BULGARIAN ECONOMIC TOP NEWS DIGEST
WEEKLY REPORT (18 - 25 JANUARY 2008)
Sections/headline briefs:
MACROECONOMY:
· Bulgaria prefered South Stream to Nabucco
· "South Stream" impedes the opening of NPP “Kozloduy” blocks 3&4
· EU should correct its mistake with Kozloduy NPP
· Referendum on NPP Kozloduy
· Russia to grant �3,8 Bln for NPP Belene in case of need
· No loan from Russia needed for Belene NPP project
· Construction of Bourgas-Alexandroupolis starts no sooner than 6 months
· Municipalities to get fees from oil pipeline project
· US Ambassador to Bulgaria John Beyrle to become Russia's
· Deficit of current account reached 18.5% of GDP
· December unemployment in Bulgaria slightly up
· Varna port to speed container handling ops
· Grain import from outside EU
· Medical war looms over privatization
· Bulgaria to develop trade relations with Iran
· Bulgaria to support transfer of Iran's gas and oil to Europe
· Bulgaria to derive 1/6 of domestic power from renewable energy sources
· EC increases Bulgaria's greenhouse gases emissions quotas
· Some 44% of consumers look for quality life
· EEA Sits in Sofia
· EBRD supports Bulgarian energy savings market
· EBRD to lend � 53.7 M to Sofia water distribution utility
· EBRD: Bulgaria to face hurdles in providing capital inflow from abroad
INVESTMENTS:
· Investments expected in auto parts, wind parks
· Jan – Nov 2007 Foreign Direct Investment in Bulgaria at BGN 5.05 Bln
· London - Investor No 1 in Bulgaria?
· Varna business center receives investment certificate
· E.ON Bulgaria to build wind farms
· Two solar stations to be built in Pirin mountain
· Liebherr to invest another �35M in Plovdiv
· Ciccolella to invest �150M in rose growing
· Central Rаilway Station in Sofia аttracts �95 M in 2 Years
· BGN 9m to be invested in business park in Targovishte
COMPANIES:
· German Economy Awards in Bulgaria 2007
· Bulgarian companies become more digital
· The shares of Bulgaria's Top 100 companies slump by 22%
· Bulgarian-German JV to build profiles plant in Pleven
· Over 40 companies interested in business zone in Simitli
· Minister proposes not to privatise two companies
· Sale of debt-ridden Sofia Heating Plant draws huge interest
· 'Stroytransgaz' plans active participation in Bourgas-Alexandroupolis
· Burgas – Alexandroupolis to be built by Bulgarian companies
· British company to drill for gas in Bulgarian Black Sea
· Sisecam to build fourth plant in Bulgaria
· Petrov PM co to open new components factory
Articles:
MACROECONOMY:
Bulgaria prefered South Stream to Nabucco
Vladimir Putin won Bulgaria's support for the South Stream gas pipeline project yesterday, making an important breakthrough for a project designed to secure Russian gas supplies to the European Union. South Stream, a joint venture between Russia's Gazprom and Eni of Italy intended to carry 30bn cubic metres of gas a year, would make Bulgaria a gateway for Russian natural gas deliveries to south-east Europe and beyond.The new pipeline, with an estimated cost of �10bn ($14.6bn), will rival an EU-backed project, Nabucco, which aims to supply gas from central Asia to Europe in an attempt to limit the EU's dependence on Russia. It will also enable Gazprom to bypass Ukraine for more of its gas exports to the EU, matching the similar proposed Nord Stream project, from Russia to Germany under the Baltic.Mr Putin signed the deal in what is expected to be his last trip abroad as Russia's president.South Stream is planned to pass under the Black Sea into Bulgaria, then to split, with the gas going either north to Romania, Hungary and Austria, or south to Greece and then on to Italy.Jonathan Stern of the Oxford Institute for Energy Studies said the agreement with Bulgaria was an important step forward for the project."It shows South Stream is a runner," he said. "If Bulgaria had said 'we don't want it', that would have created a problem."A breakthrough was reached overnight after the arrival in Sofia of Mr Putin and Dmitry Medvedev, Gazprom's chairman and the man Mr Putin hopes will succeed him as president.Moscow had rejected Bulgaria's attempts to negotiate a majority stake in the stretch of the pipeline that will pass through its territory. The compromise solution, reached in Sofia, is for both sides to have a 50 per cent stake."Our negotiations in Sofia yielded results that show that Russian-Bulgarian relations are continuing their upward march," Mr Putin said. "We reached agreement on a number of important projects; this would not have been possible if we were not trusted partners."Two other big energy deals have also been signed during Mr Putin's stay in Sofia.The first is a contract setting up the company for the planned Burgas-Alexandroupolis oil pipeline, to ease the constraint on oil exports from the Black Sea created by the number of tankers passing through the congested Bosphorus.After more than a decade of negotiations, Russia, Bulgaria and Greece agreed last March to lay a pipeline to carry Russian crude from the Black Sea port of Burgas in Bulgaria to Greece's Alexandroupolis on the Aegean.Russian state-owned groups will own a 51 per cent stake in the new company, and the rest will be split equally between Bulgaria and Greece.The second deal is a contract for Russia's Atomstroyexport to build two nuclear reactors at Belene on the Danube in northern Bulgaria, to replace four Chernobyl-era units that were shut down as a condition of the country's entry to the EU last year. Mr Putin announced that Moscow was ready to provide a �3.8bn loan for the construction of the reactors.Russia's energy projects have triggered worries in Bulgaria over its growing dependence on Moscow. Hundreds of protesters were chanting "Putin Out!" at rallies in Sofia, organised by opposition groups."Russia is dangerous and creates economic instability, attempting to use its heavy hand on the fledgling democracies in the Balkans," said Ivan Kostov, leader of Democrats for Strong Bulgaria (DSB) and former premier. "We just want to be left alone to pursue our European identity."
