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Energy expert: The controversial amendment to the Energy Act concerning regulator’s interference in the CEZ deal poses risks to economy and investments

Energy expert: The controversial amendment to the Energy Act concerning regulator’s interference in the CEZ deal poses risks to economy and investments

1 June 2018 | 15:43 | FOCUS News Agency
Sofia. The controversial amendment to the Energy Act that was adopted hastily to provide the Energy and Water Regulatory Commission (KEVR) with a possibility to interfere in the deal between CEZ power utility and Intercom will be harmful, it poses risks to economy and investments in Bulgaria, Slavcho Neykov, an expert in energy policies, told Focus Radio.
The amendments were prompted by the need to ensure security of supply, protection of national security and public order, Neykov explained. “The text is filled with contradictions, it is unclear and unfeasible. It does not solve problems, it creates them, and if it is not repealed, there is a real risk that it will not only block transactions but could lead to serious financial repercussions for the state. And it is unfeasible because it introduces obligations to KEVR that the regulator cannot really fulfil – they contradict market principles by obliging the commission to intervene in deals between private entities,” Neykov explained, adding that adopting provisions in any law because of a particular deal is never a good practice. According to the expert, the amendments should be repealed as they could affect the reputation of Bulgaria as a good investment destination, which is not what the country needs now in view of the forthcoming discussions on major investment projects such as Belene NPP.
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Energy expert: Over BGN 1 billion at stake in case of arbitration over CEZ deal

Energy expert: Over BGN 1 billion at stake in case of arbitration over CEZ deal

23 May 2018 | 15:19 | FOCUS News Agency
Sofia. Over BGN 1 billion will be at stake in case of arbitration over the CEZ deal, energy expert Galina Alexandrova said, sharing her position on the matter.
“The most recent example of interference in private companies’ affairs, contrary to EU law, was the political pressure to halt the deal for selling the Czech power utility CEZ’s assets in Bulgaria. After the government backed down from its plans to get involved in the deal, CEZ and the buyer were interrogated by the parliamentary committee on energy, and an ad-hoc committee was set up to investigate the circumstances surrounding the deal,” said Alexandrova.
“Meanwhile, the Parliament has decided that the Energy and Water Regulatory Commission (KEVR) will have the power to rule on commercial deals. Transferring these powers to the CEZ deal, which in legal sense was closed with the signing of the contract, would be even a grosser interference in a private company’s affairs. And it will be a trump card for the Czech company, which in case of termination of the deal will file an arbitration case against Bulgaria. The buying company, Inercom, will also request arbitration for costs incurred and lost profits. Thus, the political short-sightedness and indecisiveness can cost over BGN 1 billion, which will be paid from the budget, i.e, by the Bulgarian taxpayers,” the expert commented.
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BSP sends to regulator petition against CEZ deal

BSP sends to regulator petition against CEZ deal

18 May 2018 | 17:43 | FOCUS News Agency
Sofia. The Bulgarian Socialist Party (BSP) has submitted a petition with 200,000 signatures against the announced deal for CEZ’s assets in Bulgaria, Focus News Agency reports. The petition was submitted to the Energy and Water Regulatory Commission (EWRC) because of its new powers to give consent to transactions with assets of energy companies, BSP MP Zhelyo Boychev told reporters. In response to comments from rival party GERB that there were still no criteria for EWRC to stop the deal, Boychev insisted that the regulator had new powers after the latest amendments to the law on energy.
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With 148 votes in favour and 48 abstentions, MPs endorse report of ad-hoc committee on CEZ deal and demand that electricity distribution companies be deemed strategic entities of national security

With 148 votes in favour and 48 abstentions, MPs endorse report of ad-hoc committee on CEZ deal and demand that electricity distribution companies be deemed strategic entities of national security

17 May 2018 | 12:36 | FOCUS News Agency
Sofia. With 148 votes in favour and 48 abstentions, the Parliament approved the report of the ad-hoc committee on the CEZ deal, Focus News Agency reports. Together with the report, the MPs adopted a draft decision, which instructed the Council of Ministers to carry out an in-depth analysis of the implementation of the government’s targets in the adopted privatisation strategy for the electricity distribution companies. The MPs decided that by 31 December 2018, the government would revise its ordinance on defining strategic sites, entities and activities of national security in the energy sector, including core assets and activities of the electricity distribution companies. The National Assembly decided that within the same timeframe the security services should provide a detailed analysis of the planned sale of CEZ Group companies, and the Bulgarian National Bank should provide information about the commitments made by the Bulgarian banks in the deal.
The ad-hoc committee on CEZ was established by a decision of the National Assembly on 14 March 2018. It was set up in response to a strong public reaction to the decision of the Supervisory Board of CEZ Group, published on 22 February 2018, which agreed to sell its assets to Inercom Bulgaria EAD. The report states that the committee focused its work on two main areas – the privatisation of the majority stake in the capital share of the electricity distribution companies in Western Bulgaria and clarification of all circumstances surrounding the planned sale of CEZ.

