Bulgaria Love/불가리아 뉴스

불가리아 주요 경제뉴스 ( 9 – 16 NOVEMBER 2007)

KBEP 2007. 11. 17. 00:59





Sections/headline briefs:




·        Iraq pays off $360 M to Bulgaria in cash

·        Europe advises against currency board in Bulgaria

·        European Commission decides on Belene NPP in weeks

·        Greens impede Belene NPP project

·        Russia and Bulgaria sign joint statement on south stream

·        Burgas-Alexandroupolis pipeline obstacles lifted

·        Italy's Eni, Russia's Gazprom to co-own South Stream gas

·        Bulgaria, Azerbeijan set high priority to Nabucco gasline project

·        Environment Minister asks UK, US to support Bulgarian position on carbon dioxide emission allowances

·        Smaller carbon quotas to trigger bankruptcies

·        1400 m2 radioactive waste processed in Bulgaria annually 

·        Bulgarian MPs authorise �90 M World Bank loan

·        October inflation at 0.6%

·        Raise of Bulgarian GDP will reach inflation in 2009

·        Current account deficit reached 13.8% of GDP

·        Water supply sector to get �1.8 billion funding from EU

·        Budget of program for agricultural development amounts to �3.2B

·        Deeper-draught vessels to have access to Burgas port

·        Sofia subway among recipients of budget allocations

·        Solomon Passy: China's relations with Euro-Atlantic community will be crucial in 21st century

·        Nicolas Sarkozy: Don't neglect Bulgaria

·        Bulgaria stakes on congress tourism

·        Bulgaria cabinet to spend BGN 570 M from budget surplus

·        Market economics institute suggests regulating procedure for bankruptcy of municipalities

·        Finance Minister: Bulgaria is ready to absorb EU funds

·        Bulgaria`s industrial production growth slower 

·        Lidya Shuleva:Trakia, Hemus freeways remain alien to Budget 2008

·        Bulgaria, Armenia to seal transport, tourism agreements

·        Non-bank sector in Bulgaria most vulnerable to money laundry

·        More than 40,000 new automobiles sold in the country in Jan/Oct

·        Registration of biofuel producers begins

·        Bulgaria stays 33rd in European purchasing power rankings

·        Bulgaria occupies 25% of Russia's wine market

·        Health minister Gaydarski: Pharmaceutical industry is a field that can prosper and conquer the world

·        Sofia to host 10th CEI summit economic forum

·        Bulgaria, China sign memorandum of understanding and cooperation in labour and social insurance




·        Foreign direct investment up to EUR 3.8bn end-Sep

·        Ikea teams up with Bulgarian wood-working company

·        Israeli company to build �25M residential complex

·        Voest planning Black Sea steel production

·        BTC to invest �12.8 M in network digitalisation

·        Swiss investor acquires 10% in Sparky Eltos

·        GE, Tishman join hands in Bulgaria

·        UK Winlan to invest USD137 M in local retail park

·        �20 M for ecological zones between Bulgaria and Greece

·        Bulgaria to Get �41.5 M by 2011 under Norway, EEA financial mechanisms




·        Czech PM: Czech companies interested in Sofia energy and infrastructure projects

·        New operator on Bulgarian telecom market

·        Mobiltel Bulgaria ends Q3 with 4.8 M customers

·        Lufthansa sees Bulgaria as strategic market

·        Mispol plans to expand to Bulgaria

·        Atlas Copco reports 200% jump in Bulgaria sales

·        Bulgarian Euromarket sees 2007 group equipment sales at BGN 400 M

·        BNP Paribas officially acquires JetCredit

·        Raiffeisenbank holds 10% market share end-Sep

·        Sopharma to acquire Ukrainian rival




·        Bulgaria's real estate sector boosted by the development of tourism and economic growth

·        Newly accepted EU members have potenciality







Iraq pays off $360 M to Bulgaria in cash

On October 8, the Bulgarian Government passed a bilateral agreement regulating the repayment of Iraq's debt to Sofia. According to the document, Baghdad's debt to Sofia totals US $1.860 billion, of which US $1.259 billion is the principle and the accumulated interest until 2004 is US $601 million. Iraq should also pay a penal interest on the delayed instalments in the period from 1992, when Iraq ceased to pay its debt to Bulgaria. Thus, Iraq agreed to a recalculated debt to Bulgaria in the size of US $3.51 billion, and Bulgaria accepted a direct payment coefficient of 10.25 cents per each US dollar.The conditions for the repayment of Iraq's debt to Bulgaria were negotiated within the framework of Iraq's agreement with the Paris Club.According to Minister Oresharski, a cash payment is the best option for Bulgaria, because a rescheduled payment over twenty-three years is quite precarious, considering the current situation in Iraq. After the cash payment that Bulgaria will receive at the beginning of the next year, the country will put an end to its debt relations with Iraq.

Europe advises against currency board in Bulgaria

Europe insists on Bulgaria's lifting the currency board. Eurozone experts want Bulgaria to "set the Lev free," the EBRD Chief Economist, Erik Bergleof told Reuters. Analysts reportedly believe that in a two-year period when Bulgaria will be monitored in the ERM II mechanism, the national currency should be unpegged to make sure the country can withstand the pressure of the international market. This is hardly admissible, the board will be functioning till the euro is introduced, the Bulgarian National Bank and Bulgaria's Ministry of Finance commented.As The Standart already wrote, within days Bulgaria will officially accede to the ERM II. The mechanism could be roughly described as the entrance passage to the Eurozone. Each country, before introducing the euro, should apply the system for at least two years, meeting certain criteria. one of them is the currency rate fluctuation to be maintained within 0.15% both up and down and another is that the inflation in these two years be kept under 1.5% of the average for the EU.
In Bulgaria, in July, 1997 the currency board was introduced under the BNB Act, pegging the Bulgarian lev to the DEM as 1:1 and with the introduction of the euro in the EU, the legislation was amended and the ratio was changed to 1 euro equaling 1.95583 levs.

European Commission decides on Belene NPP in weeks

In a few weeks the European Commission is to take a decision on the NPP Belene project.
"It does not matter whether the technology used in the construction of Bulgaria's second nuclear power plant "Belene" is Russian, French or of some other country. We will approve of the project provided that the environment impact assessment of the power plant meets the EU standards," said EU Commissioner for Energy Andris Piebalgs during talks with Bulgaria's Energy Minister Petar Dimitrov. "If Brussels gives green light to Belene project, Bulgaria will be able to apply to Euratom and the European Investment Bank for cheap loans for the construction of the power plant," Mr. Piebalgs said also.He also said that Bulgaria might receive bigger compensations for the decommissioning for power units 1 and 4 of NPP Kozloduy than the ones provided in Bulgaria's EU Accession Treaty."The currently provided compensations for the decommissioning of the power units are far from enough and the issue will be raised by PM Sergey Stanishev on the first oncoming meeting of the Prime Ministers of the EU member states," Minister Dimitrov said.

Greens impede Belene NPP project

Bulgarian and foreign environmentalist organizations put up extreme pressure on Brussels to block Belene NPP project, reported Bulgaria's Energy Minister Petar Dimitrov who takes part in the 20th World Energy Congress in Rome. "Some abortive green organization have nested in the heart of European Commission and sabotage the construction of the NPP," the Minister explained.  He believes this is the main reason why Brussels delays so much the official approval for the project. The European Commission was expected to come out with a stand on the issue a month ago but for environmental and political prejudice against the Russian subcontractor Atomstroyexport's technology, the NPP project has not been greenlighted yet. A decision has to be taken within a month or at latest till the end of the year, Minister Dimitrov reckons, because it will be then that the contract with Atomstroyexport is to be signed. Although Brussels' opinion would be only a recommendation, a positive response would facilitate the National Electrical Company to procure funding for the construction of Belene NPP.Anti-globalists with flags and posters besieged the building where the energy congress was held, protesting against further construction of nuclear power plants anywhere in the world.Over 5000 representatives of 40 different countries take part in the 20th World Energy Congress. 

