Bulgarian leaders moot energy consolidation
Bulgarian leaders have agreed to consolidate the country's biggest state-owned energy companies including the Kozloduy nuclear power plant into a single energy holding, according to prime minister Sergei Stanishev.
Bulgarian leaders have agreed to consolidate the country's biggest state-owned energy companies including the Kozloduy nuclear power plant into a single energy holding, according to prime minister Sergei Stanishev.
Speaking after a meeting of the three main parties in the Socialist-led coalition government, Stanishev told the media that the consolidation would be necessary for Bulgaria to remain competitive. The energy holding would comprise the country's power grid operator NEK, gas company Bulgargaz, the country's biggest thermal power plant Maritza Iztok 2 and the Maritza Istok coal mines, as well as Kozloduy, Bulgaria's only nuclear power plant.
According to press reports citing Stanishev, the holding is expected to be operational by the end of 2008 and would have assets of €4 billion ($5.8 billion), with an expected annual revenue of €1.8 billion ($2.6 billion). The new joint holding company would have the necessary financial clout to enable it to invest in neighbouring countries.
Consolidation could also make it easier for Bulgaria to raise the funds needed for construction of a new nuclear power plant at Belene. Contracts worth €4 billion ($5.8 billion) for two new nuclear reactors at the site were signed with Russian reactor vendor AtomStroyExport (ASE) in January, but NEK is still in the process of selecting major investors for up to 49% of the project from a shortlist of Belgium's Electrabel, CEZ of the Czech Republic, EOn and RWE of Germany, and Italy's Enel.
The consolidation plans could yet run into regulatory opposition from the European Commission, which is pushing to liberalize the energy sector and favours breaking up integrated production and distribution businesses in a process known as unbundling. Bulgaria is one of a number of countries that oppose the EC's plans to split up national power utilities and has formally given its backing to an alternative regulatory plan put forward by France and Germany which would allow supply and network operations to be functionally separated without splitting infrastructure ownership.