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Zhelyo Boychev, BSP: Committee on CEZ did not answer the questions of who and with what money is buying the assets

Zhelyo Boychev, BSP: Committee on CEZ did not answer the questions of who and with what money is buying the assets

10 May 2018 | 18:20 | FOCUS News Agency
Sofia. The inquiry committee on the sale of CEZ’s business in Bulgaria has failed to answer the questions of who and with what money is buying the assets, committee chairman Zhelyo Boychev, BSP, said. At its last meeting, the committee approved the report on the results of its work, which will be considered by the Parliament, Focus News Agency reports. The task was partially done, according to Boychev. The committee has found some weaknesses in the law and the responsibilities of the institutions. “There is still no closed deal, but in the end the committee was denied information, which I consider to be extremely wrong,” he stated. “I also do not accept that the Bulgarian special services have no information about the progress of or the involved in such deals. […] Without answering the question of who and how is financing the CEZ deal, we cannot be sure who the buyer is,” the chairman said. Then he said that by requesting information, the committee had received a response from only one bank. He thinks that the law on credit institutions should be amended in respect of the term professional secrecy.
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Committee chairman says financing institutions did not provide requested information on CEZ deal

Committee chairman says financing institutions did not provide requested information on CEZ deal

8 May 2018 | 16:52 | FOCUS News Agency
Sofia. Financing institutions did not provide requested information about the announced sale of CEZ’s business in Bulgaria, the chairman of the inquiry committee on the sale, Zhelyo Boychev, said after a meeting of the committee, Focus News Agency reports. According to Boychev, the committee cannot give necessary answers to Bulgarian people, as it was denied information on the grounds of professional secrecy. “At present they [Bulgarians] have reason for any doubts and speculation because of the lack of information, which was not provided to us by financing institutions to which we sent letters, including to the Bulgarian National Bank,” he said, adding that the Czech party had the complete information on the deal. According to Boychev, doubts remain about how the Bulgarian institutions paid attention to the sale and how the process could be controlled. He noted that it was not an ordinary commercial deal, as it was about a natural monopoly, a power distributor, and concerned security for Bulgarians and national security. “We have a number of unanswered questions, for example, how a firm of such size and with such assets can acquire such a strategic enterprise,” Boychev commented.
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Minister Temenuzhka Petkova: If buyer secures financing, CEZ deal will likely progress towards closing

Minister Temenuzhka Petkova: If buyer secures financing, CEZ deal will likely progress towards closing

18 April 2018 | 14:17 | FOCUS News Agency
Sofia. If the company seeking to acquire CEZ’s local assets succeeds in securing the financing it needs, the deal will likely progress towards closing, Energy Minister Temenuzhka Petkova said after the opening of a conference on Bulgaria’s oil refining industry, Focus News Agency reported. She commented that securing adequate financing was a responsibility of the candidate buyer. She mentioned that there were some indications from the seller that it might be considering negotiations with the bidder ranked second. “This is a procedure conducted entirely according to the rules of the Czech state and their laws. The Bulgarian state has no relation to this procedure,” Minister Petkova told reporters.
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Term of inquiry committee on CEZ deal extended till May 10

Term of inquiry committee on CEZ deal extended till May 10

18 April 2018 | 11:16 | FOCUS News Agency
Sofia. The Parliament extended the term of the inquiry committee on the CEZ Bulgaria sale until May 10, Focus News Agency reports. The extension was proposed by the committee itself, as it is waiting for additional information from the Ministry of Energy, the energy and financial regulators, the State Agency for National Security and other state institutions.
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Energy minister says Ginka Varbakova will not be the one to technically run CEZ’s operations

Energy minister says Ginka Varbakova will not be the one to technically run CEZ’s operations

