Uncategorized

Bulgaria set to sell disco stakes

6 June 2003 – A partial privatization of Bulgaria’s power sector is planned next month when stakes in seven of the countries state-owned distribution utilities will be offered for sale. The sale was announced by the Energy Ministry on Thursday and is part of plans to liberalise the sector and boost its efficiency.

Bids would be collected by September and sale contracts should be signed by end-year under a sell-off strategy approved by the government, a ministry press official said.

The Balkan state covers nearly half of the region’s annual power deficit with exports, but has been criticised by foreign donors and the European Union, which it hopes to join in 2007, for being slow to restructure the sector.

Earlier on Thursday, fellow EU aspirant Romania also said it expected to privatise two power distribution firms in November, hoping it would spur reforms in its cash-strapped energy sector.

Bulgaria’s reformist government, which took over two years ago, had initially pledged to launch the privatisation of the seven electricity distribution companies in 2002.

Bidders would have to meet certain requirements, such as amount of electricity sales last year, size of equity capital and experience in liberalising power markets, the government said in a statement but did not give more details.

The seven distribution firms raised their 2002 pre-tax profit to 105m levs ($64m) from 31 million levs a year earlier mainly due to hikes in government-controlled power prices for households, the ministry has said.

The government plans another 15-percent rise in power prices for households next month.