Bulgaria cancelled a power plant sale to Greek Public Power Corporation (PPC) in a blow to the country’s plans to resume its role as a leading power exporter in Southeast Europe.
The decision to end the –105.2 million sale of the Bobov Dol coal-burning plant was due to environment and coal-purchasing disagreements, Todor Nikolov, the privatization agency’s executive director, said yesterday.
“We failed to reach an agreement on a key issue – whether the conditions in which the plant has to work following the sale would allow it to meet the pollution cap,” Nikolov said, confirming what a source told Reuters a day earlier.
Nikolov said the privatization procedure is not yet closed, as the agency is waiting to see if PPC will appeal the decision. He suggested the Socialist-led government hopes to avoid a lengthy legal procedure and plans to open a new tender for the 630-megawatt generator as quickly as possible.
Sofia once exported substantial amounts of electricity but, having closed two nuclear reactors last year over safety concerns, now needs to build new power stations and upgrade old ones quickly.
The Greek state-controlled utility said it will look carefully into the agency’s motives and decide how to proceed after that. But a company source told Reuters PPC would most likely appeal. “PPC will probably appeal the decision,” the source, who declined to be named, said.
Environment woes
It is the second time Sofia has canceled the Bobov Dol deal. The privatization agency picked PPC to buy 100 percent of the plant in western Bulgaria last July after a court cleared the sale, scrapped by the previous centrist government.
In subsequent talks, PPC had argued that the short operational life of the plant until 2014 made hefty upgrades unjustifiable and that it should either not be forced to use sulphur-rich local coal or an environmental cap should be eased.
Nikolov said the agency had offered to cover the future fines that would come from breaching the pollution cap until 2011, by when it hoped PPC could make necessary investments to upgrade the plant, but the Greek company refused.
“We wanted to know whether PPC will be willing to take the investment risk and, excluding the fines, invest and modernize the plant to cut the harmful emissions. Obviously PPC estimates that risk as too high and I think that led to the collapse of the deal,” Nikolov said.
Nikolov said the agency has also insisted that PPC buy local coal for at least five years. Miners fearing layoffs have held numerous protests against the sale and PPC failed to reach an agreement with miners’ unions.
(Reuters, 09/05/2007)