Russian and Bulgarian energy ministers sign joint statement on south stream


Bulgarian Economy and Energy Minister Peter Dimitrov and Russian Industry and Energy Minister Viktor Khristenko signed a joint statement for construction of a new transit gas pipeline through Bulgaria, Dimitrov's Ministry announced on Thursday. The Bulgarian Minister is on a two-day visit to Moscow on an invitation by Khristenko, BTA reports.Dimitrov said that he hopes the intergovernmental agreement on the so-called South Stream project will be drawn up to coincide with President Putin's visit to Bulgaria in January 2008. He added that the joint project will make Bulgaria one of Southeastern Europe's most important transit hubs for energy supply.Bulgaria has a large interest in the pipeline, which will raise profits gained from transit charges and guarantee gas supplies to Europe, Dimitrov further said. The pipeline will reach Austria in the north and Italy in the south and will carry a total of 30 million cubic metres of gas annually.Dimitrov undrscores the importance of getting guarantees that the pipeline will be used at its full capacity.He also said that the project is not an alternative to other projects and that all contracts with Russia for gas supply and transit will remain in force until 2030.Dimitrov and Khristenko also discussed the construction of the Belene nuclear power plant in northern Bulgaria, whose main contractor is the Russian company Atomstroyexport. The project is pending EU approval and Dimitrov said that preliminary information does not give cause for concern about its approval.Minister Dimitrov also met the Chairman of Gazprom's Management Committee Alexei Miller on Thursday. Aside from South Stream, the future oil pipeline between Bourgas and Alexandroupoli in Greece was also discussed, as was further development of Bulgarian-Russian cooperation in the gas and oil industries, Gazprom's information service reported.Gazprom recalled that Russia has been exporting natural gas to Bulgaria since 1974 and that in 2006 Gazprom supplies amounted to 3,200 million cubic metres. Currently, the company is Bulgaria's only foreign gas supplier, and transits gas through the country to Turkey, Greece and Macedonia.Dimitrov also met with Rosatom President Sergei Kirienko.


Burgas-Alexandroupolis pipeline obstacles lifted

The Burgas-Alexandroupolis oil pipeline project could get underway in April 2008 after the Bulgarian and Russian companies involved in the venture resolved the problems stemming from regulatory omissions that had so far held back the kick-off, Bulgarian economy minister Petar Dimitrov said in connection with his visit last week to Moscow. 'The Russian company committed to the construction of the oil pipeline does not own the oil and that was its main objection to the inclusion in the [project] agreement of a requirements that it provide the necessary volumes. During our visit, the Bulgarian and Russia side signed an supplementary agreement, obliging Moscow to provide guarantees for the oil volumes needed for the project financing,' said Dimitrov.The Bulgarian official did not say if Moscow backed off from earlier demands that the other two partners in the project - Sofia and Athens, provide equal share of the oil supplies. once the Burgas-Alexandroupolis pipeline is operational, Bulgaria stands to receive $300 mln in annual transit fees, said Dimitrov.

Italy's Eni, Russia's Gazprom to co-own South Stream gas

Russian state-control gas monopoly Gazprom and Italy's Eni will own the gas volumes that will be pumped by the South Stream pipeline, Bulgarian economy minister Petar Dimitrov said at the world energy congress underway in Rome, Italy.The two companies, which has signed a memorandum for the construction of the pipeline, will split evenly the ownership of the gas volumes which will be either of Caspian or Russian origin.A Bulgarian-Russian intergovernmental agreement will be signed in early 2008, showcasing the political support of either side for the project.It is not clear if an international project company will be set up.In related news, it emerged that the Bulgarian and Greek companies that are shareholders in the international project company for the construction of the Burgas-Alexandroupolis oil pipeline will a crucial say in important decisions regarding the fate of the project. They were granted that authority with the protocol signed last week by the future shareholders in the international project company.According to the protocol, 13 types of decisions, including the reregistration of the international project company, the disposal of equity and the expansion of the pipeline capacity with over 50 mln cu m annually, will require 80% of the votes.The protocol also states that the Russian side will guarantee the necessary oil volumes and the project funding.

Bulgaria, Azerbeijan set high priority to Nabucco gasline project

Bulgaria's Prime Minister Sergey Stanishev and his Azerbeijani counterpart discussed the countries' partnership in a transcontinental pipeline project on Monday.The envisaged construction of the Nabucco pipeline would allow for gas from Central Asia to pass to Europe through Turkey, Bulgaria, Romania and Hungary."This is a high priority project for the whole European union, as well as Azerbeijan as a significant producer of oil and natural gas", said Sergey Stanishev during his official three-day visit to Baku."Azerbeijan is not able to fully satisfy Europe's energy needs but can cover part of them, PM Artur Rasizade explained."We are ready to start deliveries of natural gas to Europe but active participation of other countries is also necessary", he added.The prime ministers signed agreements for strengthening economic relations between the countries and discussed partnership between the state gas companies Bulgargaz and SOKAR during the high meeting.An estimated 20-25 billion cubic meters of natural gas could be piped annually to Europe through the 4,000-kilometer Nabucco pipeline to pass from Iran to Austria, officials have said.Bulgaria supports the construction of the USD 5.8 B project, as well as a Russian plan to build a gas pipeline under the Black Sea, through Turkey and possibly Bulgaria to Europe.The Nabucco pipeline is due to be built in 2008.

Environment Minister asks UK, US to support Bulgarian position on carbon dioxide emission allowances


Environment Minister Djevdet Chakurov met with British Ambassador Steve Williams to discuss Bulgaria's position on the European Commission's decision to reduce the carbon dioxide (CO2) emission allowances in the National Allocation Plans for 2007 and for the 2008-2012 trading period and to ask Britain for support, the Ministry said on Tuesday Chakurov stressed that a reduction in the CO2 allowances would be a setback for the Bulgarian economy: it would slow down economic growth and push up producer prices, which would ultimately affect consumers. He also said the energy sector would be hard hit at a time when four reactors of the Kozloduy nuclear power plant have been decommissioned.Also on Tuesday, Chakurov raised the issue with US Ambassador John Beyrle at a meeting at the Environment Ministry.On Wednesday, Chakurov is meeting with business representatives to discuss arguments in support of the two National Allocation Plans and possible steps to defend the Bulgarian position before the European Commission. on October 26, the Commission decided to set the annual allocation for 2008-2012 at 42.3 million tonnes of CO2 allowances, 37.4 per cent less than proposed in the National Allocation Plan.


Smaller carbon quotas to trigger bankruptcies


А lot of industrial enterprises will go bankrupt as a result of the reduction in Bulgaria's carbon emission quota, the chairman of the Bulgarian Association of the Metallurgical Industry, Anton Petrov, forecast after a meeting of the business with minister of environment Djevdet Chakarov. The meeting was held to discuss Bulgaria's arguments for revision of the European Commission's decision to cut the quota from 67 million tonnes to 42.3 million tonnes a year.The cement plants in Dimitrovgrad and Pleven will be forced to shut down. That will trigger a two-fold price increase and Bulgaria may have to import cement, the chairman of the industry association, Alexander Chakmakov, said.
The price Sviloza pays for electricity and heating will jump by EUR 20 per mWh, Yoncho Pelovski of the Bulgarian Chamber of Chemical Industry forecast. The prospects before the other big enterprises are similar. According to Anton Petrov, the price of electricity will double, entailing a rise in commodity prices. The smaller quota will also terminate investments in the paper industry, where more than EUR 40 million has been injected so far.
Representatives of the employer organisations and minister Chakarov will visit Brussels on November 22 to try and defend the initially requested quota of 67 million tonnes. The European Commission based its decision on GDP growth of 5.2% until 2012, though growth in the past few years exceeded 6%. Also, Brussels did not take into consideration the closure of units 3 and 4 of the Kozloduy nuclear power plant that was compensated by the Maritsa Iztok thermal power plant, which produces more carbon emissions.