"South Stream" impedes the opening of NPP “Kozloduy” blocks 3&4
My worry is that after we so actively worked on “South stream”, we will have serious problems with the reopening of block 3 and 4, claimed Vassil Filipov, former director of NPP “Kozloduy”.In an interview for BTV Filipov supported the campaign for the reopening of th blocks “I want light” but explained that he had serious doubt that this could happen. According to him the blocks in the nuclear power plant are completely safe but in the last six months Bulgaria hasn't worked for its interests but for those of Russia.That is why, the EU countries will create serious obstacles to the reopening of the blocks.“We didn't work as a member of the EU, but as a vassal of Russia. I also support “South stream” but how it helps us, we are not a partner, we just transit the gas”, said Filipov and explained that 50% share in the company means actually 50% investment, which Bulgaria should make for an actually foreign pipe.“We cooperated for Russia's business, Russia aims at dependence – to be able to control the taps as it is with the current transits.”, commented Filipov and stressed that the “South stream” would not be connected with the Bulgarian gas infrastructure, which was in fact the biggest disadvantage of the project. In general, there is no problem gas pipelines to cross Bulgaria but they should serve the Bulgarian interests and respectively the European, but not the Russian. The former NPP Kozloduy director pointed out that the “South stream” project is generally good, but the main mistake of the Bulgarian politicians was that they didn't work for the other project, which is of priority for Europe – Nabucco”. “It is the circle of the president that Bulgaria is losing from and will continue losing Our energy mafia is directed by Moscow”, claimed Filipov.According to him, Bulgaria has lost from this noisy campaign of the success of the contract. “We should undertake measures to catch up with the Nabucco project and to build it”, pointed out Filipov.
EU should correct its mistake with Kozloduy NPP
Bulgaria's decision to give up on its cheapest energy source is complete nonsense. It is time for the EU to correct its mistake and put Kozloduy NPP's units 3 and 4 back in operation. This is the opinion of Dr. John Ritch, Director General of the World Nuclear Association (WNA) and Dr. Hans-Holger Rogner, head of the Department of Nuclear Energy at the International Atomic Energy Agency (IAEA), expressed in a documentary, entitled Varnete Kozloduy (Bring Back Kozloduy). The film also contains the opinion of former rapporteur for Bulgaria in the European Parliament, Geoffrey Van Orden, who plainly says "every agreement can be renegotiated". The documentary, directed by the famous Bulgarian journalist Toma Tomov was aired late last night on the Bulgarian National Television (BNT). Today it will be officially presented at a big forum, which will be held at the National Palace of Culture in Sofia and dedicated to NPP Kozloduy's future perspectives. Bulgarian PM Sergey Stanishev, Energy Minister Petar Dimitrov, MPs from the parliamentary energy committee, experts from the Bulgarian Atomic Forum and Kozloduy NPP, together with some national media are launching a campaign this morning for the restarting of units 3 and 4. To add strength to the Bulgarian cause, last night Dr. Ritch, Dr. Rogner and Dr. Abel Gonzales, Director of the Division of Radiation and Waste Safety at IAEA, arrived to Bulgaria. At the event in NPC, the three of them are expected to express commitment to lobby before the EU for the reopening of the reactors.
Referendum on NPP Kozloduy
Europe's hot-shots just love skiing in Austria's Bad Gastein resort, but hardly anybody knows that the radiation levels there are a hundred times higher than the accepted safety levels, because of the hot mineral springs. Thus, it seems that Europe's spa resorts are more dangerous, in terms of radiation levels, than the site of NPP Kozloduy. The news was broken by Dr. Abel Gonzales, Director of the Division of Radiation and Waste Safety at IAEA, and Dr. Hans-Holger Rogner, head of the Department of Nuclear Energy at the International Atomic Energy Agency (IAEA). The two arrived in Bulgaria accompanied by Dr. John Ritch, Director General of the World Nuclear Association (WNA) to support the nation-wide campaign "I Want Light", which promotes the reopening of power units 3 and 4 of NPP Kozloduy."That's what I call hypocrisy - they can make holidays in radiation, but at the same time they closed the reactors," Dr. Gonzales said indignantly.For the first time rulers, opposition, businessmen, experts, non-governmental organizations and media sat at one table to discuss options for the re-opening of units 3 and 4 of Kozloduy NPP. Brussels closed the nuclear reactors at the end of 2006 - this was the price paid by Bulgaria for its EU accession. The closure of the reactors shook the stability in the region; it's not normal for Europeans living in 21st century to bear electricity restrictions, said PM Sergei Stanishev. He explained that the electricity crisis in the region and the electricity price hikes result from the reactors' closure."The I Want Light campaign aims at a referendum for re-opening of units 3 and 4. "Vox populi" is Bulgaria's strongest argument before the EC for the re-opening of the Kozloduy reactors," explained The Standart's Editor-in-Chief Slavka Bozukova.
The referendum is your move to success; the initiative was supported by Ritch, Gonzalez and Rogner. You are now a full member of the EU, you need not ask for permission from Brussels for your actions, the three experts would not stop repeating. Their expert opinion has proved many times that the nuclear power plant is safe and secure.At the initiative of Kozloduy NPP, Bulatom and the Standart, Hall 9 of the National Palace of Culture gathered Bulgaria's Prime Minister Sergey Stanishev, three generations of directors of the NPP, incumbent and former economy ministers of Bulgaria, their teams, the Parliamentary Energy Commission, MPs, MEPs, energy companies' heads from Bulgaria and their foreign partners. The hall was packed to the brim.The deputy economy ministers had to stand because the chairs were not enough.Toma Tomov's documentary Revive Kozloduy was the start of the event. The film by the famous journalist, features dozens of opinions of the world's leading nuclear power experts that prove the safety of the units. These people appeal to Europe to mend its mistake and allow the units re-opening. In a week the documentary will be presented in the EU Parliament in Brussels.
