energy sector.

Bulgaria's only nuclear plant Kozloduy has two 1,000 MW operating units left since the closure of Soviet-designed reactors 1 to 4 was one of the conditions for its entry in the European bloc.

Hit worst by the current Russia-Ukraine gas dispute at the beginning of the year, Bulgaria was poised to restart one of the nuclear reactors at its Kozloduy nuclear power plant, but abandoned the idea when faced with Brussles' vehement opposition.

Brussels Oks Bulgaria Nuclear Decommissioning Aid

The European Commission proposed on October 27 the allotment of EUR 300 M in additional compensations over four years to Bulgaria for the closure of Soviet-designed reactors 1 to 4 at Bulgaria's Kozloduy nuclear power plant.

"This investment in a safer and more sustainable Bulgarian energy network illustrates our desire to see Bulgaria fully integrated into the common European energy market," European Commission President Jose Manuel Barroso said in a statement.

Over the last ten years Bulgaria has received a total of EUR 550 M in compensation for the closure of four units at Kozloduy that had been deemed unsafe, but the government hopes to receive EUR 300 M more under Europe's recovery plan.

Bulgaria's previous Socialist-led government first called for additional money a year ago and went as far as to ask Brussels to compensate the country for the double blow of the gas crisis and the global economic slowdown by allowing a restart of the units.

The European Commission however has been adamant that a relaunch of the Soviet-era reactors at Bulgaria's sole nuclear power plant is out of the question.

The plant, which has been operating since 1974, has raised safety concerns, and Bulgaria agreed to shut four of its reactors as a condition of joining the EU.

Bulgaria Backs Double Capacity of Russian South Stream Pipeline

Bulgaria supported on December 11 increasing twofold the capacity of the planned Russian-sponsored gas transit pipeline “South Stream”.

This was stated at a news conference in Sofia by Bulgaria’s Minister of Economy, Energy, and Tourism, Traicho Traikov, who participated in the 13th meeting of the Intergovernmental Bulgarian-Russian Commission for Economic, Scientific and Technical Cooperation together with Russian Energy Minister Sergei Shmatko.

Traikov said Bulgaria has received the detailed explanation it required with respect to the proposal of the Russian side from increasing the capacity of the South Stream gas pipeline from 31 billion cubic meters to 63 billion cubic meters per year.

In his words, in its consultation with other EU countries Bulgaria was going to support the idea for declaring South Stream an object of European-wide significance.

He explained that Bulgaria and Russia were starting negotiations at the corporate level for hammering out all aspects of the bilateral relations with respect to the supplies and transit of natural gas.

Russia's Gazprom Gets 51% of Serbian Section of South Stream

Russia and Serbia signed several cooperation agreements on October 20 including a deal on the South Stream gas transit pipeline.

The documents were signed by the two Presidents, Dmitry Medvedev and Boris Tadic, in Belgrade, ITAR-TASS reported.

Russia’s energy giant Gazprom and Srbijagaz signed a protocol on the Serbian section of the South Stream pipeline. According to the protocol, the two sides are expected within 30 days to seal the creation of their joint company South Stream Srbija, which is going to be in charge of the planning, construction, and operation of the South Stream pipeline on Serbian territory.

Under the deal, Gazprom gets a 51% share of the joint company, and Srbijagaz gets 40%.

The two gas companies also signed an contract for the setting up of a joint company for creating a natural gas storage facility, “Banatski Dvor”. Here the Russians get a 51% share as well.

In addition to the energy deals, Russia and Serbia also signed agreements on warning against natural disasters, and on cultural, educational, and sports cooperation for 2009-2011.

Russia signed its South Stream deal with Bulgaria in January 2008 during the visit of former President Putin to Sofia. Gazprom has a share of 50% of the Bulgarian section of the South Stream pipeline, and so does the Bulgarian energy company

Bulgaria Eco Assessment Confirmed as Key for Fate of Russia Oil Pipeline

The assessment of the environmental impact of the planned Burgas-Alexandroupolis oil pipeline will be the key factor for deciding whether to go ahead with the project.

This was made clear December 11 by Bulgaria’s Minister of Economy, Energy, and Tourism, Traicho Traikov, who gave a special press conference in Sofia together with the Russian Energy Minister, Sergei Shmatko, after the 13th meeting of the Intergovernmental Bulgarian-Russian Commission for Economic, Scientific and Technical Cooperation.