1400 m2 radioactive waste processed in Bulgaria annually 

Nearly 1400 cu m of radioactive waste is was processed in Bulgaria annually, Boris Pekov, executive director of the state enterprise Radioactive Waste said.Nuclear Regulatory Agency data showed that in 2006, 2849 sites were sources of ionising radiation, Petkov said as quoted by Bulgarian news agency BTA.Transportation to, and processing and storage of radioactive waste at the waste sites of Bulgaria's Novi Han and Kozloduy cost nine million leva per year.According to Pekov, prices charged to a company owner for transportation and processing of radioactive waste were lower than real expenses.Bulgaria won three projects under the PHARE programme for modernisation of the Novi Han waste site, Pekov said. The projects were worth eight million leva.The money would be granted only after the second public debate on the environmental impact report, to be held on November 15 2007.Nikolai Lambev, expert at Radioactive Waste, said that a national depositary for low and medium radioactive waste should be built in Bulgaria by 2015. Currently, four locations were under discussion for the construction of the depositary, he said.

Bulgarian MPs authorise �90 M World Bank loan


Bulgarian lawmakers granted green light on Friday for the cabinet to borrow EUR 90 M from the World Bank for the rehabilitation of 450 kilometres of roads in the country.Bulgarian Finance Minister Plamen Oresharski and Florian Fichtl, World Bank country manager for Bulgaria, signed the loan memorandum in September.The lender has said the loan would assist Bulgaria reduce road transport costs by improving the condition and quality of its roads network during the first years of EU accession. The country joined the bloc in January.The cabinet proposal was passed with the votes of the MPs from the ruling three-way coalition, despite objections from the opposition.Rightist MPs Ivan Kostov and Martin Dimitrov criticised the government for contracting the loan, arguing that the country could use EU structural funds or even part of its huge budget surplus.Bulgaria will contribute with BGN 54 M to the road modernisation project.

October inflation at 0.6%

Consumer price inflation for October 2007 was 0.6 per cent, month-on-month, the National Statistical Institute (NSI) said Tuesday. The consumer price index stood at 100.6 for the same period.Consumer prices rose by an average 9.5 per cent between December 2006 and October 2007 and by an average 12.4 per cent between October 2006 and October 2007.January-October 2007 inflation was 7.6 per cent, year-on-year.In October, food prices increased 1.0 per cent, mass catering prices 0.9 per cent, service prices 0.2 per cent and non-food prices 0.3 per cent.The prices of the following food products rose in October: rice (0.6%), flour (6.3%), bread (6.1%), pasta products (7.3%), pastries (4.1%), lentils (3.8%), beans (2.1%), milk (2.7%), citrus fruit (2.1%), vegetable oils (2.8%), coffee (1.7%), spirits (1.4%), pork (1.4%), sausages (between 1.4 and 1.8%), etc.The prices of the following dropped: cabbage (41.8%), apples (9.8%), poultry (3%), mushrooms (9.9%), carrots (5.9%), mineral water and fizzy drinks (1.1%), etc.The following prices rose among non-food items: of clothes (2.5%), shoes (2.6%), taxi fares (6.1%), propane butane gas for vehicles (2.6%) etc.In October A98H and A95H gasoline price dropped 2.5% and 3.6%, respectively.Medical services rose 0.4% and dental care 0.5%.

Raise of Bulgarian GDP will reach inflation in 2009

At a press conference held late on November 8 in Brussels, BUSINESSEUROPE's president Ernest-Antoine Seillière, secretary general Philippe de Buck and director of the Economics Department Marc Stocker presented BUSINESSEUROPE's second Economic outlook for 2007, Economic Outlook Autumn 2007 – taming uncertainties, speeding up reforms, a media statement by the Bulgarian Industrial Association said.The outlook estimated Bulgaria's real GDP growth for 2007 at 6.5 per cent as compared to 2.6 per cent for the euro zone and 2.9 per cent for the EU. The outlook expected that Bulgaria's GDP growth for 2008 will remain unchanged at 6.5 per cent, while the euro zone and the EU's real GDP growth would decrease as compared to 2007, for 2008 respectively at 2.1 per cent and 2.4 per cent.Inflation in Bulgaria for 2007 was expected to be 8 per cent as compared to only 2 per cent in the euro area and 2.1 per cent in the EU. Expectations are that in 2008 Bulgaria's inflation will decrease by 0.5 per cent to 7.5 per cent and in the euro area and the EU it will remain almost unchanged – 2.1 per cent for the euro area and 2.2. per cent for the EU.The unemployment rate in Bulgaria for 2007 is estimated at 7 per cent, which is exactly the same rate as the one in the euro area and the EU. In 2008 Bulgaria's unemployment rate is expected to decrease by 0.5 per cent to 6.5 per cent, while in the euro area and in the EU it will decrease by respectively 0.2 per cent and 0.4 per cent to 6.8 per cent and 6.6 per cent.Bulgaria's employment growth for 2007 will be 4.3 per cent, 2.8 per cent more than this in the euro area (1.5 per cent) and  2.7 per cent more than this in the EU (1.6 per cent). Expectations for 2008 are that Bulgaria's employment growth rate will decrease to 3.5 per cent (by 0.8 per cent), while the employment growth rates in the euro area and in the EU will decrease by 0.4 per cent each (to respectively 1.1 per cent and 1.2 per cent).BUSINESSEUROPE's Economic outlook is conducted twice a year and is based on a survey among the national federations members of BUSINESSEUROPE, one of which is the Bulgarian Industrial Association. The outlook's aim is to outline the economic prospectives to the EU.

Current account deficit reached 13.8% of GDP

In September 2007 the Current account was negative and amounted to EUR 464.3 million, compared to a negative account of EUR 208.5 million for the same month in 2006. In the period January – September 2007, the current account deficit was EUR 3,675.1 million (13.8% of GDP), against a deficit of EUR 2,100.2 million (8.4% of GDP) for the same period in 2006. The main factor for the increase of the current account deficit was the higher (by EUR 1,447.4 million) trade deficit.In the period January – September 2007, the Current and Capital account deficit was EUR 3,571 million (13.4% of GDP), against a deficit of EUR 1,981.7 million (7.9% of GDP) for the same period in 2006.The trade deficit in January – September 2007 amounted to EUR 5,075.6 million (19% of GDP), compared to a deficit of EUR 3,628.2 million (14.5% of GDP) for the same period in 2006.Exports (FOB) amounted to EUR 9,729.1 million against EUR 8,924 million for the same period in 2006. Imports (FOB) amounted to EUR 14,804.7 million, against EUR 12,552.2 million for January – September period in 2006.The balance on the Services item was positive, amounting to EUR 1,325.4 million (5% of GDP), against a positive balance amounting to EUR 997.9 million (4% of GDP) for the same period in 2006.Income (net) item was negative amounting to EUR 175.6 million compared to a positive item of EUR 35.1 million for the same period in 2006. Income receivable (EUR 1,130 million) increased by EUR 201 million compared to January – September 2006 (EUR 929 million). Income payable (EUR 1,305.6 million) increased by EUR 411.7 million compared to January – September 2006 (EUR 893.9 million).Net Current transfers amounted to EUR 250.7 million (0.9% of GDP) against EUR 495 million (2% of GDP) for the same period in 2006.The Capital account balance amounted to EUR 104 million, compared to a positive balance of EUR 118.5 million for the same period in 2006.The Financial account balance was positive amounting to EUR 7,258.8 million, compared to a positive balance of EUR 3,659.5 million for the same period in 2006. Foreign direct investment abroad was EUR 126.6 million against EUR 65.8 million for the same period in 2006. Foreign direct investment in Bulgaria1 was EUR 3,807.4 million (14.2% of GDP) against EUR 2,985.3 million (11.9% of GDP) for the same period in 2006. The direct investment covered 103.6% of the current account deficit against 142.1% for January – September 2006.Portfolio investment - assets decreased by EUR 162.4 million, compared to an increase of EUR 89.6 million for the same period in 2006. Portfolio investment – liabilities decreased by EUR 369.6 million, also due to repayment, at the end of February 2007, of global bonds issued by the government. In the period January – September 2006, the liabilities increased by EUR 198.8 million.Other investment – assets decreased by EUR 697.3 million, compared to an increase of EUR 1,837.6 million for the same period in 2006. Other investment – liabilities increased by EUR 3,095.1 million against an increase of EUR 2,468.4 million for January – September 2006.The item Net errors and omissions was negative, amounting to EUR 701.3 million. For the same period in 2006 the item was negative amounting to EUR 392.1 million.The Overall balance was positive, amounting to EUR 2,986.4 million compared to a positive overall balance of EUR 1,285.7 million for the same period in 2006. In the period January – September 2007 the BNB reserve assets2 increased by EUR 2,731.1 million.