Russia to grant �3,8 Bln for NPP Belene in case of need
Press conference given in front of media by Bulagria and Russia's Presidents was announced that 3,8 billion EUR from the Russian Federation's budget were planned for NPP Belene. If any needs appear we will bestow the money, said Russia's President Vladimir Putin.He underlined that the realization of the energy projects will increase the energy security not only of Bulgaria, but to the Balkans and while Europe.About South Stream project Putin commented that Gazprom and the Italian company Eni already signed the necessary agreements.Bulgaria's President considers this as fast moving of the project.Russia's gas will always be competitive on the European market. The point is not to convince someone in buying it, but to satisfy the growing needs, Putin said.
No loan from Russia needed for Belene NPP project
Bulgaria may not take advantage of the EUR 3.8 billion funding promised by the president of Russia, Vladimir Putin, for the financing of the Belene nuclear power plant (NPP) project, economy and energy minister Petar Dimitrov, said. There is a strong interests from banks willing to secure funding for the construction of the NPP, Dimitrov added. France's BNP Paribas has already secured a EUR 250 million loan for the project. State guarantees for EUR 1.2 billion loan have also been approved. The structuring bank for the project will be selected by the middle of the year.
Construction of Bourgas-Alexandroupolis starts no sooner than 6 months
The construction of oil pipeline Bourgas-Alexandroupolis will start no sooner than 6 months said Stefan Gunchev, chief officer in the Ministry of the Regional Development and Public Works reported radio Darik. Still it is not clear how much time will take the project to be finished because Bulgaria is not experienced in building pipelines, added Mr. Gunchev. According to Russian expert it will take about year and a half.At this stage both stake owners are not intending to sell their stakes in the project.Transit fares and fees are still to be discussed. Municipalities of the region where the pipeline will be constructed could insist on the transit fares to be invested in local infrastructural projects.
Municipalities to get fees from oil pipeline project
The setting up of the Bourgas-Alexandroupolis oil pipeline will not pose an environmental threat to Bourgas, regional development and public works minister, Assen Gagauzov, said. The bulk of the transit fees that Bulgaria will receive from the project should be allocated to Bourgas municipality, Gagauzov said. The remainder of the sum should be distributed among the municipalities along the route of the pipeline, Gagauzov added. The funding may be invested in infrastructure upgrade, the minister said. The construction works on the project are expected to create 1,000 new jobs. In the meantime, Nabucco, the other energy project that Bulgaria is part of has inched forward, it emerged. Turkey's prime minister Recep Erdogan has approved Germany's RWE as the sixth participant in the Nabucco gas pipeline project. The pipeline will go through Turkey and the Balkans to Austria. The project, estimated at EUR 4.6 billion, is a key element in EU's strategy on reducing the natural gas dependence from Russia.
US Ambassador to Bulgaria John Beyrle to become Russia's
US Ambassador to Bulgaria John Beyrle could become the new diplomatic representative of USA in Russia, Russian TV informs, quoting US sources. According to the TV, Beyrle was already chosen from the state department, but from the White House haven't decided yet.John Beyre's appointment would be quite logical, because the Ambassador is taking care of the questions concerning former Soviet Union, Russia and Eastern Europe through his entire diplomatic carrier.Beyrle had worked twice in Moscow until now. The second time he was second in the Embassy.A curious detail is that Beyrle's father was the only US citizen who during the Second World War fight in the US lines and the Russian at the same time.
Deficit of current account reached 18.5% of GDP
Strong imports widened Bulgaria's current account gap to 5.29 bln euro or 18.5% of GDP in January-November 2007 from 3.13 bln euro or 12.5% a year ago, shows central bank data quoted by news agency Reuters. The deficit, one of the Balkan country's key economic concerns, rose to 6.1 bln euro in the 12 months to November, 21.3% of expected 2007 gross domestic product (GDP). The November current account deficit was 746 mln euro, up from 481 mln euro in the same month of 2006. Bulgaria has one of the tightest fiscal policies in Europe in an attempt to counter risks from the huge deficit. The new EU member operates under a currency board regime which curtails central bank operations and makes fiscal policy its key tool to influence the economy. Strong growth and rampant consumption are the key drivers of the deficit as consumers rush to buy after decades of austerity under communism, while companies import machinery and other investment goods to expand production. Imports rose 19.3% to 18.9 bln euro in the first eleven months, data showed, outpacing export growth of 11.5% to 12.3 bln euro. Foreign direct investment rose to 5.05 bln euro in January-November, up from 3.9 bln a year earlier, and covered 95.4% of the current account gap. Analysts say that the huge imbalance makes Bulgaria one of the most vulnerable countries in Europe along with Baltic states for a hard landing following the global credit crunch, especially if FDI inflows slow. Bulgarian officials say they will work to further the improve business climate and keep attracting hefty foreign direct investment. The Socialist-led government sees FDI at 5.1-5.2 bln euro in 2007 and 2008.
December unemployment in Bulgaria slightly up
December 2007 showed a slight, but "typical end-of-year" increase in unemployment, a Cabinet media statement said.Unemployment offices had 255 910 people registered as unemployed in December. This was 10 635 or 4.3 per cent higher than the month before. Compared to the same period in 2006, unemployment was down by 81 886.In December 8976 people got jobs, the statement said, 88.5 per cent of these found work through placement offices of the labour office.Average unemployment in Bulgaria for 2007 was 7.75 per cent, which was 1.86 per cent lower than 2006.
Varna port to speed container handling ops
A special entry point at the Varna-West port will soon be designated for incoming containerised cargo trucks , said port executive director Danail Papazov. The port will also add a new center for the computerised processing of containerised cargo that will employ a company-developed software. The platform will enable shipment tracking in real time as well as online connection between the port, the forwarders, the customs and border control administrations and the container operators. The new system is expected to cut the layover of container trailers at the port from 12 hours to 40 min. The Varna port processed 104,000 TEU of cargo in '07, up 14% y/y.
