CEZ mulls selling Bulgarian assets to India Power Corporation

CEZ mulls selling Bulgarian assets to India Power Corporation
By Iulian Ernst in Bucharest July 24, 2018

CEZ will have to seek a new buyer after its original deal to sell assets that include one-third of Bulgaria’s electricity distribution to a small local firm was blocked by regulators. 

Іf CEZ decides to resume negotiations on the sale of its Bulgarian assets the prospective buyer would be India Power Corporation — the next in line after Inercom according to the outcome of the auction, CEZ’s spokesperson in Prague Alice Horakova told Bulgarian daily 24 Chasa.

The original deal with local family-owned firm Inercom, which includes the distribution of one-third of the electricity in the country, sparked a scandal when it emerged the buyer was owned by a close friend of Bulgaria’s energy minister, and was recently blocked by regulators

Czech utilities company CEZ, which had reportedly been looking to sell its assets in Bulgaria for some time, may now turn to India Power Corporation. The Indian company is part of Kanoria Foundation Trust, which unifies the businesses of the Kanoria family. Unlike Inercom it is a large concern; its value is estimated at $10bn. India Power produces wind, solar and thermal energy, and also deals with electricity distribution.

In Bulgaria, CEZ operates an electricity distribution business with 2mn customers, a retail electricity supplier, and a wholesale trader. The Varna coal-fired power plant also owned by the firm has an installed capacity of 1,265 MW. In addition, it owns two renewable plants.

CEZ shortlisted five companies in the sale procedure for its assets in Bulgaria, Reuters reported, quoting Tomas Pleskac, a member of the board.

CEZ announced in February that it had selected Inercom as the buyer of its Bulgarian assets, but the CPC blocked the deal on July 19, claiming it would result in excessive concentration on the solar power market.

Inercom group includes a company that generates electricity using photovoltaic farms while CEZ holds similar capacities and in addition it trades electricity, thus potentially giving a preferential position to its own solar farms to further deliver to end-customers by its own distribution networks.

Negotiations with another bidder will start only after the 14-day period during which CEZ and Inercom have the right to appeal the ban on their deal imposed by the Bulgarian competition authority CPC, Horakova said. CEZ confirmed that it received the competition authority’s decision on July 23.