Bulgaria’s president to summon national security council over sale of CEZ assets

Bulgaria’s president to summon national security council over sale of CEZ assets
By Denitsa Koseva in Sofia March 14, 2018

Bulgaria’s President Rumen Radev said he will summon the national security council in mid-April over the highly controversial deal to sell Czech energy company CEZ's assets in Bulgaria.

In February CEZ announced that it had selected the unknown small family-owned Bulgarian firm Inercom Group as the buyer of the assets, raising serious concerns about the buyer’s ability to fund and run such strategic energy assets. Inercom was also found to be owned by a close friend of Bulgaria's energy minister. 

The deal turned into one of the main political scandals in the country and has further destabilised the already unstable ruling coalition. All the main political parties are using it as a tool to gain popularity and reduce support for Boyko Borissov’s third government. Borissov himself is trying to calm down the situation and show that the government can and will control of the situation and will not allow the sale to harm the interests of end-users.

According to Radev, the deal is a solid reason for calling the national security council and debating the country’s energy security, news agency BTA reported.

“Until this question on the financing scheme is cleared, we cannot be aware of how and under what form Bulgarian government plans to become partner of [Inercom owner] Mrs Ginka Varbakova. Who is leading the negotiations on behalf of Bulgarian state, and much more interesting – who is leading negotiations on behalf of Mrs Varbakova?” BTA quoted Radev as saying.

The deal has rebounded on the government due to the links revealed between Inercom’s owner Ginka Varbakova and Energy Minister Temenuzhka Petkova, who has since resigned. The two have been close friends for 20 years. Although Borissov advised Petkova to step down, her resignation was not accepted last week.

Borissov, who initially said the deal was merely a transaction between two companies, has been forced to involve himself, and has ordered all the relevant Bulgarian authorities to investigate. Later he said the government wants to take over CEZ’s Bulgarian business, though it is not clear whether this will be possible.

Petr Baran, former operations director of CEZ, has said that the company decided to exit Bulgaria due to the bad business environment and the conflicts with Bulgaria’s government. Baran claimed that no serious company showed an interest in the deal and that CEZ finally decided to sell its assets to an unknown company. He has also said that CEZ had unsuccessfully invited the government to buy its stake several times.