Traikov said the environmental assessment to be prepared by the Bulgarian Environment Ministry must become the framework for the future decision on whether the project would be executed at all.

“There is no way that we can have a negative environmental assessment, and can also realize the respective project,” Traikov declared.

Russian Energy Minister Shmatko said in turn that the Russian side had understanding for the need for a sufficiently in-depth environment assessment of the project, including in order to answer the questions and concerns of the citizens of the Bulgaria’s Burgas region.

“The project will not be frozen, and we are going to cooperate on it in the future. We have agreed on the execution of a number of corporate procedures including the environmental assessment,” Shmatko said.

Bulgaria PM to Make Public Burgas-Alexandroupolis Contract

Bulgaria's prime minister vowed December 6 to publish the contract for Burgas-Alexandroupolis oil pipeline, signed by the previous government, in a bid to prove how unprofitable and damaging it is for the country.

"The contract is not profitable for Bulgaria and does not protect its national interests," Boyko Borisov said in the coastal town of Burgas, adding that its clauses do not allow any of the partners in the project to withdraw.

Asked whether technical corrections can be made in the contract, Borisov said that efforts are being made to this end by a number of officials, including Economy and Energy Minister Traicho Traikov during his visit in Greece.

"We have been holding talks with the other two countries – Greece and Russia, but unfortunately the contract makes it possible only for Bulgaria to breach it," he explained.

In his words Bulgaria is the only country, for which Burgas-Alexandroupolis is nothing more than an infrastructure project, unlike Russia and Greece, which can pile up big profits out of it.

After it took office in July 2009, Bulgaria's new center-right government of the GERB party made it clear it was going to reconsider the country's participation in the three large-scale energy projects - South Stream gas pipeline, Burgas-Alexandroupolis oil pipeline, and Belene Nuclear Power Plant.

Three Bulgarian Black Sea municipalities - Burgas, Pomorie, and Sozopol - have voted against the pipe in local referendums over environmental concerns.

Municipalities neighboring Pomorie and nearby Burgas are also harboring fears that the pipeline could damage their lucrative tourism business, while environmental NGOs have branded the existing plans to build an oil terminal out at sea a disaster waiting to happen.

Bulgaria, Greece and Russia agreed to build the pipeline between Burgas and Alexandroupolis, taking Caspian oil to the Mediterranean skirting the congested Bosphorus, in 2007 after more than a decade of intermittent talks.

The agreement for the company which will construct the Burgas-Alexandroupolis oil transit pipeline was signed by Bulgaria during Russian President Putin's visit to Bulgaria in 2008.

The 280-kilometer pipeline, with 166 kilometers passing through Bulgaria, would have an initial annual capacity of 35 million tonnes, which could be later expanded to 50 million tonnes. Its costs are estimated at up to USD 900 M.

It is expected to be completed by the end of 2011 or beginning of 2012.

Russia Refutes Claims of Striking off Burgas-Alexandroupolis

Russia did not strike off the “Burgas-Alexandroupolis” oil pipe line project, the Russian “Transneft” declared Thursday.

The Deputy President of the company, Mihail Barkov, said in an interview for the Bulgarian National Television (BNT) that the oil line through Bulgaria can exist without interfering with the “Samsun Djeihan” one in Turkey.

“Transneft” declined to comment on the publications in the “Russian daily “Novaya Gazeta” about the annulment of the project, but Barkov confirmed “Burgas-Alexandroupolis” is not going to be halted and is progressing according to schedule. He pointed out the Russian oil will be sufficient to fill both pipes – trough Bulgaria and Turkey.

Germany's PowerWind Commissions Wind Turbine off Bulgaria Coast

German wind turbine manufacturer PowerWind has commissioned at the beginning of December a 900 kW wind turbine five kilometres away of the Black Sea coast, in Hadzhi Dimitar, near the Bulgarian city of Kavarna.

"We wanted a state-of-the-art wind turbine that delivers maximum yield for our Bulgarian sites. The PowerWind 56 turbine was exactly that," Lyubomir Nikolov, Manager of the customer Milenium Group, commented as cited by the Power Engineering Magazine.

In addition to the exacting demands on technology and quality, it was important to Milenium Group to partner with a company committed to high standards of customer proximity:

"We were particularly impressed with the around-the-clock availability and flexibility of PowerWind during the project phase. They assisted us whenever we needed their help."

PowerWind is currently conducting sales talks with other customers from Bulgaria and expects to receive follow-up orders in the coming months.

