EIB will guarantee to Brussels the transparent structure of the Bulgarian Energy Holding

The European Investment Bank (EIB) has committed to preparing a report, which will guarantee to the European Commission that the funds between the Electricity System Operator (ESO) and Bulgartransgaz are distributed transparently to the Bulgarian state budget. This way, the two state-owned companies will be able to remain within the structure of the Bulgarian Energy Holding (BEH), although the Commission has long insisted that they be separated, and this was even set as a mandatory condition for receiving payments under the Recovery and Resilience Plan.

Bulgarian Energy Minister Zhecho Stankov announced the future report at a briefing together with Deputy Prime Minister Tomislav Donchev and Finance Minister Temenuzhka Petkova. At the briefing, the cabinet sharply criticized the opposition party "Continuing the Change" roundtable held earlier today to discuss the RRP and the state budget.

This is the second cabinet briefing within 10 days, in which Donchev, Petkova and Stankov complain about the Plan submitted by Kiril Petkov's government. Interestingly enough, GERB's current coalition partners - BSP and ITN – were also part of that government.

Painful reforms

We have a clear plan - for the EIB to ensure, through the preparation of a special report, that there is a way for the two companies to continue to be part of the holding's structure in order to maintain its stability and prevent bondholders from demanding 2.5 billion leva ahead of schedule."

According to Stankov, the reform thus laid out in the Recovery and Resilience Plan will "bring the Bulgarian energy sector to bankruptcy", as the removal of the two companies will make bonds worth 2.5 billion leva (1.25 billion euros) payable before maturity.

In order to receive the second RRP payment, Bulgaria had to detach ESO and Bulgartransgaz from BEH - a commitment that Stankov will now try to renegotiate.

The Bulgarian Energy Minister also said that the other commitment under the Plan, which imposes a 40% reduction in emissions in coal-fired power plants, would directly mean “electricity blackouts for Bulgarian households."  

"It makes a clear commitment that we have a limit on how much electricity can be produced by our coal-fired plants."

The commitment made for 10,000 emission units will lead to a situation where as early as November, someone from Europe will tell our coal-fired power plants: Stop working! And then the energy minister, whoever he is, will have to tell you "We are starting a power outage regime" - 2 hours in the Burgas region, 3 hours in Varna, 4 hours in Stara Zagora."

He explained that nothing has been renegotiated regarding coal-fired power plants and that they are “currently working hard to deal with the difficult legacy."

According to Stankov, the commitment linked to the Roadmap for Climate Neutrality is "the most ignorant type of reform and it contains one big nothing - commitments that the state made years ago in strategic documents."

RRP projects are being dropped

As has already become known, projects will be dropped under the Recovery Plan. The exact projects will become clear next week, according to Deputy Prime Minister Tomislav Donchev.

Regarding the reforms for the second payment, Donchev promised that they would be discussed in Parliament as early as this month, and according to him, the most problematic are those in the energy sector.

Friday, March 7, is the deadline by which the final opinions from the ministries will be collected, and a project-by-project presentation will be organized by the middle of next week, he explained.

Regarding the procedure for renewable energy sources for households, Stankov explained that 700 contracts have already been signed, and the rest are expected to be signed by the end of the month. 

From his statement, it also became clear that as of March, while the interim budget is still in effect, there is no hole in the Electricity System Security Fund budget and there are funds in it for the upcoming liberalization of the retail electricity market.

Translated by Tzvetozar Vincent Iolov