Bulgaria: Parliament approved financial aid to NEK

, SEE Energy News

The Bulgarian Parliament has approved a draft bill on granting financial for the payment of the debt of the National Electric Company (NEK). The nonrefundable financial aid from the state budged will be used in order to repay the company’s debt under the arbitration ruling on NPP Belene project.

The conditions for granting the aid will be determined by the Council of Ministers on the basis of an agreement between the Ministry of Energy and NEK, approved by the Council of Ministers. However, the aid will be granted only after the approval by the European Commission. NEK will not pay interest on the aid and the company will not provide collateral.

During the debate in the Parliament, the opposition voiced their concerns over the fact that the amount of financial aid to NEK is not fixed.

In related news, the Bulgarian Government announced that it did not appeal the ruling of the International Arbitration Court in Paris, according to which Bulgaria has to pay over 630 million euros (with interest) to Russian company Atomstroyexport (ASE) for the manufactured equipment for the cancelled nuclear power plant Belene project.

In mid-September, Bulgarian Minister of Energy Temenuzhka Petkova announced that the country will pay 400 million euros to Russia, which represents the main part of the debt ruled by the Arbitration Court for the manufactured equipment for cancelled nuclear power plant Belene project, by the end of 2016. Previously, she argued that Bulgaria considers an interest rates regarding the arbitration ruling on abandoned NPP Belene as miscalculated. She explained that a technical error allowed the Arbitration Court to set a compound interest, which is not in accordance with the Bulgarian national legislation. Compound interest is calculated on both the initial principal and interest already accumulated from previous periods of a deposit or a loan. She said that the interest rate calculated for the period after 2 July of some 82 million euros is questionable, adding that the final sum may be reduced but did not disclose the exact amount. The initial principal in the ruling was 500 million euros, which was increased to 550 millions euros with accrued interest. Daily interest rate amounts to 167,000 euros.