Bulgaria to use budget funds to pay Russia compensation for Belene

22 September 2016

Bulgaria’s government on 20 September approved a draft law providing funds from the state budget to pay the contribution of the National Electricity Company (NEC) in line with the ruling of the International Court of Arbitration on compensating Russia for losses resulting from cancellation of the Belene NPP project. Introducing the draft law, energy minister Temenuzhka Petkova said the amount which NEC is obliged to pay is €628,957,596 ($700m) now, but by the end of the year it will increase to €646,230,132 because of added interest. NEC has to pay BGN323,000 ($184,242) a day for delays in payments. Petkova added that delays would also raise the possibility of Russian company Atomstroyexport (Belene general contractor) declaring NEC bankrupt. She noted that Atomstroyexport is insisting on at least partial payment of the debt.

Bulgarian prime minister Boiko Borisov said the previous day that BGN800m would be made available to partially pay the debt. On 17 September, after a meeting of the co-chairmen of the Russian-Bulgarian Intergovernmental Commission for economic, scientific and technical cooperation, Russia’s first deputy minister of justice, Sergey Gerasimov, said payments would be made in instalments and the first instalment of €400m wouldl be paid before the end of the year. This was confirmed by Petkova, who also noted that EU approval would be needed as the payment qualifies as state aid. She said the arbitration court had not yet commented on Bulgaria’s claims that the interest rate set by its ruling may have been miscalculated. 

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