Bulgarian police raid coal-fired power plants in EPPO fraud probe

Bulgarian police raid coal-fired power plants in EPPO fraud probe
/ bne IntelliNews
By Denitsa Koseva in Sofia February 27, 2023

Bulgarian organised crime unit GDBOP and the national security agency, DANS, have raided the offices of coal-fired thermal power plants directly owned by or connected to controversial local businessman Hristo Kovachki.

The operation is under the supervision of the European Public Prosecutor’s Office (EPPO), caretaker Interior Minister Ivan Demerdzhiev said as quoted by state news-agency BTA. He declined to provide details, while the EPPO issued a statement confirming the raids.

“The European Public Prosecutor’s Office (EPPO) in Sofia (Bulgaria) is today carrying out dozens of searches and investigative measures, in a probe into possible fraud regarding the EU Emissions Trading System (EU ETS), with losses of millions of euro to the EU and national budgets,” the EPPO said in a statement late on February 27.

It added that a private company responsible for verifying the greenhouse gas emissions of thermal power plants and heating plants in Bulgaria was probed for allegedly submitting falsified reports to the competent national authorities.

According to the investigation, since 2017 the unnamed company has intentionally been submitting false data and documentation for the annual reports on greenhouse gas emissions produced by thermal power plants and heating plants in Bulgaria, in order to under-declare their emissions output under the EU ETS.

“Based on the evidence, it is estimated that the under-declared emissions submitted to the national authorities resulted in losses to the EU and national budgets of millions of euro, in unpaid amounts for actually-consumed greenhouse gas emissions. Additionally, the under-reported emissions also had an impact on the air quality in Bulgaria,” the EPPO noted.

It added that more than 150 police officers participated in the raids that were carried out in eleven Bulgarian cities, with the cooperation of GDBOP and DANS.

“More than 40 searches have already taken place and more than 70 witnesses have been interviewed. The investigative officers have seized mobile phones, laptops and voluminous documentation related to the investigation. The investigative activities are still ongoing,” EPPO said.

It gave no further details, but according to Radio Free Europe, there was a confirmation by the plant in Gabrovo and the Maritsa 3 TPP.

The operation included raids of offices in ten municipalities where are located the Bobov Dol TPP, Brikel TPP, Maritsa 3 TPP and the thermal power plants in Pernik, Gabrovo, Sliven, Veliko Tarnovo, Ruse and Burgas, BNR reported.

Kovachki’s power plants, some of them not owned directly by the businessman, have attracted public attention several times in the past and in 2019 prosecutors raided their offices due to suspicions of illegal burning of waste that is threatening the environment in the country.

In 2021, OCCR reported that two coal-fired power plants associated with Kovachki have reported suspiciously low emission figures for the past three years and might have saved around €30mn from this.

According to OCCR, the two coal-fired plants – Bobov Dol and Brikel – may have under-declared emissions data since 2018 and their reports were verified as accurate by a company set up by a 27-year-old with no apparent background in the emissions verification industry.

Between 2018 and 2020, Bobov Dol burned a mixture of sub-bituminous coal, which should have an emissions factor of 96.1, and lignite, which should have a factor of 104.2, according to EEA rules. But the data showed that the plant reported a factor below 80 for all three years. In Brikel, which was burning lignite, the emissions factor was given as 90.5 for 2018, 79.5 in 2019 and 76.2 in 2020.

Bulgaria seeks data on Magnitsky-sanctioned politicians

Meanwhile, Bulgaria’s Supreme Cassation Prosecution said on February 27 it has sent a letter to the US Justice Department to request information related to the latest US sanctions on local politicians under the Global Magnitsky Human Rights Accountability Act.

Earlier in February, the US announced it had sanctioned former energy minister Rumen Ovcharov, who is a member of the pro-Russian Bulgarian Socialist Party (BSP), former finance minister Vladislav Goranov, a member of Gerb, the former MP and current leader of the Russophiles National Movement, Nikolay Mladenov, as well as two former CEOs of Kozloduy nuclear power plant (NPP) Aleksandar Nikolov and Ivan Genov.

The prosecution in Sofia requested information from the US when imposing sanctions under the Magnitsky act also back in 2021 but has not raised any charges.

Now the prosecution said it is seeking additional data on probes already launched into Goranov, Ovcharov, Nikolov, Genov and Malinov.