Water supply sector to get �1.8 billion funding from EU


Bulgaria’s water supply and sewerage sector will get as much as EUR 1.8 billion from the EU funds, Bulgarian Minister of Environment Dzhevdet Chakarov announced on BNR. He says they have been working on implementing a number of projects on ISPA that aim at improving the water supply and sewerage sector in many residential areas, the Duma daily reports.


Budget of program for agricultural development amounts to �3.242 billion


The value of the budget of the program for development of agricultural areas for the period 2007 – 2013 amounts to EUR 3.242 billion. The funds have been distributed in four directions, Nihat Kabil, Bulgarian Minister of Agriculture and Food Supply told BTV. one of the directions is boosting competitiveness of the Bulgarian agricultural and forestry product, which means investment projects in the field of farming. It will get 42% of the funding. The program has been accorded with the European Commission, all the details have been specified, the minister noted further. The minister said they await the program’s final approval on December 19-20.





Deeper-draught vessels to have access to Burgas port

A new approach canal was tested last week at Bulgarian Black Sea port Burgas. The canal enables the port to cater to 15 m draught vessels, up from the previous limit of 11 m. Belgium's Dredging International removed 4,150 cu m of sediment for the purposes of the project which will boost cargo turnover in '08. 'We have planned further measures for the modernisation of the port infrastructure but they will require intervention on the part of the competent state institutions to correctly allocate the revenue from port charges,' said harbor director Argir Boyadjiev.

Sofia subway among recipients of budget allocations

The Bulgarian government has earmarked 570 mln levs from the '07 budget revenue overperformance for the deployment of the single European emergency call number, 112, for the implementation of energy policy measures and for the construction of road, railway, environment and other infrastructure, including the Sofia subway system. The nation's budget surplus reach a record high of 6.1% of the GDP forecast by the end of Sept or 3.3 bln levs.

Solomon Passy: China's relations with Euro-Atlantic community will be crucial in 21st century


China's relations with the Euro-Atlantic community will be a structurally determining factor in global development over the course of the 21st century, Solomon Passy, Chairman of the Parliamentary Foreign Policy Committee, stated at a non-governmental conference in Lisbon on Tuesday.This is the sixth meeting of scientists and politicians from Europe and China discussing the future of relations between China and the Euro-Atlantic community. The previous meeting took place in Sofia in 2006.Passy said his report was about a faster and closer integration of China into the Euro-Atlantic security system. He recommended that a NATO-China Council be set up, modelled on the NATO-Russia and NATO-Ukraine Councils. He also suggested that China be incorporated into Partnership for Peace and be gradually involved in the Organization for Security and Cooperation in Europe (OSCE).China's northern border with Russia and Mongolia is also its border with OSCE, and is the longest geopolitical border on the world map, Passy said. He believes that his recommendations for boosting relations with China would allow for a faster and fairer solution to conflicts, including those in Myanmar, North Korea and Africa.

Nicolas Sarkozy: Don't neglect Bulgaria

President of France Nicolas Sarkozy, who spoke before the European Parliament in Strasbourg yesterday, promised to pay more attention to the Eastern European countries. According to him, these countries, including Bulgaria, think that their opinion is often neglected, because history has decided they to enter Europe later than the other members.
This doesn't make them less European, said Sarkozy. In his address to the MEPs he used words like "heart" and "feelings" several times in order to stress that Europe is not simply a machine. Europe can't remain indifferent to human life, fate and passions. It can survive only if its alive for its people, if it lives in their hearts and ideals," said Sarkozy and then promised to make the Frenchmen love Europe again.He explained that the Frenchmen have voted against the European constitution, because they "felt that Europe  doesn't protect them and is rather indifferent to them.""The EU must not fear diversity, because this would destroy it; if there is only one way of seeing things, without debate. Today economic value is above all. And what Europe should do is defend its cultural diversity and identity," the President of France said.Heatedly and with quick gestures he explained  that Europe should take care of its energy and food supply, which meant that it should protect its industry and producers, the way "other countries in the world" did it.
"Competition is a means and not a goal. Financial capitalism should not serve the profiteers. Capitalism should be a moral system which shouldn't allow the ptofeteers have the upper hand," he said.

Bulgaria stakes on congress tourism

During the next year Bulgaria will accent over congress and culture tourism.That was announced on a press conference where the State Agency of Tourism (SAT) President Anelia Krushkova, Bulgarian Federation for Congress Tourism chairman Kamen KIchev and Sofia Congress Burro chairman Hristo Drumev signed a contract for cooperation in this direction.The main aim is Bulgaria to stand beside first decade of countries, in which congress tourism is developed.This year the raise of business traveling to Bulgaria is 22%. Middle stay for the delegates is 3 days, as they spend 3000 $ middle per day. Most common they are ensconced in 4-5 star hotels.

Bulgaria cabinet to spend BGN 570 M from budget surplus

Bulgaria's cabinet decided to spend BGN 570 M from this year's budget surplus on a series of projects in need of investment, the government press service said on Sunday.
Part of the funds will be used for new road, railway and environmental infrastructure, as well as on the ongoing construction of Sofia's underground.Some money will be spent on addressing commitments undertaken by Bulgaria when it joined the EU, such as setting up emergency centres for monitoring all distress calls, and the rest will go as interest-free loans to local administration.The exact amount of funding each of those sectors will get will be decided when the parliament approves the cabinet's proposal, the government press service said.Bulgaria's budget surplus reached a record 6,1% of gross domestic product, or BGN 3,3 B, for the first nine months of the year.

Market economics institute suggests regulating procedure for bankruptcy of municipalities

The Institute for Market Economics has proposed lower taxes in comparison with the draft budget for next year, prepared by the government, it turned after institute officials presented a project for alternative state budget at a news conference, a journalist of FOCUS News Agency reported. Georgi Angelov, senior economist at the Open Society explained that the main idea of the alternative budget is cutting tax burden and state costs, reforming the public sector and effective use of the revenues, revenue growth, speeding economic growth as well as raising efficiency of public services. The economists propose a 10% income tax, 10% profit tax and 10% tax on sole proprietors. They also propose a procedure for bankruptcy of municipalities, which they believe would better bind municipalities and local economy.


Finance Minister: Bulgaria is ready to absorb EU funds

The big municipalities of Bulgaria, Sofia among them, have prepared EU funding application projects, according to Bulgaria's Minister of Finance Plamen Oresharski who officially inaugurated the Technical Support programme. He believes the administration's capacity for absorbing EU funds has considerably increased in 2007.The EU funds are given for an already implemented project. If the project is successful, part of the funds would be reimbursed under EU funding programmes. The money from Technical Support programme will go for devising projects for operative programmes.


Bulgaria`s industrial production growth slower 

Bulgaria's industrial production over august showed a slower growth at 8.4 per cent year-on-year, when it had reached 14.3 per cent in July 2007.Bulgaria's National Statistics Institute (NSI) recorded a drop over the month of 3.2 per cent, daily Pari reported.Extractive industrial production fell in August with 17.9 per cent on the year, and with 5.1 per cent compared to July 2007.Manufacturing industry increased its productivity with 6.9 per cent on the year, but fell with 4.9 per cent when compared to the month before.Production and distribution of electricity, gas and water grew by 24.4 per cent year-on-year.NSI recorded a slower growth of industry sales in August 2007, Pari daily reported.

