Bulgarian energy minister resigns over links to buyer of CEZ assets

Bulgarian energy minister resigns over links to buyer of CEZ assets
By bne IntelliNews February 23, 2018

Bulgaria’s Energy Minister Temenuzhka Petkova resigned on February 23 as a small local family firm, the owner of which is her close friend, was chosen by Czech energy firm CEZ as the buyer of its assets in Bulgaria. 

A day earlier, CEZ announced that its supervisory board had approved the sale of its Bulgarian assets to local family-owned Inercom Bulgaria for an undisclosed sum.

Inercom’s owner Ginka Varbakova has been a friend of Petkova for 20 years, the minister told reporters in Sofia, explaining why she has decided to resign. Prime Minister Boyko Borissov was quoted by daily Dnevnik as saying that he will accept the resignation once he returns from Brussels.

“I talked to Prime Minister Boyko Borissov and will file my resignation, and he will decide what to do,” bTV quoted Petkova as saying.

She added that this would be the only honourable thing to do due to allegations that her friendship with Inercom’s owner might have affected CEZ’s decision.

The deal raised concerns among experts and politicians as Inercom seems to be a relatively small firm, operating only three solar stations in Bulgaria.

According to information obtained by Capital weekly, Inercom offered €320mn for CEZ’s Bulgarian business, while the total turnover of its three solar stations is around €25mn annually.

On February 23, Delyan Dobrev, an MP from Bulgaria's ruling GERB party, said he was surprised that a firm with assets worth around €45,000 was selected by CEZ and that the National Security Service probably should investigate the deal.

At the same time, Bulgaria’s Finance Minister Vladislav Goranov defended Petkova, saying that her resignation is unnecessary.

“I don’t find arguments for the resignation. I don’t see anything reprehensive in this deal, but it is her decision,” daily Dnevnik quoted Goranov as saying.

The leader of the opposition Bulgarian Socialist Party (BSP) Kornelia Ninova said that Borissov should carry personal responsibility for the deal. She claimed that the firm buying CEZ’s assets is "suspicious" and said it had been registered only a few months ago.

Deputy Prime Minister Valeri Simeonov also said he was surprised by the deal as the buyer is a small firm that he has not heard of before, and suggested that the deal should be investigated.

CEZ decided to sell its seven companies in Bulgaria, including CEZ Bulgaria, CEZ Elektro Bulgaria, CEZ Razpredelenie, CEZ Trade Bulgaria, CEZ ICT Bulgaria, Free Energy Project Oreshetz and Bara Group. In December 2017, CEZ sold the Varna coal-fired plant near the Black Sea shore to SIGDA of Bulgaria.

The company has been considering exiting Bulgaria for some time as it has endured long-lasting disputes with the authorities. The company has decided to focus on the Czech and Central European markets.