Nine banks show interest in loan to Bulgarian Energy Holding – minister

Nine international banking institutions have shown interest in direct talks to extend a loan to the Bulgarian Energy Holding (BEH), Energy Minister Temenouzhka Petkova said on December 7.

BEH, the umbrella corporation for state-owned assets in the energy sector, wants to borrow up to 650 million euro. Earlier plans to issue a corporate bond drew little interest from prospective lead managers, who asked for government guarantees for the bond issue, as did BEH’s subsequent attempt to contract a syndicated loan.

Last month, the holding company invited 25 lending institutions to participate in negotiations and a schedule of talks is currently being drawn up, Petkova said.

The bulk of the money would be used to pay the debt accumulated by state electric utility NEK, which is a subsidiary of BEH, to two coal-powered thermal plants owned by US private investors – AES Maritsa Iztok 1 and ContourGlobal Maritsa Iztok 3. Full repayment of NEK’s debts is the main condition to reduce electricity purchase prices from the two plants, agreed in April.

However, due to the failed earlier attempts to raise the funds, the current repayment deadline of end-2015 could not be met, Petkova said on the sidelines of an energy forum in Sofia, as quoted by Bulgarian National Radio. AES has already agreed to extend the deadline to end-February 2016, while talks with ContourGlobal were still underway, she said.

NEK’s debt to the two power plants continued to grow this year and now stands at 950 million leva, or about 485 million euro, Petkova said. This has prompted BEH to revise upward the amount it needs to borrow, from 400 million euro initially envisioned at the time the agreement with the two power plants was signed.

Petkova re-iterated the Cabinet’s stance that no government repayment guarantees would be offered for the loan.

(AES Maritsa Iztok 1 power-plant in Gulubovo. Photo: Gonzosft/Wikimedia Commons)



The Sofia Globe staff

The Sofia Globe - the Sofia-based fully independent English-language news and features website, covering Bulgaria, the Balkans and the EU. Sign up to subscribe to's daily bulletin through the form on our homepage.