Grain import from outside EU
Poor harvest caused by the drought last year will necessitate grain import for the production of grain fodders, experts say. The most advantageous option is import from Russia or Ukraine. At the beginning of January Ukraine had already approved the export of 1.2 mln tons of grain. In February Bulgaria will call for another 200 tons of corn.
Rusian Minister of Agriculture Aleksei Gordeev said in Berlin that by the end of January the Federation will export 12.5-13 mln tons. “We will have to limit the export”, he added. According to him the limits will be lighter by April with the analysis of the forthcoming harvest. Recently Moscow raised the export tax from 10% to 40%. Due to poor snowfall in both Russia and Ukrainian the crops are threatened by frost. We have good chances to import grain at advantageous terms from Russia and Ukraine who have vast sown fields. In case that the harvest analysis by the end of March is good, they will open their reserves for export. Bulgarian national reserve might import Ukrainian wheat on a lower price in January, because Kiev intends to open its market by the end of the year. Wheat price in Ukraine is currently USD 268/ton, while in Bulgaria it is USD 368/ton. In December the European Commission declared temporally removal of import duty on wheat from third countries into the Union. Wheat price in the USA is USD 344/t, in France – USD 350/t, in Germany – USD 360/t, in Russia USD 256/t. In Bulgaria the prices of corn and wheat are almost equal – USD 460-490/t.
Medical war looms over privatization
The privatisation of medical establishments in Bulgaria will take place in 2008, unless the incumbents get scared because of the pending election in two years, the director of First Obstetric & Gynaecology Hospital St Sofia, Metodi Yankov, told the Pari daily. In his opinion, the sell-off is expected to temporarily disturb the operation of healthcare facilities.The diagnostic and consulting centres (formerly known as clinics) have to be privatised first to ensure the smoother change of ownership. All municipal-owned hospitals have their own centres that provide outpatient medical aid. The full or partial privatisation of hospitals has to come at a later stage. According to Yankov, Sofia needs new medical establishments, because there are some large residential districts without a hospital.Once private, the diagnostic and consulting centres will become more sensible to the competition of other medical facilities, such as group practices. A short medical war over laboratories and equipment may loom, but it will be healthy. At least 50% of the space in the clinics will be used better. The buildings can accommodate child or adult day care facilities, hospices etc., Yankov pointed out. However, investors will have a lot of work to do, because the former clinics badly need repairs and modern equipment.
The receipts will depend on the manner of privatisation that will be chosen: by auction or tender. Other ways for changing the form of ownership of medical establishments are concession and public-private partnership. For the time being no preferences are envisaged for doctors and medical associations. However, it is all up to the parliament.
Bulgaria to develop trade relations with Iran
Islam Republic Iran has a significant role in the Near East processes, claimed Solomon Passy, chairman of Bulgarian Parliament Commission for Foreign Policy. Iran's role is effective and indisputable, claimed Passy on his meeting with Iranian Minister of Foreign Affairs Manouchehr Mottaki yesterday.The Bulgarian politician expressed his satisfaction with the extending relations between both countries.On his side, Mottaki pointed Iran's strategy previews extending of trade operations with countries from the European Union, which includes Bulgaria. Bulgarian Parliament Commission delegation was in Iran by the invitation of National Security and Foreign Policy Commission chairman Ala'eddin Boroujerdi.The intergovernmental meeting continues on Bulgarian land.
Bulgaria to support transfer of Iran's gas and oil to Europe
Head of Expediency Council Akbar Hashemi Rafsanjani said on Tuesday that Bulgaria can play a major role in promotion of Iran's economic relations with Europe. "As a gate to Europe, Bulgaria can play a major role in promotion of Iran's economic relations, particularly in the field of transferring the country's oil and gas to the continent," Rafsanjani said. He made the remarks in a meeting with the visiting head of Bulgaria's parliament foreign policy commission, Solomon Passy. Stressing the significance attached by Iran to promotion of bilateral ties with Bulgaria, the cleric said that further cooperation between the two capitals could benefit their mutual interest. Referring to the situation of Muslim minority in Bulgaria, Rafsanjani said the peaceful co-existence among different religious minorities in that country "is a strong point for Sofia." Meanwhile, the Bulgarian official said for his part that Sofia is interested in further strengthening its ties with Tehran as a country with rich civilization. Passy arrived here on Monday heading a Bulgarian parliamentary delegation upon the invitation of his Iranian counterpart Alaeddin Boroujerdi.
Bulgaria to derive 1/6 of domestic power from renewable energy sources
The share that power from renewable energy sources (RES) has in Bulgaria's overall domestic consumption should reach 16% by 2020. This target is likely to be set in the package with legislative measures to fight climate change that is expected to be announced by the European Commission on Wednesday. According to Bulgarian diplomats that took part in the negotiations, although the target is the minimum that could be assigned to Bulgaria, it would still be difficult to achieve. RES power currently accounts for around 8% of Bulgarian domestic consumption. A Bulgarian environment expert at the council of EU ministers said Bulgaria would find it tough to double its RES output due to its low GDP in EU terms, the economic growth outlook of the country and the limited opportunities for RES deployment.The likelihood that 34% of Bulgaria's territory could potentially be designated a protected status under the Natura 2000 program indicates limited opportunities for the construction of hydro power stations and wind parks, said the expert. Bulgaria is also expected to be allowed to increase greenhouse gas emissions by up to 20% by 2020 over 2005 levels under the energy and climate change plan since it is considered by Brussels to be in greater need to catch up in economic development. The leeway will benefit sectors of the Bulgarian economy that are not covered by the emissions allowance trading system: agriculture, transport and waste management. Bulgaria will also attempt to change its emissions reference year from 2005 to 2007 since it is the first year for which there was available independently-certified emissions data as required by Brussels.
