THE Privatisation Agency (PA) has opened the procedure for the sale of 67 per cent of the shares in the electricity distribution companies (EDCs), executive director Iliya Vassilev announced.

The seven EDCs will be divided into three pools and three separate tenders will be held concurrently. Only strategic investors will be allowed to bid, Deputy Prime Minister and Economy Minister Lydia Shuleva said. The future buyer must bid for at least 51 per cent in a package. Banks and other financial institutions will be allowed to form conditional consortiums with the candidates to provide the loans for the acquisition of the package by acquiring the remaining 16 per cent.

Special companies registered specifically to take part in the bidding will not be eligible to bid. Offshore companies will be ruled out as well. Tender documentation is being sold for 3000 leva. The deadline for the preliminary certification of candidates is December 15. Information memorandums will be sold by December 23. Indicative bids must be submitted by January 30, 2004.

After the announcement of the criteria for the sale it became clear that Russian company RAO United Energy Systems will not be eligible to bid for the Bulgarian EDCs. The company is owed by former Russian deputy prime minister Anatoliy Chbays and has repeatedly stated its interest in the deal. One of the terms for the future bidders is that they must have experience at least one national market with at least 26.5 per cent liberalisation by April 2003. The candidates must have at least a five per cent share in such a market measured by the volume of sold electricity against the total of consumption. The terms are not met by France's Electricite de France either, because of the delay in the liberalisation of the French market. Italy's Enel and Germany's RWE and Eon, however, are eligible. According to the consultants from BNP Paribas, a total of 43 companies meet the demands set by the Bulgarian Government.

A week ago, Pari daily reported that the World Bank was against the privatisation of the EDCs because there was a decline in the industry and private investors were not able to cope with it. But later the same daily contradicted its report after interviewing Oscar De Bruyn, WB country manager for Bulgaria, who said: "In response to some reports on the World Bank position related to the privatisation of the EDCs, the Bank would like to clarify that it supports the EDCs privatisation in Bulgaria, which is expected to result in promoting security of electricity supply and better quality of electricity services for Bulgarian citizens and businesses alike. More specifically, the World Bank is supporting the privatisation of the EDC in Bulgaria through its Programme Adjustment Loan (PAL) program. We will continue to monitor the privatisation process over the course of the next months and keep in close contact and dialogue with the Government to promote a transparent process and high-quality outcomes of it."