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.
“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.”