17 April 2018 | 17:24 | FOCUS News Agency
Sofia. Energy Minister Temenuzhka Petkova said that Inercom’s owner Ginka Varbakova would not be the one to technically manage the power distributor’s operations, Focus News Agency reports. Speaking at the last meeting of the Parliament’s committee on the CEZ deal, the minister sought to reassure the people amid the sale to Inercom Bulgaria, saying that the state was controlling and regulating power distribution through the energy regulator. She explained that back in time Bulgaria had decided to privatise that energy segment with clear motives, known to the investors. “Now, when other companies are buying assets, the Bulgarian citizens should know that these companies have the necessary management,” she said.
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Milena Stoeva, Inercom Bulgaria: The competition regulator hasn’t yet made a decision on the CEZ deal

Milena Stoeva, Inercom Bulgaria: The competition regulator hasn’t yet made a decision on the CEZ deal

17 April 2018 | 16:22 | FOCUS News Agency
Sofia. The Commission on Protection of Competition (CPC) has not as of yet made a decision on the CEZ deal, Milena Stoeva, Chair of the Board of Directors of Inercom Bulgaria, said at the latest meeting of the ad-hoc committee on the CEZ deal, Focus News Agency reports. Inercom Bulgaria’s financial consultant Veselin Zahariev said that in terms of funding, things are moving in a more organised way. In his words, the talks are progressing. “We are waiting for the key moment - the CPC’ decision,” Zahariev commented.
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In a letter to parliament committee, CEZ says it repeatedly proposed to the state to buy assets, but the state was not interested

In a letter to parliament committee, CEZ says it repeatedly proposed to the state to buy assets, but the state was not interested

17 April 2018 | 15:53 | FOCUS News Agency
Sofia. In a letter to the Parliament’s committee on the CEZ sale in Bulgaria, the company says that since 2011 it has repeatedly proposed to the state to buy assets, but the state has not expressed willingness. This was stated by the committee’s chairman, Zhelyo Boychev, at the beginning of today’s committee meeting, Focus News Agency reports. CEZ also says that the potential buyers underwent standard checks by the company. The committee has also received a response from the Bulgarian prime minister’s office. It says that no talks have been held with the Czech government or CEZ for acquisition of the assets.
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Energy regulator to decide in a month whether to revoke CEZ’ licence

Energy regulator to decide in a month whether to revoke CEZ’ licence

13 April 2018 | 14:45 | FOCUS News Agency
Sofia. In a little more than a month, the Energy and Water Regulatory Commission (KEVR) will decide whether to revoke the license of CEZ power utility, Commission’s Chairman Assoc. Prof. Ivan Ivanov said in a statement, Focus News Agency reports.
“The experts who have been looking into the documentation related to the revocation procedure of CEZ's licence told me they have completed their work, and on Monday I will issue an order for a working group that will draw up a report. The procedure requires, once the report is made, it should be made available to the KEVR members and then they will make a decision at a meeting,” Ivanov said.
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Zhelyo Boychev, BSP: We will ask to extend term for committee on CEZ by a month

Zhelyo Boychev, BSP: We will ask to extend term for committee on CEZ by a month

12 April 2018 | 14:09 | FOCUS News Agency
Sofia. MP Zhelyo Boychev said he will most probably ask the Parliament to extend the term of the committee on the CEZ sale in Bulgaria by one month. Until now, the committee has requested information from the prime minister, banks, regulators and the prosecutor general. It has also requested information from CEZ Group about their negotiations and conditions to potential buyers. “We expect answers to many important questions from the institutions,” said Boychev, who is committee chairman and MP for the Bulgarian Socialist Party (BSP), quoted by Focus News Agency. The committee wants to know if there were any talks between the Bulgarian government and the Czech government or CEZ on the local assets of the company. They are also waiting for a response from the Bulgarian Development Bank in connection with the deal, as well as from the energy regulator about CEZ’ investments since 2005.
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BSP wants explanation for shift in government stand on CEZ deal

