BNP Paribas Loan Caused Huge Losses to Bulgaria Power Co, Probe Finds
Bulgaria’s state power utility has suffered more than BGN 36 M of losses due to the loan deal with BNP Paribas for the nuclear power plant project at Belene, an official check has shown.
The financial loss incurred to NEK amounts to 36,5 levs and is a result of the unreasonably risky financial transaction the company signed with BNP Paribas, the Public Financial Inspection Agency (PFIA) announced on Wednesday as it wrapped up its probes over the second quarter of the year.
The Socialist-led government, headed by Sergey Stanishev, hired in 2007 BNP Paribas SA to arrange a EUR 250 M loan, assess the financial risks and prepare tenders to select banks for funding the project at the Danube river town, whose price tag towered from EUR 4 B to EUR 10 B.
NEK's poor results, triggered by a fall in power consumption, however forced it to breach the conditions on the loan, making it callable.
BNP Paribas SA, France's largest bank by market value, ditched the project in February 2010.
Earlier this year Bulgaria's state energy holding company, which groups the country's top energy assets, launched a procedure for seeking a EUR 250 M loan.
After that the company tapped international markets, aiming to issue EUR 250 M worth of bonds.
Part of the raised money are expected to be used to refinance the existing debt to BNP Paribas for the nuclear power plant project at Belene.
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