Bulgaria’s National Electricity Company (NEK) has signed agreements with US-owned thermal power plants AES Maritza East 1 and ContourGlobal Maritsa East 3 TPP under which it will pay BGN 1 B less to the TPPs over the next 10 years.

The agreements envisaging changes to the long-term contracts of state-owned NEK and the two TPPs were signed on Wednesday, according to the government’s press office, as cited by money.bg.

The two agreements were signed by the CEO of NEK Petar Iliev, Garry Levesley from ContourGlobal Maritsa East 3 TPP and Ivan Tsankov from AES Maritza East 1.

Wednesday’s ceremony was attended by Bulgarian Prime Minister Boyko Borisov and US Ambassador to Bulgaria Marcie Ries.

Under the agreements, NEK is granted a 17% discount on the purchase of available electricity quantities from ContourGlobal Maritsa East 3 TPP and a 14% discount on the purchase of available electricity quantities from AES Maritza East 1.

As a result, NEK will reduce its expenses by BGN 100 M a year until the expiration of the contracts.

At the same time, NEK will have to settle debts to the TPPs of around BGN 700 M by June.

Bulgaria’s Energy Minister Temenuzhka Petkova explained Wednesday that the Bulgarian Energy Holding (BEH) would take out a loan for the purpose, adding that it would most probably be backed by government guarantees.

She said that talks were underway with banks on the matter.

Petkova specified that no extension of the agreements had been negotiated.

The representatives of the two TPPs said that they were satisfied with the agreements and that they had shown understanding for the current economic situation in Bulgaria.

Borisov thanked the two sides for the agreements and praised the effort Petkova had put into the negotiations.

Asked whether electricity prices would change, Petkova said that the matter was within the competence of the Commission for Energy and Water Regulation (KEVR), adding that she would prefer for tariffs to remain unchanged so that the financial condition of state-owned NEK could improve.

Borisov said that talks were underway with producers of renewable energy and with power distributors to make sure that NEK would stop incurring losses in the new regulatory period from July 1, 2015.