E.ON Left Bulgaria Due to Hostile Climate - Analysts

Business » ENERGY | December 3, 2011, Saturday // 16:35| Views: | Comments: 3
Bulgaria: E.ON Left Bulgaria Due to Hostile Climate - Analysts

German company E.ON has decided to shed its Bulgarian power utility E.ON Bulgaria due to an overregulated market and political attacks by senior government officials, according to Bulgarian comentators.

Saturday it was announced that E.ON Bulgaria is being sold to Czeck Energo Pro for EUR 133 M.

The decision to sell E.ON Bulgaria, which was announced earlier, most probably stems in part from the heavy regulation on the sector in the country, as well as criticisms to power utilities on the part of Bulgarian PM Boyko Borisov, writes Dnevnik.bg.

The site also mentions a new global strategy announced by E.ON last year, which includes moving away from "non-competitive markets" in Europe to more vital ones in Russia and South America.

In 2010, the Bulgarian State Commission for Energy and Water Regulation conducted an audit on the country's power utilities at the request of PM Borisov.

The audit check found that all three utilities - E.ON, CEZ and EVN - had irregularities in electricity price-formation and fined them.

E.ON entered Bulgaria in 2007 by paying EUR 140.7 M for 67% of the state power distribution companies in Varna and Gorna Oryahovitsa.

Czech company Energo Pro, which has now bought the business, specializes in hydro power production and electricity from other renewable energy sources.

It has a branch in Bulgaria, Energo Pro Bulgaria, which operates eight hydro power plants and is the largest hydro power producer in the country.

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Tags: hydro-power plant, hydro power, E.ON, network, power, utility, MRSK, German, Russian, Czech, Energo PRO, renewable energy, CEZ, EVN, Varna, Gorna Oryahovitsa, State Commission for Energy and Water Regulation, Boyko Borisov
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» To the forumComments (3)
Sveto - 5 Dec 2011 // 18:49:48

Ha ha, I'm not quite sure what exactly are the Germans thinking to be able to achieve in corrupt mafia Russia where Putin dictates everything, but good luck in the communist ridden South America. Talking from my experience they are about to find real soon hard awakening that would teach them a valuable lesson of greed. The next in line for a fine lesson are all the investors in China, but wait there is a moment for everything in life. In the mean time good luck again and safe trip to South America, ha ha ha!
-----> you the perfect one
Don't be naive. And stop repeating the same old used up clich?s. It is beginning to sound quite dated.

peterperfect - 4 Dec 2011 // 09:48:27

Over regulation stifles foreign investment, learn from this as, in these lean times, it is a lesson that should strike home, next time it could be a company closing with the loss of all the jobs. Not suggesting there should be no regulation but perhaps Bulgaria might look at other countries, west and east, to see if they do have too much regulation. As for interference by government which amounts to hassling, perhaps an investigation into the possibility of curruption might turn something up. Another example here of Bulgaria getting a reputation abroad that is not helpful to the country.

SuOcrack - 3 Dec 2011 // 17:40:19

Well, hopefully, now we will be able to communicate with the new owner by email and/or via their website (do they have one?) instead of having to make round trips to offices in Varna every time we need to do something. I'm not holding my breath.

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