EC increases Bulgaria's greenhouse gases emissions quotas
Bulgaria was allowed a 20-percent increase of waste gases emissions quotas after 2013, as the European Commission decided on the individual quotas for each country. Richer countries will have to reduce their emissions. on the other hand, poorer states, like Bulgaria and Romania, will have the right for higher quotas that would allow them to develop their economies and thus catch up with the other EU members.
Bulgaria believes the full harmonization of the European emissions trading scheme and the complete abandonment of the national plans after 2013 is a challenge. This would mean that the Bulgarian enterprises would be treated on equal footing with all other companies in the scheme. Brussels cut down by 37 percent the quotas Bulgaria asked for and that made Sofia start a lawsuit against the European Commission in the Luxembourg Court.
Some 44% of consumers look for quality life
Bulgarians are beginning to look like Europeans in that they view their apartments as a market product. Bulgaria is among the countries with the biggest share of own homes but there is a slight trend to a decrease, the director of market research company Synovate, Stoyan Mihaylov, said. Less and less people own two homes.Some 44% of consumers here resemble the people in Western Europe. These are the 'new Europeans in Bulgaria,' who look for a quality life and whose incomes exceed BGN 500 a month, the director of sociological agency Noema, Divil Kulev, said. The share of households with a monthly income above BGN 2,000 jumped from 1% in 2006 to 3% last year.Bulgarians still spend the bulk of their incomes on food (35%) and utility bills (30%), Synovate data show. However, they already use part of their incomes for travel, education and savings, too.
The share of households with internet access increased from 33% in the first half of 2007 to 36% in the second half of the year, Mihaylov pointed out. At the same time the number of people using mobile telephones remained unchanged (88% of the population).
EEA Sits in Sofia
The first session of the Committee on observation on the financial mechanism of the European Economic Area (EEA) will be held today in the Ministry of finance, informed the the ministry's press service. The ministry informed that there will also be a call for project proposals on the EEA Financial mechanism. The duration of the procedure will be 3 months. At the end of the committee's session, there will be a press conference given by the minister of finance Plamen Oresharski.
EBRD supports Bulgarian energy savings market
The EBRD is supporting the development of the market in Bulgaria to promote energy efficiency, with a loan to the Bulgarian ESCO fund – Energetics and Energy Savings Fund SPV (EESF), a special purpose company to finance the energy services business of Enemona AD, a construction and engineering group.Typically the fund has supported energy efficiency projects in kindergartens, schools, hospitals and other public buildings. The 7 mln euro loan will help provide Enemona with the long-term capital it needs to expand its ESCO (Energy Service Company) business in Bulgaria which provides energy saving services to clients in the public and private sectors, the EBRD said in an official press release. The proceeds will be used to purchase receivables from energy performance contracts carried out by Enemona, the fund’s majority shareholder. Since its establishment in 2006 EESF has purchased receivables under more than 20 Energy Performance Contracts (EPC) with a total nominal value exceeding 8 mln levs. This loan will be crucial in enabling Enemona to scale up its energy services business in Bulgaria said Dichko Prokopiev, Chairman and Chief Executive Officer of Enemona. Enemona is one of the first Bulgarian ESCOs and among the pioneers implementing an EPC with guaranteed results in municipal buildings, said the EBRD. Under the EPC ESCOs enter into contracts with the final beneficiaries whereby the ESCO company is responsible for designing, implementing and financing a project for decreasing the overall energy consumption of the beneficiary. The ESCO company is repaid through the project savings which are defined in the EPC. The Bulgarian government has already undertaken several key measures to combat energy wastage in the country where energy consumption per unit of GDP remains well above the average for other EU states. The EBRD has supported these steps with investments in the Bulgarian energy efficiency sector. Recent projects have included credits to finance hydro power plants, an increase of grant funds for residential energy efficiency and moves to support the carbon trading market linked to renewable energy projects.
EBRD to lend � 53.7 M to Sofia water distribution utility
EBRD will lend EUR 53.7mn to the water supplying company in the capital city Sofia , Sofiiska Voda. Some 48% of the loan will finance part of the EUR 128mn 5-year investment programme of the company while the remaining funds will refinance a previously disbursed syndicated loan. The financing will support repair and modernisation works for the supply and sewerage system in the capital city. In addition, the municipality will use ISPA and EIB financing in the amount of EUR 58.5mn for upgrading the waste-water plant. The project is expected to amount to a total of EUR 190mn. The water utility is managed by a UK-owned company under a long-term concession contract, which has been frequently attacked by various political lobbies presented in the city council.
EBRD: Bulgaria to face hurdles in providing capital inflow from abroad
The EBRD is still expecting the countries of eastern Europe and the former Soviet Union to perform well despite recent turbulence in worldwide financial markets, although the region will not be totally unscathed. “The region is holding up well, but it will be affected”, the Bank’s Chief Economist Erik Berglof said on Wednesday. As a result the EBRD is expecting lower growth in the region this year of about 0.5 percentage points.
In its latest Transition Report, published in November, the EBRD forecasted average growth in its 29 countries of operations – covering central and eastern Europe, south eastern Europe, Russia, Ukraine, the Caucasus countries, Central Asia and Mongolia – in 2008 to be as high as 6.1 percent (after 7.0 percent in 2007). The Chief Economist is now expecting this figure to be 5.5 percent. However, “this is still a fast growing region with strong fundamentals”, Mr Berglof stressed. Mr Berglof says a number of countries, Bulgaria being one of them, will be finding it increasingly difficult to secure foreign capital inflows in 2008. In his words the currency board in Bulgaria has been acting as a shield for Bulgaria thus helping the country to evade effects that were felt in Romania and Serbia.
