The EBRD is providing €342mn towards a €1.1bn project to build the new Maritza East I power plant in Bulgaria. It is the country’s first large-scale greenfield and fully privately-owned power plant.

The bank’s loan, being provided to AES-3C Maritza East 1 EOOD, a wholly-owned subsidiary of AES, one of the world’s largest power producers, will enable the company to build a 2x300MW lignite-fired power plant in Galabovo, 270km outside Sofia, the capital city.

The plant will help secure Bulgaria’s and southeastern Europe’s future energy needs, especially following the decommissioning of the two further units of the Kozluduy nuclear power plant in 2006.

The project marks the country’s largest foreign direct investment. As well as ensuring a reliable power supply to consumers in Bulgaria and the region, the project will have a significant social impact through job creation and a positive economic impact for Bulgaria using an indigenous fuel. The bank will syndicate around €246mn of its loan to international banks, including BNP Paribas, Calyon, ING and the Black Sea Trade and Development Bank.

Anthony Marsh, EBRD director for power and energy, says this project reflects the EBRD’s commitment to Bulgaria, and to helping secure a source of energy for the country and the wider region. This latest loan builds on nearly €230mn the bank has already committed to Bulgaria’s power sector.

The new plant will use state-of-the-art pollution control technology, including flue gas desulphurisation, which will reduce sulphur dioxide levels, the gas responsible for acid rain. The plant will meet European Union and Bulgarian emission standards for particulates, especially sulphur dioxide and nitrogen oxide, a major pollutant.

Established in 1981, and traded on the New York Stock Exchange, AES develops, owns and operates electric generation plants around the world. The company currently operates in 26 countries in five continents, with a capacity to serve the energy needs of more than 100mn people worldwide. AES-3C Maritza East 1 EOOD will sell the electricity it generates to NEK, the national grid in Bulgaria.

“Bulgaria is experiencing good economic growth, political stability and good opportunities in the power sector as it prepares its accession to the European Union,” says AES president and chief executive officer Paul Hanrahan. “Bulgaria needs electricity to fuel its economic expansion, and our new power plant will go a long way toward meeting the country’s electricity needs as well as maintaining its strong position as an exporter to its neighbouring countries.”

The EBRD is the largest single investor in Bulgaria, having committed more than €1.1bn in 58 projects.