The construction of Gorna Arda hydropower project in southern Bulgaria is likely to be resumed in the autumn, a local daily reported, citing insiders.

The news comes as Austria’s energy firm EVN and Bulgaria’s dominant state power utility NEK are expected to sign an agreement for the project in the framework of the visit of Prime Minister Boyko Borisov in Vienna, starting Monday.

Construction works at Gorna Arda site will most probably start a few weeks after the signing of the contract, Standard daily reported.

The report echoes the forecast of Vladimir Urutchev, MEP from the ruling GERB party, who said a month ago that the hydro-power project construction will get underway again in the autumn.

He warned however that the pace of the construction works may be slow at the beginning due to the economic crisis and credit drought.

Austria's Alpine Bau withdrew from the construction of Gorna Arda hydropower project in the middle of May, leaving energy firm EVN the sole partner of the majority owner, dominant state power utility NEK.

Austria's EVN, which holds a 67% stake in one of Bulgaria's three power distributors and serves clients in Southwestern Bulgaria, has assured that the shareholders overhaul will not delay the project and promised that it will press for speeding it up in a bid to secure green energy for its clients in the region.

At the beginning of September 2009, Bulgaria’s new government sealed a letter of approval for the construction of the hydro power project on the Arda river, known as Gorna Arda (“Upper Arda”).

This was a requirement for wrapping up of the sale of a 30,1% stake, owned by Turkey's CCG, part of the Ceylan conglomerate, to an Austrian consortium of EVN and Alpine Bau.

The move was made after a trial in the International Court of Arbitration, in which Ceylan Holding filed claims for EUR 75 M against the other member in the joint venture - Bulgaria's National Electric Company NEK, was suspended for three months.

The Turkish company was contracted to implement the project under an electricity-for-infrastructure swap deal Bulgaria and Turkey signed in 1998, during the term of the government of Ivan Kostov. 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. It is planned to have an electricity production capacity of 160 MW.

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