INVESTMENTS:
Investments expected in auto parts, wind parks
Attracting more investments in the production of auto parts is one of the goals of InvestBulgaria Agency this year, the agency's executive director, Stoyan Stalev, said. We already have a few such projects but more interest is expected from German businesses in the sector, he added.In 2008, strong investment activity can be expected in the area of renewable energy sources, more specifically in the construction of wind parks, Stalev pointed out. The agency has certified a lot of such projects but none of them has been implemented so far. Investments in Bulgaria in 2008 will increase by some 10%, Stoyan Stalev forecast.According to recent legal amendments, the state will encourage sectors that generate high added value, such as high technologies, industry, medicine, energy etc. Projects in tourism and construction will not longer be a priority. The thresholds for project certification have also been changed. A B class certificate will be issued to projects worth EUR 25 to 35 million, while bigger projects will be certified class A. The investors developing such projects will have right to eased administrative servicing and infrastructural aid.
Jan – Nov 2007 Foreign Direct Investment in Bulgaria at BGN 5.05 Bln
According to preliminary data released by the Bulgarian National Bank, foreign direct investment in the country for the January – November 2007 period amounts to EUR 5,050 million (17.7% of GDP) compared to EUR 3,864.7 million (15.4% of GDP) in January – November 2006.Attracted equity capital (acquisition/disposal of shares and equities in cash and contributions in kind by non-residents in/from the capital and reserves of Bulgarian enterprises and receipts/payments from/for real estate deals in the country) between January – November 2007 amounts to EUR3,104.1 million and accounts for 61.5% of all FDI. This is a hike of EUR 1,275.1 million compared to the same period 2006 (EUR 1,829 million). Receipts from real estate sales to nonresidents are included in the equity capital and stand at EUR 1,552.2 million versus EUR 1004.3 million for January – November 2006. For the period January – November 2007 attracted equity capital in privatization deals with non-residents, acquiring more than 10% of the equity in a Bulgarian enterprise, amount to EUR 86.5 million. Attracted equity capital in non-privatization deals totals EUR 3,017.7 million, compared to EUR 1,616.7 million for the same period of 2006. Other capital, net (the change in the net liabilities of the direct investment enterprise to the direct investor on financial loans, suppliers’ credits and debt securities) amounted to EUR 1,667.4 million (net) for the period January – November 2007, against EUR 1,774.7 million for the respective period 2006. According to preliminary data, reinvested earnings (the share of non-residents in the undistributed earnings/ loss of the enterprise) between January – November 2007 are estimated at EUR 278.5 million versus EUR 261.1 million for the same period of 2006. By country, the largest investments in Bulgaria for the period came from the United Kingdom (17.1% of the total foreign direct investment), Austria (8.3%) and Greece (7.9%). Direct investment abroad stood at EUR 158.6 million for the same period, compared to EUR89.1 million reported in Jan – Nov 2006.
London - Investor No 1 in Bulgaria?
UK is expected to be investor No 1 in Bulgaria for 2007, preliminary data of Bulgarian Investments Agency shows. Austria ranks first on investments value from 1992 until 2007 with entered 4 billion EUR investments, followed by UK with around 2,4 billion EUR.The sum marks growing tendency in preparing the agency's final data. Third on investments are Holland, followed by Greece and Germany.In 2007 the total value of 62 investment projects goes to 10 billion EUR.
Varna business center receives investment certificate
Bulgaria's investment promotion authority is to present Thursday a First Class Investor certificate to the developers of a new multi-use center in Varna. Projects of this type lost eligibility for state support with changes to the Investment Promotion Act that took effect on September 1, 2007. But since the business center applied for the certificate in mid-2007, the procedure had to be completed under the superceded law.The certificate will be handed to businessman Mihail Mikov, owner of Bulbrew, the maker of beer brands like Varna, MM and Ledenika.The 97.4 mln lev multi-purpose center will be built on the site of the former Dimiat wine plant. In addition to office and retail premises, the center will also offer business hotel, warehousing facilities, heli-pads and restaurant.
E.ON Bulgaria to build wind farms
E.ON Bulgaria will build three wind farms near the Black-Sea coast, the chairman of the company's board of directors, Manfred Paasch, said. The construction of small parks with a couple of generators and total capacity of 5 to 8 mW will begin in 2008. At a later stage the company will build wind facilities with capacity ranging between 100 to 150 mW.
The 2008 investment budget of E.ON Bulgaria amounts to nearly BGN 60 million, Paasch went on to say. The amount exceeds last year's investments by BGN 9 million. As much as BGN 10 million will be used for maintenance of the electricity distribution grid. Another BGN 20.7 million will be injected in key projects and BGN 28.8 million in development and modernisation of the network.
Two solar stations to be built in Pirin mountain
Two solar station for the production of power will be constructed in Pirin by the end of the year, informed “Viara” newspaper.So far 51 companies take care of 70 small water-power plants in the region. According to the experts there are no attractive places around the mountain streams for new plants to be built. Thus, the putting of panels which to transform the sunlight into power, is the most alternative method at the moment. A map of the country, which gives clarity as to where it is most proper the equipment to be put, has already been made.The Kresna-Sandanski region in Pirin is pointed as the most favorable place for putting solar panels. The assessment was made on the number of sunny days during the year and the cleanness of the air and the lack of plants which to pollute the environment.The first two solar stations are expected to be built in the region of Sandanski and Gotse Delchev.Initially the power of the stations will probably hardly exceed 1-1.5 megawatts, forecast the experts. Stations of this size pay the invested money in 5 to 7 years. According to the experts the life of the solar panels is 40 years, which means that apart from being very environment-friendly, they are also a continues and winning business.So far, the solar and the wind energy make for 0.04% of the total amount of produced power in Bulgaria. The EU's requirement is till 2010 at least 11% of the produced energy to be from renewable sources.