BSP wants explanation for shift in government stand on CEZ deal

3 April 2018 | 17:57 | FOCUS News Agency
Sofia. The leader of Bulgarian Socialist Party (BSP), Kornelia Ninova, demanded an explanation for the reversal in the state’s stand on the local CEZ deal and said that the government was behind some obscure interests in the power distributor. The party continues to insist that the state acquire CEZ Bulgaria, Kornelia Ninova wrote on Facebook, noting that the deal concerns national security and 3 million Bulgarians. Recalling Finance Minister Goranov’s statement in early March that the government was willing to participate in the deal one way or another, she asked what has changed since then. “Today Borissov’s hiding from the [inquiry] committee and the finance minister’s [latest] statement prove our thesis that the government is behind someone’s obscure interests set to acquire one-third of the power supplies,” Ninova wrote. She asked who took the decision that the state would not participate in the deal – the government or the prime minister alone – and what is the opinion of coalition partner United Patriots. She also asked if it was true that in a request to the regulator, CEZ wanted an increase in the electricity price.
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Ginka and Slavcho Varbakovi, and Inercom are not under investigation, says prosecutor-general

Ginka and Slavcho Varbakovi, and Inercom are not under investigation, says prosecutor-general

3 April 2018 | 16:16 | FOCUS News Agency
Sofia. Ginka and Slavcho Varbakovi and their company Inercom are not under investigation, Bulgaria’s Prosecutor-General Sotir Tsatsarov said at a meeting of the Temporary Parliamentary Committee on the CEZ deal, FOCUS News Agency reports.
“The CEZ deal is not the subject of an investigation by the Prosecutor’s Office as it is a matter of private-law relations,” the prosecutor said. “On 28 February, I received a letter from the head of the State Agency for National Security (SANS) requesting information from the Prosecutor's Office regarding Ginka and Slavcho Varbakovi, as well as Inercom, in relation to an inspection ordered by the prime minister. On 1 March, he received a response from us,” said Tsatsarov. “On 1 March, we received a similar inquiry from the secretary-general of the president. The same day a copy of the letter to SANS was sent to him,” he said.
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Minister Vladislav Goranov: The state will not participate in the CEZ deal

Minister Vladislav Goranov: The state will not participate in the CEZ deal

3 April 2018 | 15:47 | FOCUS News Agency
Sofia. The Bulgarian State has no intention to participate, one way or another, in the deal for the acquisition of CEZ’s assets in Bulgaria, Finance Minister Vladislav Goranov said at a meeting of the Temporary Parliamentary Committee on the CEZ case, FOCUS News Agency reports.
“Over the last few weeks Prime Minister Borissov and I have come to an agreement that the state's participation in such a deal is inexpedient. We do not believe that, despite the great interest from the public, the state‘s involvement is the way to protect citizens’ interest. We have enough legislative mechanisms,” Minister Goranov commented.
“Whether the deal will be closed or not is beyond the regulatory functions of the state. We have no intention as the Executive to interfere in private law relations,” the minister said, adding that this could result in claims against the state.

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Zhelyo Boychev, BSP: Inquiry committee on CEZ will check all information

Zhelyo Boychev, BSP: Inquiry committee on CEZ will check all information

30 March 2018 | 11:06 | FOCUS News Agency
Sofia. The Parliament’s inquiry committee on the CEZ deal will examine all the information, its chairman Zhelyo Boychev, MP from the Bulgarian Socialist Party (BSP), told FOCUS Radio. He said that the privatisation of the power distributors in 2004 and subsequent developments in 2012 were within the scope of the committee. The committee is to ascertain who and with what money is buying CEZ and what the future of the power distributor will be. It will also look at the work of state institutions and regulators amid allegations of inaction, the MP said.
He added that Prime Minister Boyko Borissov was invited to the second meeting of the committee to present the arguments for the change in the government’s stand on the issue from non-interference to controlling participation in the deal.
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Minister Temenuzhka Petkova: There is no way for the government to answer questions on CEZ deal financing

Minister Temenuzhka Petkova: There is no way for the government to answer questions on CEZ deal financing

14 March 2018 | 13:16 | FOCUS News Agency
Sofia. The CEZ deal started as a business deal but has escalated as some attempted to turn it into a political issue, Energy Minister Temenuzhka Petkova told Nova TV this morning. Contrary to the president’s statement, there is no way for the government to answer questions about the financing of the deal because it did not participate in the sale procedure, the minister said. “The Czech state is selling some of its assets, located in Bulgaria. It is not for the [Bulgarian] state to give answers about how the financing is structured,” she added. The government is considering options in the current situation. The minister did not elaborate on the highest price the state would be willing to pay if it is allowed to participate in the sale. “We understand people’s fears. We want to create the conditions to minimise them and reassure people that the state will have some controlling participation in this deal,” she said.
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PM Boyko Borissov: Everything about CEZ must be brought to light, it's not about liking or disliking

