Bulgaria’s Gorna Arda hydro power project moved one step closer to reality on September 2 2009, when the Government issued a letter of support selecting local company HEC Gorna Arda as investor, Energy and Economy Minister Traicho Traikov said.

The letter was needed to wrap up the sale of the holdings of Turkish group CCG, which succeeded the original Turkish participant in the project – Ceylan, to a consortium of Austrian companies EVN Bulgaria and Alpine Bau.

The transaction will leave the tie-in with 30 per cent in HEC Gorna Arda, with the remainder in the hands of national power grid operator NEK.

The document does not represent a state guarantee and does not burden the budget, Traikov said.

CCG has filed a 75 million euro court action against NEK with the intentional court of arbitration in Paris for failure to honour its commitments under an intergovernmental agreement signed in 1998 to swap power exports for admission of Turkish companies into Bulgarian infrastructure projects.

The case was suspended on September 14 to sort out conditions on the transaction.

Bulgaria’s former government demanded that Ceylan pull out of the deal if it is to go ahead.

The Gorna Arda cascade comprises three dams with hydro power stations Madan, Ardino and Sarnitsa with a nameplate capacity of 174.2 MW.

The project was originally valued at 310 million euro, but the latest estimates hover around 500 million euro.

Construction is expected to span five or six years. NEK will make an in-kind contribution of equipment into the project, having so far committed eight million euro.

Source: Dnevnik.bg