Bulgaria Hopes to Break Ground of Delayed Hydro Project 2013

Business » ENERGY | April 27, 2012, Friday // 12:52
Bulgaria: Bulgaria Hopes to Break Ground of Delayed Hydro Project 2013 The Arda river nearby south-eastern Bulgarian town of Kardzhali. Photo by BGNES

The construction of the vastly troubled and long-delayed Bulgarian hydro power project on the Arda river in the south will most probably start in 2013, officials in Sofia say.

"We are now conducting a feasibility study and a tender to select a contractor for the engineering activities. Accordingly, construction works can be expected to start in 2013," Bulgaria's National Electric Company chief executive Ivo Lefterov said in an interview for Capital Daily.

Bulgaria has attached great importance to the project, saying the investment is crucial, especially in time of crisis and in an underdeveloped region of the country.

The joint project of the Austrian EVN, which is also one of the three power utilities in Bulgaria, and of the Bulgarian National Electric Company, NEK, is valued at EUR 500 M.

The investment is expected to create hundreds of new job openings in the region of the Eastern Rhodoppes.

In the summer of 2011 Austria's EVN approved a capital hike to boost its stake in the Bulgarian hydro power plant project Gorna Arda to 70%.

The takeover of a 70% stake in the vastly troubled Bulgarian hydro power project on the Arda river in the south from Turkish company Ceylan was expected in the first quarter of 2011, but fell through.

The project company for the construction of the 160 MW cascade was formed with a 70% of EVN and a 30% share of the Bulgarian National Electric Company NEK.

In July 2010, Austrian utility EVN signed a deal with Bulgaria's state power utility NEK to take a majority stake in the Bulgarian hydropower project.

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 2010.

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.

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.

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.

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Tags: Gorna Arda, EVN, hydro-power plant, NEK, Ceylan, Alpine Bau, Bulgaria, Bulgarian, Austria, Austrian

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