Lidya Shuleva: Trakia and Hemus freeways remain alien to Budget 2008

‘My position has always been linked to the fact that money come from the economy and we have to stimulate the economy in order to have high incomes’, Lidya Shuleva, member of the Budget and Finance commission in the Bulgarian Parliament said in an interview for BTV. According to Shuleva the fact that there is a decrease of investments and a minimal growth of the GDP was worrying.‘The most hindering fact in the Bulgarian economy is the lack of freeways and the Trakia and Hemus freeways will remain alien to budget 2008’, Shuleva said.

Bulgaria, Armenia to seal transport, tourism agreements

Transport and tourism agreements are among the papers to be signed Tuesday by Bulgaria's Prime Minister Sergey Stanishev and his Armenian counterpart Serj Sarkisian.
The officials will also seal an agreement, which is to regulate the back transfer of illegal immigrants between the two countries.The industrial and agriculture relations between Bulgaria and Armenia will be strengthened by signing another two papers.There will be officially founded a Bulgarian-Armenian economic commission as well.All the documents are to be sealed in the framework of PM Stanishev's visit to Yerevan.

Non-bank sector in Bulgaria most vulnerable to money laundry

According to the director of the Agency for financial investigation Vasil Kirov non bank sector in Bulgaria is the most vulnerable of all regarding money laundry and illegal financial operations reported BNR.The main reason for this is the smaller amount of money transactions.Mr.Kirov recons that the most demanded sectors for money laundry right now are the construction and the real estate sector.The fact that the volume of operations with illegal money in Bulgaria is bigger than the volume in UK and USA shows that money flows are not part of the Bulgarian criminal circles but mainly regards international crime activities.They normally pass the country just to reach its final destinations which in most of the cases are offshore zones.


More than 40,000 new automobiles sold in the country in Jan – Oct


A total of 40,211 new automobiles were sold in Bulgaria in the first ten months of the year, according to statistics presented by the Union of Automobile Importers. 4,695 vehicles were sold only in October. Sales grew 24.31% compared with the respective period last year.Together with motorbikes, buses and trucks the total number of vehicle sales for the Jan – Oct 2007 period comes to 42,703, against 34,024 last year.Toyota and Ford are continuing to be the most popular brands, accounting for, respectively, 11.73% and 9.03% of all sales, followed by Peugeot and Opel with 8,62% and 8.20%.Volkswagen has a 7.02% share on the Bulgarian market with 3,186 items sold. Citroen, Skoda and Dacia all have more than 6%. Peugeot is number one in motorbike sales, followed by Piaggio and Yamaha, while Mercedes, Iveco and Man are the most popular trucks.


Registration of biofuel producers begins

The Bulgarian farming ministry starts accepting Thu the paperwork of bioethanol and biodiesel refineries seeking to be approved as purchasers and primary processors of energy products. The documents will be accepted until Dec 10. The approved refineries will be exempt from the requirement to furnish a bank guarantee of 60 euro for each ton of purchased product. The onsite inspections of the refineries will be carried out until Dec 12. They will be followed by an order from the farming minister, rubber-stamping the okayed biofuel producers. A list with their names will be posted on www.mzgar.government.bg on Dec 15.

Bulgaria stays 33rd in European purchasing power rankings

Bulgaria ranked 33rd, same as last year, in the annual purchasing power ranking of European countries carried out by German-based market research firm GfK.The average purchasing power in Bulgaria in 2007 is EUR 2 453, according to the survey.Among southeastern European countries, Greece ranks highest - 18th with a per capita purchasing power of EUR 12 203.Neighbouring Serbia, Turkey and Romania occupy the three spots above Bulgaria in the rankings, while Macedonia is two places behind, in 35th.
Although in a country comparison, the new EU member states are still lagging behind their western neighbours, the survey shows that in some more affluent eastern and central European municipalities the purchasing power is higher than in the poor communities in eastern Europe, GfK said.Switzerland and Liechtenstein, which are grouped as one entity by GfK for the purposes of the survey, kept its top position with a per capita purchasing power of EUR 27 521, followed by Luxembourg and Norway.Moldova continues to prop the table in 40th place, with an annual per capita purchasing power of just EUR 685.

Bulgaria occupies 25% of Russia's wine market

Bulgaria occupies a quarter of Russia's wine market, which also makes it the top wine importer in Russia, Plamen Mollov, chairman of the The National Vine & Wine Chamber (NVWC), said at a food and beverage exhibition in Sofia. Bulgaria has exported 585,000 hectolitres of wine to Russia and aims at strengthening its position as a top importer in that country. The wine is the jewel in the crown of Bulgaria's food industry but the country has to learn how to promote it, Mollov said.Belvedere Bulgaria's Katarzyna wine brand won the most prestigious prize awarded by the Order of the European Wine Knights, which organised an international wine tasting ceremony within the framework of the exhibition. More than 50 wines from Bulgarian, Austrian, Hungarian and Serbian wine producers took part in the competition.

Health minister Gaydarski: Pharmaceutical industry is a field that can prosper and conquer the world

If we manage to employ the pharmaceutical genetic industry, we can conquer the European market, Bulgarian Minister of Health Radoslav Gaydarski announced upon opening a national pharmaceutical forum of the Association of Bulgarian Pharmaceutical Manufacturers, a journalist of  Focus News Agency reported. He appealed to businesses to be actively involved in the Bulgarian genetic industry. Pharmaceutical industry is a field that can prosper and conquer the world, Gaydarski announced. In his words pharmacists in Bulgaria along with their European partners can develop such a genetic production that would satisfy not only the Bulgarian market, but the markets of Western Europe, too. ‘We should conduct a social policy more than anything else and then think of the small and micro entrepreneurs, he added. If there is no VAT on pharmaceuticals, we will have lowest rates in Europe. The extra charging of pharmaceuticals has been changed and is now getting closer to the maximum values – for example where the overcharge was 29%, now it is 24-25%. The minister noted that the maximum levels of extra charging have been achieved thanks to the efforts mostly of the Ministry of Health. He commented that despite the demand of pharmacists to generate profits this cannot happen. According to the methodology we have been working on we should have the lowest rates in Europe. Unfortunately it turns out we are not the state with lowest pharmaceuticals rates after levying the 20% VAT, the minister commented.

Sofia to host 10th CEI summit economic forum

The Tenth Central European Initiative Summit Economic Forum will take place November 20-21 in Sofia's National Palace of Culture, Deputy Economy and Energy Minister Luchezar Borisov said on Thursday.This year's CEI conference, themed around the topic of "Mobilization of Resources for a Common Future", will coincide with the Southeast Europe Economic Forum (SEEF). The joint event is being co-organised by the Ministry of Economy and Energy, the Bulgarian Economic Forum and the Bulgarian Chamber of Commerce and Industry. Business contacts with a multitude of companies and institutions from Central and Eastern Europe will thus be able to be realized by way of lectures, seminars and project presentations. 1,300 participants from over 30 countries have so far registered, two-thirds of them businesses.A total of 19 sessions will take place in the course of the forum, including 124 presentations, and over ten large-scale projects will be introduced, mainly on real estate, infrastructure and EU financing.A Round Table of Economy Ministers will run parallel to the forum, followed by a CEI Prime Ministers' Conference a week later, with the two events setting the paths for development of countries in the Region.Energy will be of special relevance at the two-day conference, especially: the Nabucco pipeline project; Bulgarian energy policy within the context of European energy policy; trends in the real estate markets of Bulgaria and the Balkans; competitiveness; telecommunications; and capital markets. The latter will focus on presentations of the Vienna Stock Exchange and the Bucharest Stock Exchange, and an overview of Bulgaria's own capital market.

