Bulgaria Opposition Slams EVN Stake in Hydro Project

Business » ENERGY | September 3, 2010, Friday // 16:56
Bulgaria: Bulgaria Opposition Slams EVN Stake in Hydro Project The Gorna Arda hydropower project is expected to cost around EUR 500 M, which should be paid by the consortium. File photo

Bulgaria's left-wing opposition have harshly criticized an agreement under which Austrian utility EVN acquired a majority stake in the hydro project on the Arda river, known as Gorna Arda.

"This is just one more favor that Minister Traicho Traikov is doing for his former employer," Petar Kurumbashev, MP from the left-wing Coalition for Bulgaria, fumed in parliament on Friday, referring to the energy and economy minister, who served as an executive at the Bulgarian arm of Austrian utility EVN before joining the center-right government.

"How comes a 40% stake in a EUR 500 M project is worth EUR 1,4 M? What 's the price at which Bulgaria's dominant state power utility NEK lost its majority stake in the project, which is a matter of national interest?," Kurumbashev asked.

"Gorna Arda project has been assessed at EUR 500 M and its capacity is two times higher than the much discussed Tsankov Kamak," Kurumbashev said, referring to the hydro energy project that brought, Ahmed Dogan, leader of the opposition ethnic Turkish party MRF, into court over his sky-rocket fees.

The agreement for the construction of Gorna Arda hydropower project in southern Bulgaria, between Austria's energy firm EVN and Bulgaria's dominant state power utility NEK was signed during the visit of Prime Minister Boyko Borisov in Vienna in the middle of July. Under the accord EVN will own a 70% stake in the project.

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 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.

The Gorna Arda project was originally expected to be built by a JV of NEK (69.9%) and Turkish firm CCG, part of the Ceylan conglomerate.

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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Tags: NEK, Gorna Arda, EVN, Sergey Stanishev, CCG
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