ČEZ cleared to sell Varna power plant in Bulgaria

The Bulgarian antitrust authority has allowed local transport company SIGDA to buy the Bulgarian black coal power plant in Varna from the Czech power company ČEZ.

Photo: Filip JandourekPhoto: Filip Jandourek Reuters reported the story on Thursday. The Czech energy giant agreed to sell the power plant to Bulgarian company SIGDA at the end of October. The financial terms of the transaction have not yet been published.

The 1260 megawatt capacity power plant in Varna was mothballed since the beginning of 2015. ČEZ bought it in 2006 for 206 million euros (5.3 billion crowns). SIGDA, headed by former Bulgarian transport minister Danail Papazov and his son, intends to rebuild part of the power plant. Its previous operation was also undermined by higher coal prices and the fact that power from the plant was mostly used for so-called support services, covering the energy needs of the country’s power network.

ČEZ stopped operation of the plant because Bulgaria had not obtained a permit from the European Union to operate the plant given that it lacked up-to-date pollution controls and the equipment did not meet European ecological limits. ČEZ said that it had not agreed with the Bulgarian state energy company Bulgarian Energy Holding to finance the modernization of the power plant.

The Czech energy company wanted to pull out of the Bulgarian market due to long-standing disputes with local authorities and regulators and also to focus on the Czech Republic and Central Europe for its main development of power production and energy services and renewable energy sources in developed countries such as Germany and France.