Bulgaria’s Commission for the Protection of Competition (CPC) gave the green light on July 28 to Czech energy group CEZ to acquire control of a key Bulgarian coal-fired power plant in the Black Sea city of Varna.

CEZ signed in May a deal with the Bulgarian Cabinet to buy 100 per cent of the 1260MW Varna thermal power plant (TPP) for 306 million euro in cash and a capital hike, and pledged an additional 40 million euro in investments.

The CPC, which had the final say on the deal as the country’s anti-trust watchdog, said that the expected positive effects of the contract, including modernisation of the Varna TPP and investment in Bulgaria’s energy sector, would be in favour of domestic consumers.

The privatisation contract also contains a restricting clause, which would prevent CEZ from pressing competition, CPC said.

Under the deal, CEZ will be able to operate in the energy market with only three of the six units of the Varna plant, because the utility has to agree a five-year deal with Bulgaria’s power grid operator, the National Electric Company, to regulate the so-called cold reserve.

The cold reserve is a power reserve bought out by the transmission system operator in the form of availability of generating units to be used in an emergency.
CEZ should pay the price and carry out the capital hike by end-August.