INTERVIEW - BSTDB to focus funding in Bulgaria on energy sector, infrastructure

SOFIA (Bulgaria), June 30 (SeeNews) – The lending portfolio of the Black Sea Trade and Development Bank (BSTDB) in Bulgaria will focus on infrastructure and the energy sector, with projects for power equipment production and renewable power generation in the pipeline, the bank’s president said.

"We closely monitor events related to the modernization of energy plans now discussed by the Bulgarian government,” Andrey Kondakov told SeeNews in a recent interview on the sidelines of the bank's annual conference in Sofia. Once there is more clarity regarding the course of development that the country's energy sector will take, the bank will act correspondingly, he added.

In 2010 the BSTDB lent 11 million euro ($15 million) for the construction of a 60-megawatt wind farm in Suvorovo, in the northeast of Bulgaria.

The bank has also financed a project for the construction a coal-fired power plant, Maritsa East 1, and the rehabilitation of another one, Maritsa East 3, in the southeast of the country.

“We want to expand this type of facilities for Bulgaria,” the BSTDB president noted.

BSTDB is also interested in financing the South Stream project and the Interconnector Greece-Bulgaria gas transmission project.

“We understand the difficulties and challenges [facing the South Stream project] and after all parties decide how to proceed and if South Stream will be implemented, we would love and we would really compete to participate in financing this project,” Kondakov said. “But first, all issues have to be resolved [...].”

The planned South Stream gas pipeline, spearheaded by Gazprom, will carry gas from Russia to central and southern Europe via Bulgaria, Serbia, Hungary and Slovenia, reaching its full capacity of some 63 billion cubic metres (bcm) per year by 2017. The project's future, however, is uncertain as the European Commission has said it runs counter to EU law.

The IGB project, estimated to cost 220 million euro, will start at the northeastern Greek city of Komotini and end at Stara Zagora in Bulgaria. The pipeline will be 182 kilometre long and will carry 3.0 bcm of natural gas annually in its initial stage of launching in 2017, to reach a maximum capacity of 5.0 bcm per year.

The bank also plans to co-finance plans by a Turkish wood processing company to expand its operations in Bulgaria and Romania with a loan of up to 25 million euro, Kondakov said, without disclosing the name of the investor.

“These two countries [Bulgaria and Romania] we feel are lagging behind a little. We should do a bit more and we would gladly support this operation,” Kondakov said.

If all projects in the development pipeline in Bulgaria for the next year and a half are implemented, the financing that the BSTDB would provide to the country will reach 80 million euro.

BSTDB, headquartered in Greece, was established by Albania, Armenia, Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Romania, Russia, Turkey, and Ukraine.

The bank’s total disbursements in 2013 to all 11 countries it operates in amounted to 197.3 million euro. The bank plans a net increase in its outstanding portfolio this year by another 150 million euro.

BSTDB’s outstanding disbursements in Bulgaria in 2013 amounted to 14.5 million euro, or 7.6% of its total outstanding operations last year.

The BSTDB is in the process of doubling its capital to 2.3 million euro, as the capital payments are expected to be completed in 2018.

The bank’s operations are based on mid-term strategies which cover a period of four years. The current mid-term strategy was approved in 2010 and covers 2011-2014.

“[…] the new four-year strategy [starting] 2015 will have more substantive numbers in terms of our commitments,” Kondakov said. The bank is due to approve the next strategy plan for Bulgaria in December.

($=0.7337 euro)

Choose your newsletter by Renewables Now. Join for free!