Liebherr to invest another �35M in Plovdiv
Germany's Liebherr Hausgerate, which has a refrigerator plant in the Bulgarian city of Plovdiv, will invest some EUR 35 million in operation expansion in 2008, the company's procurator for Bulgaria, Gerhard Gruber, said. on Thursday, Liebherr received the big prize of the German economy in Bulgaria for 2007 from the German-Bulgarian Chamber of Industry and Commerce in the category of big enterprises. In Gruber's words, Liebherr's turnover reached EUR 113 million in 2007, up by 35% compared with 2006.
Finding qualified staff is one of the main problems of the company, Gruber pointed out. In March we will deliver new equipment for EUR 3 million but in order for the investment to be efficient we have to find workers who can operate the machines. Therefore Liebherr plans to organise its own training programmes and set up a centre for staff training.Elittour was name winner in the category of small and medium enterprises. The company is general agent for Bulgaria of Britain's Thomas Cook. The prize in the category of non-members of the chamber went to Petrov P.M., which manufactures elements for Germany's Bosch.
Ciccolella to invest �150M in rose growing
The Italian company “Ciccolella” wants to produce ornamental roses in greenhouses in Bulgaria, informed BTA.Today the company's president Vincenzo Ciccolella signed a Memorandum for pre-project research with eng. Enriquo Viale – executive director of “ENEL Maritza Iztok 3”.On an area of 70 hectares 50 million roses can be produced annually. The investment is for 150 M EUR. 300 new work places will be opened in the greenhouses, pointed Mr. Ciccolella.The Italian company is established 40 years ago and grows 60 types of ornamental roses, which it sells in Europe. Small amounts are sold on the Bulgarian market but by Dutch traders. “ Ciccolella” grows the roses in water, not on the ground. The project envisages the steam from the “ENEL Maritza Iztok 3” to be used.
Central Rаilway Station in Sofia аttracts �95 M in 2 Years
Area round capital's central railway station and the Northern part of Sofia will slightly turn into new city's administrative, industrial-logistic and business center with housing estates. This new city body is expected to attract over 190 million BGN (95 million EUR) investments, money.bg informs.The reconstruction and modernization of the Central Railway Station building itself will cost 40 million BGN (20 million EUR) and its implementation will be ready in 2 years. The projects are already clear, Transport Ministry previews-also. National company ‘Railway Infrastructure' owns 28.2 hectares of the terrain, which include the station building, the tracks, the not built terrains and storehouses.
BGN 9m to be invested in business park in Targovishte
Sofia-based company Greenfield Bulgaria will invest nearly BGN 9 million in the setting up of a business park in Targovishte. The park will feature commercial, office and warehouse space. The project will be implemented on two land plots sold to the company by Targovishte municipality for BGN 1.55 million. Greenfield Bulgaria plans to build a logistics park, a warehouse base, a parking lot and a petrol filling station within the next five years as part of the project. The company will use the other land plot to set up administrative buildings and several hyper-markets.
COMPANIES:
German Economy Awards in Bulgaria 2007
The German-Bulgarian Chamber of Industry and commerce will honor three companies with the award of the German economy in Bulgaria for 2007 at an official ceremony in Sofia, informed BTA.The awards are in three categories: for members of the chamber-big or small and medium enterprises, and for non-members of the business organization. The distinctions are for projects and activities that help boost the business contacts between the countries. It is expected the awards to be handed in by the Bulgarian president Georgi Parvanov.
Bulgarian companies become more digital
The use of information technologies by Bulgarian companies is growing, data of the National Statistical Institute show. A total of 85% of the Bulgarian companies used computers at one or another point in 2007. More than 99% of the large-scale companies rely on computes. The figure remains unchanged from 2005. The internet penetration rate among Bulgarian companies went up by 14.1% to 88.1% as at the end of 2007. The quality of the internet connection has also improved considerably. A total of 41% of Bulgarian companies used DSL internet connection. The share of companies using a modem to connect to the internet went down from 39% in 2005 to a mere 18.1% in 2007. More than 60% of Bulgarian entrepreneurs used the internet to get in touch with the public institutions in 2007. The interest in the electronic signature is also growing. A total of 39% of the companies had an electronic signature during the last year.
The shares of Bulgaria's Top 100 companies slump by 22%
The shares of Bulgaria's top 100 most profitable companies went down by 21.7% on the average on the Sofia Stock Exchange in the period from last November until January 16, shows a research of Investor.bg. This negative tendency started on the last day of October 2007 and continued until last Wednesday, when a record slump in the prices of their shares was registered.The ten companies that registered the most drastic devaluation of their shares are: Zaharni Zavodi PLC (-60.24%), Alfa Wood Bulgaria AD (-51.04%), Chimco (-50%), Asenova Krepost AD-Asenovgrad (-44.18%), Metizi JSC (-44.08%), Lesoplast PLC (-43.26%), HIDROPNEVMOTEHNIKA JSC (-42,81), Kremikovtsi JSC (-42.17%), Industrial Holding Bulgaria (-39.17%) and Elma (-37.62%). The average devaluation of these companies' shares over the past two months and a half was 45.46%.
Bulgarian-German JV to build profiles plant in Pleven
Fischer Profil, the German manufacturer of wall and roof elements for industrial buildings, has teamed up with local company Horizont-Ivanov to build a factory for steel profiles in Pleven, Northern Bulgaria. The investment will be the German company's first in Eastern Europe. The 10 mln euro factory will be sited in the Pleven industrial zone on 10,000 sq m. It will have an annual capacity of 100,000 tons. The assembly of the first three production lines will begin in mid-'08 with trial testing scheduled to begin in late September. A further two lines will be added at a later stage.
