Bulgaria’s energy sector is in a state of financial collapse and in need of urgent and adequate measures, according to Minister Temenuzhka Petkova.

Petkova warned in a Sunday interview for the Bulgarian National Radio that rescuing the energy sector, and therefore the entire economy, could require unpopular steps.

Bulgaria’s Energy Minister pointed out that the financial stabilization of the sector was the first task on the agenda.

She said that the government had signed a memorandum of understanding with the two US-owned thermal power plants, AES-3C Maritza East 1 and ContourGlobal Maritsa East 3, on the renegotiation of the prices stipulated in the long-term contracts with the two TPPs.

Petkova specified that the terms of the contracts were to be renegotiated by end-March, adding that Bulgaria had to come up with a solution for the settlement of arrears of over BGN 600 M of the state-owned power supplier National Electric Company (NEK)to the two TPPs in the meantime.

She underscored that NEK also owed over BGN 1.2 B to power producers.

Petkova went on to say that a bill introducing amendments to the Energy Act had passed second reading at the parliamentary energy committee on Thursday.

She informed that the legal changes were aimed at shrinking the deficit at NEK and involved changes to the energy mix.

Petkova declared that Bulgaria had already achieved its national renewable energy production target.

She argued that the liberalization of the energy market was essential to solving a number of problems in the sector.

“The liberalization of the market will bring transparency in the sector and each and every household in Bulgaria will be able to pick their power supplier,” she stated, adding that the government had concentrated its efforts on this goal.

She made clear that the Bulgarian Energy Exchange had been issued a license by the State Commission for Energy and Water Regulation (DKEVR) and the authorities were now working on the selection of the platform, meaning that the liberalization could be completed by the end of 2015.

Petkova stressed that ensuring competition in the sector was essential, adding that the government would do its best to prevent price hikes for consumers as a result of the liberalization of the market.

She reiterated Bulgaria’s support for the establishment of an EU Energy Union, adding that it was expected to boost energy independence and competition.

Petkova also explained that Bulgaria had not yet received any official statement on the part of Gazprom concerning the South Stream gas pipeline project and it was therefore too early to comment on any developments concerning the so-called Turkish Stream project.