PM Boyko Borissov: Everything about CEZ must be brought to light, it's not about liking or disliking

14 March 2018 | 12:38 | FOCUS News Agency
Sofia. All facts about CEZ must be brought to light, Prime Minister Boyko Borissov said at the beginning of the Government meeting today, FOCUS News Agency reports.
“We backed the creation of an inquiry committee on CEZ in Parliament, so that all facts about the company through the years become known. We didn’t deliberately put obstacles in their way, but we did want the power distribution companies to fulfil their contracts and commitments, and therefore all three companies were subject to inspections. It is not a matter of liking or disliking, they didn’t invest enough in the power distribution system, which was their obligation, but they didn’t meet it.
“The [inquiry] committee is a good thing, we can finally put an end to this manipulation of the public,” the prime minister said.
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Inquiry committee to check circumstances in CEZ Bulgaria privatisation and planned sale

Inquiry committee to check circumstances in CEZ Bulgaria privatisation and planned sale

14 March 2018 | 12:33 | FOCUS News Agency
Sofia. The MPs decided to set up an inquiry committee with a mandate to check all circumstances related to the privatisation and the planned sale of CEZ’s assets in Bulgaria, FOCUS News Agency reports. The privatisation was included into the scope of the committee as proposed by Citizens for European Development of Bulgaria (CEDB/GERB). The Bulgarian Socialist Party (BSP) had only proposed checking the circumstances related to the planned sale of the local power distributor. BSP MP Zhelyo Boychev will chair the committee. The term is one month.
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President Rumen Radev to call CCNS on energy security in the country

President Rumen Radev to call CCNS on energy security in the country

13 March 2018 | 13:39 | FOCUS News Agency
Plovdiv. President Rumen Radev will call the Consultative Council on National Security to discuss energy security in the country, he told reporters, quoted by FOCUS Radio - Plovdiv. The issue of CEZ remains topical and the government has to answer the question of what is the scheme of financing and how the deal got political support, he said. “We all know that without such support this company [the buyer] cannot receive such great commitment from the banks,” Radev added. According to the president, it is unclear how the government would participate in the deal and who is negotiating on behalf of the Bulgarian state and on behalf of Inercom’s Ginka Varbakova. After receiving information from the services that had been regularly sent to the government, the president believes that there is reason to convene the CCNS.
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Minister Temenuzhka Petkova: Inercom has agreed that the state should participate in the CEZ deal – now it is the seller who will have its say

Minister Temenuzhka Petkova: Inercom has agreed that the state should participate in the CEZ deal – now it is the seller who will have its say

12 March 2018 | 13:14 | FOCUS News Agency
Belene. Inercom has agreed that the state should participate in the CEZ deal – now it is the seller who will have its say, Energy Minister Temenuzhka Petkova told reporters in reference to the deal between the Czech CEZ Group and Bulgarian Inercom, FOCUS News Agency reports.
“In 2003, these power distribution companies were privatised. The government cannot possibly be behind this CEZ deal. We are now waiting for the analyses on the Czech part. Meanwhile, we will also be analysing very carefully to make sure that the interests of the Bulgarian state will be protected,” she said.
“You understand that this (privatisation) happened more than 15 years ago, it was a strategy of the then government adopted by the then parliament. Now somebody wants to hold the GERB party and the current Government accountable for it. In 2003, GERB didn’t even exist,” the minister commented.
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Czech CEZ to explore options for Bulgarian state to take part in the deal

Czech CEZ to explore options for Bulgarian state to take part in the deal

9 March 2018 | 16:07 | FOCUS News Agency
Prague. Negotiations between CEZ and Inercom on fulfilling the conditions of the contract took place from Tuesday 6 March to this Friday 9 March. The main purpose of the meetings was the preparation of documents for the application to the Bulgarian Commission for Protection of Competition. During the negotiations, representatives of Inercom also presented an official enquiry as to whether in the current situation there is a possibility for the Bulgarian state to get involved in the deal.
Even though the Bulgarian government did not express interest in entering the sales process that took place last year, CEZ will consider the request and will explore the option, CEZ Spokesperson Alice Horakova said in a press release published on the company's website.
In view of the limitations posed by the already signed contract between the two parties, CEZ and Inercom decided to prepare a thorough analysis of all variations and possible outcomes of Bulgaria’s state potential involvement in the process. In a few weeks, negotiations will continue.
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