Bulgaria, China sign memorandum of understanding and cooperation in labour and social insurance


Bulgaria's Labour and Social Policy Minister Emilia Maslarova, who is paying a working visit to China, and China's Labour and Social Security Minister Tian Chengping signed a Memorandum of Understanding and Cooperation between their respective ministries, Maslarova's Ministry said in a press release Thursday.Under the Memorandum, the sides will work jointly for improvement of labour and social security legislation, labour inspection, employment promotion, vocational education and training, social dialogue and industrial relations, equal opportunities for women and men, and streamlining of the pension systems to meet the new challenges.At the meeting Maslarova presented Bulgaria's policies and measures for improvement of labour productivity, increase of employment and decrease of unemployment. She familiarized her Chinese counterpart with Bulgaria's labour market policy and the National Action Plan for Employment, which is synchronized with the employment guidelines of the Lisbon Strategy for growth and jobs, the measures for gender equality and reconciling professional life with family responsibilities.The Memorandum, along with an Agreement on Cooperation with China's Ministry of Civil Affairs, which was also signed during the visit, favour the promotion of contacts between the Bulgarian Ministry of Labour and Social Policy and the Fujian Provincial People's Government.Maslarova and her delegation conferred with Li Chuan, Vice Governor of the Fujian Province, one of the fastest developing provinces of the People's Republic of China, her Ministry said.The two stressed the importance of the good friendly, political and economic relations between Bulgaria and China.The Fujian government officials showed interest in Bulgaria's labour legislation and working conditions reforms and in the programmes targeting vulnerable groups: people with disabilities, young people, single mothers, social assistance recipients, long-term unemployed and uneducated unemployed. Minister Maslarova and Vice Governor Li Chuan concurred that enhancement of public welfare is the principal goal of both counrties' governments.The sides found they encounter similar problems in balancing labour market flexibility and security. They agreed on the need of deeper cooperation in identifying the needs of workforce of specific professional qualification, the improvement of labour qualifications and the development of the independent social dialogue system.









Foreign direct investment up to EUR 3.8bn end-Sep

Foreign direct investment in Bulgaria for the first nine months of 2007 amounted to EUR 3.807 billion, or 14.2% of GDP, preliminary BNB data show. For the corresponding period in 2006, foreign investment totalled EUR 2.985 billion (11.9% of GDP).
Great Britain was leader in investment in Bulgaria with 15.4% of the total volume, followed by Austria (8.6%) and Belgium (8.5%). The bulk of foreign capital was invested in real estate, rental activity and business services (EUR 1.46 billion), financial intermediation (EUR 1.044 billion) and construction (EUR 488.9 million).
Bulgaria's current account deficit for January-September amounted to EUR 3.675 billion, i.e. 13.8% of GDP.

Ikea teams up with Bulgarian wood-working company

Darvoobrabotvane-VT Co., a local wood-working company, said it will build a new factory in its home city of Veliko Tarnovo in partnership with Swedish furniture retailer Ikea.The joint investment in the factory, which will manufacture arm-chairs and chairs, will be 2.5 mln euro. Part of the financing will be provided by Ikea as a loan to Darvoobrabotvane-VT Co. In exchange, the Bulgarian company will commit to selling its entire output to Ikea over a four-year period.During the first stage of the project, Darvoobrabotvane-VT Co. will start production of 125,000 arm-chairs and 65,000 stools. They company will then deliver over 200,000 chairs which will be followed by a doubling of the arm-chair and stool output, said Darvoobrabotvane-VT Co. owner Alexei Kanchev.The new factory is expected to generate 4 mln euro in annual sales. Darvoobrabotvane-VT Co. is expected to list 1.104 mln new shares on the local bourse in December 2007. If the offering sparks substantial interest, the company may float up to 48%, including old shares. 2007 revenues are forecast at 13 mln levs with net profit at 1.5 mln levs.

Israeli company to build �25M residential complex

Tivon Properties, a subsidiary of Israeli construction company STERN, has launched construction works on a gated residential complex, which will also feature commercial and office space. City Park Sofia is the first project of the Israeli company in Bulgaria. It will be built on a 5,000-sq. m plot near the Todor Alexandrov and Slivnitsa boulevards. The company will invest a total of EUR 25 million in the project. The complex will feature 150 apartments, 6,000 sq. m of office space and 3,500 sq. m of commercial space. The starting price for the residential properties within the complex is set at 1,100-1,200 EUR per sq. m.


Voest planning Black Sea steel production

Austria's biggest steel concern Voest plans a second steelworks on the Black Sea coast, APA News Service reported on Tuesday.With investments of billions of euros, it would double its annual production capacity to 11 mln tons by 2013, supplement its only present production site of Linz in Austria, and employ thousands more workers.Romania, Bulgaria, Ukraine or Turkey came into question for the new site with a 5,000 ton annual capacity. The decision would be made in 2008.Spokesmen said Voest could, with production at Linz alone, no longer meet huge customer demand and dynamically growing markets in Central and East Europe.Voest recently took over more than 80% of its fellow Austrian steel concern Boehler-Uddeholm for about 3 bln euro. Boehler is the world's leading manufacturer of steel for machine tools.

BTC to invest �12.8 M in network digitalisation

The country’s major landline telecom BTC announced plans to invest more than BGN 25mn (EUR 12.8mn) in digitalisation of its network. This would grant access to the broadband internet offered by the company, which can be reached in 300 settlements in the country at present. The digitalisation ratio is expected to reach more than 70% by the end of the year. AIG Capital Partners completed the acquisition of 90% of BTC in block deals on the local stock exchange for a total of BGN 2.77bn about 2 months ago. The local subsidiary of AIG Capital Partners, NEF Telecom, has recently submitted a buyout offer to minority shareholders in BTC on plans to withdraw the stocks from the bourse. The net consolidated profit of the company dropped 28.9% y/y to BGN 95mn in Jan-Sep but sales increased by 2% y/y to BGN 770.8mn respectively.

Swiss investor acquires 10% in Sparky Eltos

Switzerland's Julius Baer International Equity Fund has acquired 10.148% of the capital of Bulgaria's Sparky Eltos for BGN 28 million. The mutual fund bought a total of 1.69 million shares in early November, a notice of the Central Depository shows. As a result of the deal, the main shareholder in the company, Sparky Group, reduced its interest to 67.46%.Julius Baer International Equity Fund also has packages of more than 5% in the Bulgarian Telecommunications Company and Chimimport. The fund is part of New York-based Julius Baer Group, which has more than 30 representative offices worldwide.
Sparky Eltos's net sales for the first nine months of 2007 amounted to BGN 49.232 million, up by 50% year on year. on Monday, the shares of the company cheapened by 3.64% on the Bulgarian Stock Exchange to BGN 16.15. For the past six months the shares of the electrical tools manufacturer have risen by 298.10%.

GE, Tishman join hands in Bulgaria

General Electric's real estate unit, GE Real Estate, will join the Sofia Airport Centre project implemented by Tishman International. Investments in the new business centre, which will feature 100,000 sq. m of commercial and warehouse space, will amount to EUR 250 million. This is the first joint project of the two companies in Bulgaria.Tishman is currently working on the infrastructure of the project and expects to get an office space construction permit within a few weeks. GE Real Estate set foot on the domestic market 18 months ago with the purchase of Mall of Sofia. The company subsequently acquired Mall Plovdiv jointly with Quinlan Private.

UK Winlan to invest USD137 M in local retail park

Britains Winlan has announced plans to invest USD137 million in Bulgarias first retail park. The project, which received a First Class Investor certificate from Bulgarias investment promotion authority, will be implement by Retail Park Sofia, 85%-owned by Inland Bulgaria Limited. It has bought 24 ha of land between the capitals Lyulin and Filipovtsi boroughs for USD36 million. The location for the retail park, due to open in 2010, was chosen for its proximity to the Lyulin motorway, the Sofia ring road and the general scarcity of such projects in this part of the capital in contrast to its eastern boroughs. The 77,000 sq m retail park will accommodate several supermarkets as well as furniture, electronics, automobile and apparel hypermarkets. There will be 3,000 parking spaces and a gas station. CushmanWakefield will market the lettable space inventory. Rent rates will be significantly lower than those charges by other Sofia malls. The developer will provide 25% of the necessary financing and will borrow the remainder after the property reaches a certain occupancy level.