In preparation for additional orders, PowerWind has already reached a service cooperation agreement with the experienced Bulgarian service provider ABC.

This will guarantee that PowerWind can give the best possible service to all customers in Bulgaria.

EC Approves Financial Aid for Nabucco, Bulgaria Gas Pipe Link

The European Commission approved December 4 the requested financial aid for construction gas pipeline connections from Bulgaria to Greece and Romania.

This has been announced Friday night by the Bulgarian Ministry of Economy, Energy, and Transport.

Thus, the Commission has approved the granting of EUR 45 M for the construction of a connection between the natural gas systems of Bulgaria and Greece. Another EUR 9 M will be allocated to the construction of a similar gas pipeline.

In addition, the EC has also proved in favor of a setting aside EUR 200 M to back the Nabucco gas transit pipeline.

The EC decision will be considered on December 7, 2009, the Council of Energy Ministers is supposed to approve the sums.

The initiative to connect Bulgaria's natural gas transport network to its neighbors received a boost as a result of the January 2009 Russia-Ukraine gas crisis when the cutoff of Russian gas supplies exposed the fact that Bulgaria had gas pipe connections only to Russia (and Turkey, which, however, is not a supplier but a receiver of Russian gas through Bulgarian territory) and there was no way its neighbors could aid it in the respective situation.

The EU has promised funding for construction gas pipeline links between Bulgaria and Greece and Bulgaria and Romania as a measure designed to increase EU energy security.

The Bulgarian government has recently announced plans to establish a similar connection to Serbia.

Bosch Plans Invasion of Bulgarian Renewable Energy Market

Bosch Group, the German global supplier of technology and services, plans to enter the Bulgarian market for renewable energy.

The company will also focus on the distribution of energy-saving solutions for heating and cooling of natural gas, an area where considerable quantities of carbon gases may be saved.

Bulgarian State Lists Power Utility Stake on Stock Exchange

Bulgaria's new center-right government plans to list on the Stock Exchange its stake in the electricity distribution companies CEZ, ЕОN and EVN.

This was announced on December 4 by Energy and Economy Minister Traicho Traikov at a press conference as he rolled out the strategy for the management of the state-owned stake in the three companies.

Following the privatization, the state owns a 33% stake in each of them. The plans are for these stakes to be combined in a separate state-owned company, which will be listed on the Stock Exchange.

The government has been voicing plans to list shares of the energy holding, which groups the country's top energy assets, on the Stock Exchange for a few months already, but the details have remained nebulous.

No agreement has been reached on the goals that turning the holding into a public company will pursue.

Initial plans have been for between 10% and 15% of the capital of companies to be listed on the Stock Exchange.

Bulgaria Energy Holding to Be Listed on Stock Exchange after 2010

Bulgaria's new center-right government announced in November plans to list on the Stock Exchange shares of the Bulgarian Energy Holding, which groups the country's top energy assets, at the end of 2010 at the earliest.

The government has been voicing plans to list shares of the energy holding or its subsidiaries on the Stock Exchange for a few months already, but the details have remained nebulous. No agreement has been reached on the goals that turning the holding into a public company will pursue.

Initial plans have been for between 10% and 15% of the capital of companies to be listed on the Stock Exchange.

The previous Socialist-led government set up the mega-structure last year in a bid to strengthen the country's' position on the European power market and manage major energy projects Bulgaria has committed to, including Belene nuclear power plant, Nabucco and the South Stream gas pipelines.

The holding was created with the merger of five state-owned companies - the National Electric Company NEK, the gas monopoly Bulgargaz, the Maritza Iztok Mines, the Maritza Iztok 2 Thermal Plant, and the Kozloduy Nuclear Power Plant into a EUR 4 B energy giant.

It is a sole owner joint-stock company with a 100% Bulgarian state ownership.

The new center-right government of GERB party, which swept the July general elections, has subjected the Bulgarian Energy Holding to financial checks to find out how the money poured into it for raising its capital has been used.

At the end of August it announced plans to dissolve the mega-structure only to abandon them a few months later.

Bulgaria, Azerbaijan Seal Natural Gas Supplies JV Deal

Bulgaria and Azerbaijan signed on November 13 an agreement for cooperation in the energy field as President Ilham Aliyev paid a working visit to Sofia at the invitation of his Bulgarian counterpart Georgi Parvanov.

