Financial and business news from Bulgaria

Video: Companies in the energy sector owe BGN 2.5 billion in total

Companies in energy owe a total of BGN 2.5 billion. This became clear today at a press conference of the caretaker Minister of Energy Andrey Zhivkov.
He pointed out that servicing these liabilities alone cost the state EUR 100 million annually.

"BEH has access to attractive funding, but instead of investing in strategic projects and becoming a regional player, uses them to solve current problems. Put another way, with long-term obligations BEH solves short-term problems. This is a road to a debt spiral, “said the minister as a criticism in the working style of BEH, under whose hat the energy companies are under.

Andrey Zhivkov presented his team and his deputies, after which he announced the priorities of his team. He pointed out the conclusions after a review of the financial and economic situation of state-owned companies in the energy sector.

“Companies in the Energy sector are united under the hat of Bulgarian Energy Holding. The structure was created with the idea of having access to attractive funding, using them, to become a regional player. Similar projects in other countries have worked, and that's where companies have really become regional players. In our country, the company really has access to attractive financing, but instead of using them for development, the holding is using them to solve current problems”, Zhivkov said in the Ministry of Energy.

According to him, BEH, with the long-term obligations it takes on, solves short-term problems, which is a classic example of a road to a debt spiral.

As an example of BEH's obligations, Zhivkov pointed to the National Electricity Company, which currently has over BGN 2 billion liabilities that are not regularly serviced, as well as the Maritsa - East 2" TPP, which has been in critical condition in recent years.

"BEH is indebted to solve the short-term problems of Maritsa - East 2" TPP and Toplofikatsiya Sofia. They cost 100 million leva per year. And they can be used for many other purposes. Energy policy, or lack of it, has led things to this state and this is reflected in the energy strategy thus presented, where there is really no kind of measures regarding the worst problems such as coal mining and its perspective”, said the Minister of energy.

As a priority, Zhivkov outlined the healing of financial discipline and the “unclogging of European funds”.