�20 M for ecological zones between Bulgaria and Greece

According to the program for sustainable development funded by the PHARE program, 20 mln euro are going to be invested in activities for sustainable development in the first four trans-border ecological zones between Bulgaria and Greece announced BNR. The programe supposes activities for developing green business in territories which were included in the first project for trans border zones.Among the main activities are sustainable tourism and agriculture, sustainable use of the nature resources, improvement of the infrastructure and the services. These activities could be done by the local population without endangering the nature and biodiversity.The chief executive of the European Commission in Bulgaria Michael Humphries said that despite Bulgaria is among the newest members of EU she has already made a great contribution to the eco nets which are part of the pan European ecological net.

Bulgaria to Get �41.5 M by 2011 under Norway, EEA financial mechanisms

By 2011, Bulgaria will receive 41.5 million euros under a cooperation programme with Norway and the financial mechanism of the European Economic Area (EEA), Deputy Finance Minister Lyubomir Datsov told the media Thursday.The two financing programmes were launched at a seminar in Sofia's Radisson SAS Hotel, held with the participation of representatives of Bulgarian and Norwegian companies, non-governmental organizations and social partners."I am very happy to be here for the start of the programmes," Norwegian deputy Foreign Minister Elisabeth Walaas. on joining the European Union, Bulgaria automatically became a member of the EEA, which also includes Norway, Iceland and Liechtenstein, she said.The purpose of the programmes is to enhance contacts between the Bulgarian and the Norwegian institutions and business communities and make up for its inequality compared with the other EU Member States, Walaas said.The two programmes will operate for two years, Datsov said. The deadline for negotiating the projects for funding is April 30, 2009, and the deadline for their implementation and final payment is April 30, 2011. To be eligible for funding, the beneficiaries proposing projects should have partnership relations with similar organizations in Norway.A total of 20 million euro are available for Bulgarian beneficiaries under the Norwegian cooperation programme. The priority areas are the reduction of greenhouse gas emissions, including projects under the Kyoto Protocol designed to be carried out jointly; energy efficiency and renewable energy sources; sustainable production, including its certification and inspection; application of the Schengen acquis.The EEA financial mechanism donors are Norway, Liechtenstein and Iceland. The amount agreed is 21.5 million euro, 20.24 million of which are provided by Norway. The priority areas are environmental protection, promotion of sustainable development, preservation of the European cultural heritage, public transport and urban renovation, training and education-based development of human resources, health care, child care.All public, private and non-governmental organizations may submit projects applying for funding from the two programmes. The grants provided will cover up to 60 per cent of project costs.The programmes will provide up to 85 per cent funding for projects of the central, regional or local administrations, and if the project concerns an area prioritized by both programmes, the funding can reach 90 per cent.







Czech PM: Czech companies interested in in Sofia energy and infrastructure projects

Czech companies have expressed interest in Sofia-based energy and infrastructure projects, Czech prime minister Mirek Topolanek told journalists on November 9 2007. Topolanek made his statement when leaving a meeting with Sofia mayor Boiko Borissov, mediapool.bg reported.CEZ, the incumbent owner of Sofia power distribution company, has long been interested in the Sofia heating utility, Toplofikatsia-Sofia.Topolanek has also communicated Czech companies' interest in projects for combined heating and electric power production, as well as in the construction of tram lines and in Sofia lighting building projects.Prague and Sofia, according to the Czech PM, shared the same problems, namely infrastructure, sewerage, protection of cultural-historical monuments, among others. There was ground for co-operation in all these fields, as well as in education and culture, Topolanek noted.Boiko Borissov told journalists that if Czech companies expressed interest, they were welcome to partake in the tender to extend the Sofia underground.He added that the Sofia Municipality has filed the paperwork for EU financing of new underground extensions with the European Commission. once the EC gives the go-ahead, Sofia Municipality will open the tender to build the new underground sections.

New operator on Bulgarian telecom market

New operator appears on the Bulgarian telecommunication market next spring. ‘Carrier BG' took the last national WiMAX license and started building of net for wireless voice, video, data and Internet transfer. In Thursday from the association promised to cover most of the big cities in Bulgaria to the end of the year.Operator intends to shorten the term, previewed in the license for building of the new net. For this goal have already started the realization of 3 year investment program for over 140 million BGN (70 million EUR).Decipherings are done upon analyses and expectation prognoses about the final WiMAX facilities encroachment on the world and local market.Operator expects this to bring reduction of prices of services, because consumers won't pay for the additional facilities for net connection.‘Carrier BG' announced their intention to gain and provide for its client also a number plan for mobile phones with code 099.Company is created in 2004 by ‘Atlantis BG'- company with 10 year experience in the area of wireless technologies and telecommunication services.

Mobiltel Bulgaria ends Q3 with 4.8 million customers


Bulgarian mobile operator Mobiltel (M-Tel), a Telekom Austria company, registered 4.8 million customers at end-September, up 19.3 percent from a year earlier. Its market share fell year-on-year from 54 percent to 50.3 percent. An increase of 30.8 percent in average minutes of use (MoU) charged per customers partly offset lower prices which led to a fall in APRU from EUR 11.40 in Q3 2006 to EUR 10.40 in Q3 2007. Revenue reached EUR 174.4 million in Q3 2007, up 8.2 percent from a year earlier on customer growth and higher traffic. EBITDA was up 4.3 percent to EUR 101.4 million, with operating income down 0.5 percent to EUR 62.8 million. During the first nine months of 2007, the Group revenues were increased by 2% to EUR 3,630.9 million - due to higher revenues from international operations.Revenues in the Mobile Communication segment rose by 3.1% to EUR 2,238.9 million during the first nine months of 2007.This growth was driven by international operations in Bulgaria, Croatia and Slovenia which more than offset lower domesticrevenues.

Lufthansa sees Bulgaria as strategic market


Eastern Europe and Bulgaria are a strategic market for Lufthansa. The company's turnover has increased by 10% in 2007, which shows it has potential for expansion in this region, the vice president of the German company, Karsten Benz, told the Pari daily in an interview.It is Lufthansa's long-term policy to invest not only in new lines but also in infrastructure. one such project is the joint venture with Bulgaria Air for servicing Boeing and Airbus aircraft in Sofia. We also plan daily flights to and from Sofia and buying bigger planes for the destination to Munich, Benz added.Lufthansa relies a lot on its partnership with Bulgaria Air. To strengthen our positions in the market we need the provide the technical maintenance of our aircraft, Benz pointed out. Currently Lufthansa holds 80% in the joint venture and Bulgaria Air has 20%, which is a good basis for cooperation. The joint airplane service facility will start operating in 2008 and will provide another 400 jobs.Currently Lufthansa operates successful lines between Sofia in Bulgaria and Frankfurt, Munich and Dusseldorf in Germany. In 2008 we will increase the number of flights to Frankfurt from two to three and open a new line to Zurich with six flights a week, Karsten Benz said.


Mispol plans to expand to Bulgaria

Polish food company Mispol wants to expand its operations to Romania and Bulgaria, reports the Polish News Bulletin. The ready-made food producer may build a factory in the region in the future. The company is also in take-over talks with a rival food maker. 'The negotiations have been suspended for the time being,' said CEO Marek Piatkowski. ' We may return to them in the first quarter of '08.' Mispol has taken over three companies since June 2006 when it listed its shares on the Warsaw Stock Exchange. Its group consists of a ready-made food producer Agrovita, Czech animal food maker Bono and Belarussian Grodex.

Atlas Copco reports 200% jump in Bulgaria sales

Atlas Copco, the Swedish maker of compressors, generators, construction and mining equipment, said it posted an increase of over 200% in Bulgarian sales in the past year. The Swedish company opened a representation office here in '06 and on Mon inaugurated an office in Sofia's Northern Industrial Zone. The Bulgarian unit of the company outperformed the rest of the Altas Copco subsidiaries in the Balkans. The company has a hydraulic breakers plant in Ruse, on the Danube.