Earlier in the week Bulgaria’s Minister of Economy, Energy, and Tourism, Traicho Traikov, announced that Bulgaria’s state-owned gas operator Bulgartransgaz, a subsidiary of Bulgargaz, and the Azerbaijan state gas company GNKAR are going to set up a joint venture.

The Bulgaria-Azerbaijan joint company is going to explore the possibilities for the delivery of natural gas from Azerbaijan to Bulgaria, including as both finding supplies for the quota of natural gas that Bulgaria will be entitled to receive through the Nabucco gas transit pipeline, and for the transit of compressed natural gas with tankers through the Black Sea.

If the project is realized, Bulgaria will not have to participate in the construction of a liquefied natural gas terminal.

As a result of the January 2009 Russia-Ukraine gas crisis, the Bulgarian authorities considered pushing for the setting up of such a terminal in Greece or Turkey in order to diversify the country’s gas supplies.

Gazprom Confirms New Russia-Ukraine Gas Crisis Averted

Russian energy giant Gazprom confirmed November 6 that Ukraine had paid in full for the natural gas it received from Russia in October.

Ukraine’s Prime Minister, Yulia Tymoshenko, announced that the country had found the money to pay for the Russian gas supplies.

Her statement came after Russian PM Vladimir Putin warned of a potential termination of the supplies over Ukraine’s failure to pay; days later the Ukrainian company Naftogaz admitted it had trouble securing the funds. This has fueled fears in the EU about a repetition of the January 2009 gas crisis, which left many EU countries without Russian gas in the middle of the winter.

The Russian newspaper Komersant reported Monday that Moscow had submitted to the EU a draft of an early-warning energy memorandum, which it hopes will be signed during the EU-Russia meeting in Stockholm on November 18, 2009.

The document envisages a joint action plan in case Russian gas supplies for Europe are compromised by transit countries who divert them – something of which Russia has been accusing Ukraine.

Go-Ahead for Bulgaria Gorna Arda Hydro Project

Bulgaria's new government sealed a letter of approval for the construction of the long-delayed hydropower project at Gorna Arda river, the energy and economy minister announced on September 2.

The move is a requirement for the wrapping up of the sale of a 30.1% stake, owned by Turkey's CCG, part of the Ceylan conglomerate, to an Austrian consortium between energy firm EVN and construction company Alpine Bau.

Ceylan Holding is expected to withdraw its claim for EUR 75 M in damages that it filed with the International Court of Arbitration against the other member in the joint venture - Bulgaria's National Electricity Transmission Company NEK.

The Turkish company was contracted to implement the project under an electricity-for-infrastructure swap deal Bulgaria and Turkey signed in 1998. The launch of the hydropower construction was delayed after the Turkish company ran into financial troubles.

The Gorna Arda hydropower project is expected to cost around EUR 500 M, which should be paid by the consortium.

Spanish Company to Invest Big in Renewable Energy in Bulgaria

Spanish company “Electra Holding” unveiled in December plans for investing about EUR 650 M in renewable energy in Bulgaria by 2012.

The company’s plan to enter the Bulgarian market has been presented in Sofia by its CEO Jose Oskar Leiva Mendez.

Electra Holding is going to focus on investments in wind and solar energy, energy production from biomass, and mini hydraulic energy.

So far Electra Holding has purchased three projects in Bulgaria – for the production of biodiesel and energy from biomass in Northern Bulgaria, and for wind power parks with a total capacity of 480 MW in Southern Bulgaria.

The planned investments of EUR 650 M in renewable energy production are going to lead to the creation of 700 jobs in the sector. Part of the funds will be raised through listing the company on the Spanish stock exchange.

Electra Holding already has operations in Spain, Romania, and Mexico, and is considering projects in Greece and Croatia.

Melrose Production to Surge on New Bulgarian Fields

Edinburgh-based oil explorer Melrose Resources is on track to produce 40,000 barrels of oil a day in 2010 as it brings two new Bulgarian gas projects on stream, it announced on December 20.

The FTSE 250 company was Bulgaria's largest producer of domestic gas for several years until 2008, when its Galata field in the Black Sea was exhausted. Most of the country's supplies come from Russian giant Gazprom.

Next year, Melrose plans to spend USD 51 M bringing the Kavarna and Kaliakra fields into production in July and October. This move is expected to restore its Bulgarian production to 2007 levels.

The group said that it was still hopeful of signing off a gas storage agreement with the national government, a potentially lucrative deal that would pump gas into the now disused Galata field during periods of low demand.

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