Bulgaria’s ad hoc parliamentary committee tasked with investigating the circumstances of the proposed sale of electric utility CEZ’s assets in Bulgaria held its last meeting on May 10, adopting a report that will be forwarded for approval by the Parliament as a whole.
Since it was set up in mid-March, the committee has held several meetings but its work has uncovered little information that was not previously known. Its chairperson, socialist MP Zhelyo Boichev blamed the committee’s underwhelming findings on the fact that several of its avenues of inquiry were rebuffed.
CEZ itself and the proposed buyer of its assets, Bulgarian firm Inercom, as well as some of the banks reported to be financing the deal had declined to provide information, Boichev said, as quoted by Bulgarian National Television.
As such, the committee’s stated goal of increased transparency about the deal and the source of the funding was only partially achieved, he said.
The committee’s final report, yet to be made public, is set to make a set of recommendations to state institutions, though it was unclear how some of those recommendations – such as requiring the government to carry out an in-depth analysis of the goals set out in the electricity distribution companies’ privatisation strategy – would help increase transparency in the CEZ deal.
One recommendation regarding the proposed transaction, namely which institution was to draft the regulatory criteria under which the Energy and Water Regulatory Commission would assess this and future deals in the energy sector for approval, stirred much debate.
Amendments passed by Parliament last month stipulate that the regulator must approve any deals that involve a stake of 20 per cent or larger in electricity, gas or central heating distribution companies, but did not set the criteria under which EWRC is to do so.
The debate in the ad hoc committee centred on whether the list of criteria should be drafted by the executive branch of government or Parliament. A proposal for the Energy Ministry to draft the criteria for approval by Parliament was dropped from the report, news website Focus reported.
Czech state-owned CEZ announced its intention to exit the Bulgarian market in February, triggering a political storm amid fears that the prospective new owner, little-known Bulgarian company Inercom that was set up last year, lacked the necessary know-how to ensure that there would be no disruption in the quality of service. CEZ’s power distribution unit services western Bulgaria, including the capital city of Sofia.
Questions were also raised about the source of Inercom’s financing for the deal – the company’s owner said it would be funded partially using its own equity and using bank loans – with some media reports suggesting that Inercom may be a stand-in for other, unknown interested parties.
(Bulgarian Parliament. Photo: Clive Leviev-Sawyer)