Bulgarian Euromarket sees 2007 group equipment sales at BGN 400 M

Euromarket Group, the local vendor of power tools and construction equipment, has forecast full-year sales at 400 mln levs for 2007, including 250 mln levs in domestic sales.The company netted sales of around 300 mln levs in 2006, including 170 mln levs generated by its home market.Barring any unforeseeable circumstances, group sales should vault past the 1 bln lev mark by 2010, said chief manager Dimitar Ilchev.Earth-moving, loading, road construction, mining and hydraulic equipment accounts for half of the company's sales. The remainder is contributed by industrial equipment and power tools.According to end-November data of the Committee for the European Construction Equipment Industry, Euromarket Group held the biggest share of the Bulgarian market for backhoes and loaders.Euromarket Group plans to expand its regional units and after-sale maintenance centers to ensure the availability of customer service in all major Bulgarian cities.Regional units are due to open by the end of 2008 in Plovdiv, Stara Zagora, Burgas, Ruse, Pleven and Blagoevgrad.The company is currently building the nation's biggest service center for construction equipment in Sofia.The group, which employs 1,000 staff, has subsidiaries in the Ukraine, Serbia, Croatia and Slovenia.

BNP Paribas officially acquires JetCredit

BNP Paribas is now officially the owner of one of Bulgaria's leaders in consumer lending, JetFinance. The acquisition of the Bulgarian company by BNP Paribas's subsidiary Cetelem was finalised on November 7, 2007 with the approval of the competent bodies.
JetFinance has a portfolio of 500,000 clients. The amount of loans provided by the company in 2006 increased by more than 60%, year on year. The same rate has been preserved in 2007. Cetelem has plans to expand JetFinance's portfolio of products by offering credit cards, car financing, mortgage loans. The new services will be most probably launched in early 2008.

Raiffeisenbank holds 10% market share end-Sep

The assets of Raiffeisenbank Bulgaria amounted to BGN 5.289 billion as at September 30, 2007, up by 63.23% year on year. Thus the market share of the bank amounted to 10.19% as at the end of September 2007. Raiffeisenbank posted BGN 72.16 million profit for the first nine months of 2007, a 44-percent year on year increase. The deposits of the bank have also risen by 50.74% to BGN 3.236 billion. Raiffeisenbank was also a leader among the investment intermediaries on the Bulgarian Stock Exchange with BGN 4.36 billion turnover for the period. The bank is also a leader on the bonds market after placing seven issues for EUR 98.79 billion in 2007.The credit portfolio of the bank amounted to BGN 2.784 billion as at the end of September 2007, up by 72% year on year.

Sopharma to acquire Ukrainian rival

Bulgarian pharmaceutical maker Sopharma will buy a rival company from Ukraine. The acquisition deal has been given the green light by Sopharma's board of directors.In a recent interview for the Pari daily, Sopharma's executive director, Ognyan Donev, said the company will focus mainly on the Balkans, the Baltic region, Russia and Ukraine. The purchase will help the medicine giant strengthen its positions in these markets.
Sopharma will have to put off its plans to get listed on the Warsaw stock exchange in February 2008. Currently the Bulgarian Central Depository cannot establish a connection with its Polish counterpart, Donev explained. Sopharma recently registered a joint venture with Natur Produkt Zdrovit, which will market products of the Bulgarian company in Poland.






Bulgaria's real estate sector boosted by the development of tourism and economic growth

Publication: Profit.bg

Low real estate prices and a good level of economic development are the main factors making Bulgaria one of the most attractive countries for investment in real estate, a research by British Obelisk states.Prices are not the only thing that attracts foreign investors, according to the research. The development of tourism and the potential of the sector are the other very influential factors.The world tourist organization (UNWTO) describes Bulgaria as the new “new face” of tourism in the 21st century. At the same time CTO makes a daring forecast - that by 2010, some 20 mln tourists will be visiting the new EU member country each year. If that forecast turns true Bulgaria will be one of the fastest developing tourist destinations in the world.By comparison, the country was visited by just 4.6 mln foreign tourists in the first three quarters of the year.According to official national statistics, the number of foreign visitors rose 70% between 2000 and 2004, of which 90% are EU citizens.The tourism sector, which contributes 16% of GDP, is expected to continue receiving the strong support of the government, which guarantees its future development.Economic growth is also stable – 6.25% in 2005, and 6.1% in 2006. This year it is projected at more than 6%. H1 economic growth came to 6.4%.Bulgaria attracted a significant amount of foreign investment between 2003 and 2006. Last year DFI stood at the record 4.36 mln euros, or 16% of GDP.The economic development, the rising income of the population and the increasing foreign interest in the country after its EU accession lead to the fast growth of the real estate market in the past several years.According to official data presented by the National Statistics Institute (NSI) real estate prices have risen 15% in H1, but according to market analysts, the actual figures are much higher. In Q2 Bulgarian real estate prices were rising at the second highest pace in the world. Home prices rose 27.1% y/y, and Q2 alone registered a 12.2% hike versus Q2 2006.Last year Bulgarian real estate prices were the fastest rising in Central and Eastern Europe, after Poland. In the past several years, property prices have been rising at an annual average of 30%.The 10 countries, which joined the EU in 2004 rapidly moved forward more than 10 spots in the “cost of life” chart right after their accession.Prices in the Bulgarian capital are still nearly 40% lower than in Prague, Warsaw and Bratislava, but are expected to catch up with them in the following years, together with the increasing income of the population.The development of the banking system and easier access to crediting has also helped the real estate market significantly.Some of the problems still remaining before foreign investors, who wish to buy property here are the fact that the law does not allow foreign residents to own land in the country, as well as the relatively high transaction fees on property deals.

Newly accepted EU members have potenciality

Author: Ellen Kelleher, Financial Times


Romania and Bulgaria, once repressive regimes, now offer opportunity, claims fund manager Ion Florescu. Mr Florescu's fund - New Europe Capital's Reconstruction Capital II - invests in both fledgling European Union countries, though he admits Romania remains more attractive as it is has a developed industrial base while tourism is still Bulgaria's principal industry."Investing in these countries is not something particularly exotic. The macroeconomic situation in both Romania and Bulgaria is very, very good. Both are similar economies," he says.Growth has been strong since the end of communism. Money is pouring into investment in bridges, airports and roads in both countries, according to Mr Florescu. Romania's construction sector is currently expanding at 20-30 per cent per year, for example.Apart from infrastructure, the sectors Mr Florescu likes include consumer products, construction, light manufacturing, real estate development, materials and food groups. He avoids start-up companies.The focus of the fund, which launched on the Alternative Investment Market in December 2005, is investing in private companies likely to go public.Favourite private equity picks are Policolor, the Romanian paint supplier, Albalact, the dairy group, Romar, the private medical services company, Top Factoring, a call centre, the Bulgarian Stock Exchange and land in central Bucharest. The fund also has 34 quoted holdings, but Mr Florescu refuses to disclose the names.Mr Florescu tends to hold investments for three to five years. When he buys into private companies, he looks to purchase companies he believes will float. The development of a private pension industry in Romania is likely to revolutionise the local stock market, according to Mr Florescu. "Private pensions will be hungry for new issues," he says.He is examining investments in Serbia and thinks the country could comprise almost 30 per cent of the portfolio at some point. It is more interesting than Bulgaria as its economy is not focused on property and tourism. Construction, engineering, manufacturers and banks offer value."Government reforms there have been rigorous. You have some good companies and because Serbia is not in the EU, it's not on the fast track and people have neglected it," he says.This is the second Romanian-focused fund Mr Florescu has launched. The first, RC1, was launched in 1997 and has seen its net asset value grow by an average of 23 per cent a year since then. The RC2 fund, which opened in 2005, has �100m in assets and has gained 29.7 per cent per year since launch.For managers looking to invest in listed companies, there are about 4,000 listed Romanian companies and about 1,700 Serbian ones.Mr Florescu says small caps offer value for managers hunting for bargains as Romanian and Serbian brokerage firms do not have much incentive to cover them. "It's very much to the advantage of investment funds like ourselves. We can identify a small cap and multiply the money a number of times after we take a shareholding in it," he says.In Romania, small-cap companies tend to be family-owned businesses set up three to four years ago.