site.btaPayment of NEK Arrears Allows Settlement of Debts Down the Energy Chain

Payment of NEK Arrears Allows Settlement of  Debts Down the Energy Chain

Sofia, April 28 (BTA) - The settlement of NEK's arrears of over 1 billion leva to two US-owned thermo-electroc power plants in Bulgaria, AES Maritza East 1 and ContourGlobal Maritsa East 3, has allowed the settlement of all debts down the chain in the energy sector. This transpires from remarks by Deputy Energy Minister Zhecho Stankov for BTA Thursday. The two power plants have paid up their dues of some 350 million leva to their coal supplier, the Maritsa East Mines, and the mines in turn have settled their obligations to the Energy Ministry, the National Revenue Agency and the Bulgarian Energy Holding, said Stankov.

NEK was able to pay up after the its parent company, the Bulgarian Energy Holding, secured last week a loan of 535 million euro. By that time the NEK arrears to AES Maritza East 1 and ContourGlobal Maritsa East 3 had reached 588 million leva and 501 million leva, respectively.

Deputy Minister Stankov said that the mines will have enough resources left for their investment and overhaul programme, and for new stripping.

NEK made the payment of its debt to the two US-owned power plants on April 27 and they lowered with immediate effect the capacity price that they charge NEK, as agreed upon last year: by 14 per cent for AES and 15 per cent for ContourGlobal.

The capacity prices were reduced three days ahread of schedule.

Stankov said the lower capacity price will reduce by some 100 million leva a year the payments that NEK makes during the remaining term of the power purchase agreements with the two power plants and will save the State some 1 billion leva.

AES Bulgaria Executive Director Olivier Marquette was quoted by his company's press office as saying that the full payment of the NEK arrears is the final step of the process of renegotiation of the power purchase agreement (PPA). "The amended PPA brings direct benefits to the Bulgarian people and contributes to the efforts of the Government to restructure the energy sector", said Marquette.

Andres Gluski, AES President and Chief Executive Officer, is quoted as saying that the Government of Bulgaria has made important progress to sustainably strengthen the energy sector and lower electricity prices for consumers. "By meeting all of its contractual obligations, Bulgaria is sending a very positive sign to all foreign investors in the country", Gluski added.