Over 40 companies interested in business zone in Simitli
More than 40 Bulgarian and foreign companies have expressed interest in purchasing land and operating in the future business zone in Simitli, mayor Apostol Apostolov said. The project is being implemented on a 17.6-ha land plot formerly used by the military. Companies from Blagoevgrad region and Sofia, as well as consortiums from Belgium and Spain are interested in the new zone. Simitli and Razgrad are the only municipalities in Bulgaria included in EU's project for conversion of former military bases. The first stage of the project in Simitli has been completed and the first companies will move in the former modernised buildings formerly used by the military. An upgrade of the existing water supply and sewerage system and the power supply network has already been carried out with EUR 2.245 million funding obtained under the PHARE programme. Further EUR 2 million are needed for the completion of the reconstruction of more buildings, the telecommunications network and the main road to the business zone, Apostolov said.
Minister proposes not to privatise two companies
Two state owned companies, Avtomagistrali and Technoexportstroi, will not be sold despite earlier plans.On January 20, Regional Development Minister Asen Gagaouzov announced he sent a letter to the government and to Economy and Energy Minister Petar Dimitrov in which he proposed not to privatise the two companies, Dnvenik daily said.The two companies would not be taken off the list of companies blocked from being privatised under the Law on privatisation and post-privatisation control, Gagaouzov told Dnevnik.It had already been decided that Technoexportstroi would not be sold, Gagaouzov said.Technoexportstroi was partner in two strategic projects, namely the concession for the Trakiya highway and the construction of the Bourgas - Alexandropoulis oil pipeline. According to Gagaouzov it would be better to sell the company at a later stage, when there would be concrete results from projects in which it takes part, as that would increase the value of the company.In late 2007 government announced it would take around 30 companies off the list of companies that could not be privatised. The precise number and list of companies to be privatised was still being prepared by ministries and would be announced when it would be taken to parliament, Dnevnik said.
Sale of debt-ridden Sofia Heating Plant draws huge interest
The sale of Sofia heating utility plant, considered to be one of Bulgaria's last big energy privatisation deals, has triggered huge interest among investors, the mayor of the capital said. Five companies have already declared interest in the privatisation of Toplofikatsiya-Sofia, Boyko Borissov said at a seminar that discussed the capital budget for 2008. The sale of Toplofikatsiya-Sofia will be managed entirely by Sofia municipal privatization agency, while state officials will provide only expertise, the mayor added. Sofia municipality, a majority owner of the plant, Toplofikatsiya Sofia, and the economy ministry, which holds a 42% stake, agreed at the beginning of January to sell a 100% stake in the debt-ridden plant. Borissov assured that the sale contract will provide for strict post-privatisation control."It was namely because of lack of post-privatisation control that most major privatisation deals in Bulgaria failed.Toplofikatsiya-Sofia, which has been in the news for over a year after it was found drained to the brink of bankruptcy, provides heating to about 400,000 households in the capital Sofia. Plans for the privatisation of Sofia's heating utility company collapsed last year over a consultancy fee. Its sale is considered to be one of the country's last big energy privatisation deals.
'Stroytransgaz' plans active participation in Bourgas-Alexandroupolis
The Russian construction and engineering company Stroytransgaz plans to actively participate in the in the construction of the Bourgas-Alexandroupolis oil pipeline, informed the press service of the enterprise, cited by BNR. The company will use its experience in the implementation of projects in the petrol and gas fields in Greece. “Stroystransgas” was included in the three party working committee between Russia, Bulgaria and Greece on the preparation of a concept for the Bourgas-Alexandroupolis project.
Burgas – Alexandroupolis to be built by Bulgarian companies
After the signing of the agreement between the participants in the international project company Burgas – Alexandroupolis the registration of the company in Amsterdam lies ahead, preparation of a work schedule, assigning of pre-project research on the pipeline, preparation of technical and economic grounds for the pipeline and finding financing institutions, Head of the political cabinet of Ministry of Regional Development and Public Works Stefan Gunchev said for Darik radio. At the end of the term Transneft should present at the international project company contracts for oil deliveries needed for the functioning of the pipeline, he added. He considers that the launching of the project would not be earlier than six months after the registration of the company. For the construction of the pipeline in the attachment towards the intergovernmental agreement is mentioned that the companies from the participating states would have priority. Mr Gunchev said that their desire was Burgas – Alexandroupolis to be built by Bulgarian companies.
British company to drill for gas in Bulgarian Black Sea
British company Melrose Resources announced on January 21 that it plans to start extracting gas from a Black Sea field off Bulgaria by mid 2009, Associated Press said.The announcement followed a successful exploration project.A company media statement said the exploration well was near the Galata gas field. "Due to the high quality of the reservoir, flow testing was not required and the well has been suspended for use as a production well," the media statement said.The company estimated the reserves in the immediate vicinity of the well at 198.2 million cu m, saying there was an "additional upside in the field" of over 1.132 billion cu meters.The total size of the field would become clear after a period of production, the media statement said.Bulgaria, which was almost completely dependent on energy supplies from Russia, opened its Black Sea shelf for exploration in 2001, AFP said.
Sisecam to build fourth plant in Bulgaria
Turkey's Sisecam will build a plant for vehicle glass near the town of Targovishte. The company already has three glass plants in Bulgaria through its local subsidiary Trakia Glass Bulgaria. The new facility will start operating in the last quarter of 2008. It will employ 320 people.The Turkish holding plans to have a total of seven plants near Targovishte. Since 2005 Sisecam has invested more than USD 220 million in Targovishte.
Petrov PM co to open new components factory
Petrov PM, the Bulgarian manufacturer of machine components, will launch a new production facility in Sofia in early '09, said company president Petar Petrov. The company has bought a old factory near Sofia which will be overhauled into a contemporary production facility by the end of '08. The new plant, for the manufacture of metal-working equipment, will be the third in the Petrov PM group. The other two factories make machine components for Germany's Bosch Rexroth Mechatronics. The Bulgarian company romped to an output growth of 25% in '07 with sales estimated at over 3.5 mln euro. Petrov PM currently churns out around 250,000 machine components annually. Output is projected to increase 15% in '08.