Varna-based company Mega Group said it would invest some 100 million euro over the next couple of years in a plant for the recycling of oil and petroleum products waste in the town of Smyadovo,  in eastern Bulgaria.

Bulgaria's investment agency BAI awarded the project a first-class investor certificate on July 23. The plant is scheduled to begin operation in October this year with an initial annual capacity of 180 000 tons. It would reach up to 1.5 million tons by 2010.

The recycling process will produce gasoline, diesel fuel and fuel oil, among other products. The material for recycling will be shipped by sea from former Soviet republics.

Funding for the project will be raised on the local stock market as well as borrowed from banks. A planned offering of new shares should raise 50 million euro, Mega Group board chairperson Roumen Dimitrov said.

The placement will be made over the next two years on the domestic or international bourses. The company will use 15 million euro of its own funds for the project while contracting Investbank to arrange a 35 million euro syndicated loan.

"We are also looking for a strategic investor to contribute the remaining project funding," Dimitrov said. Mega Group also plans to build a storage facility, a transportation complex and a logistic network. There are plans to one day start generating electricity from a co-generation facility, Dimitrov said., said Dimitrov.