RUSSIA'S electric company OES (United Energy Systems) is interested in participating in the privatisation of Bulgaria's electricity distribution companies (EDCs), Russia's ambassador to Bulgaria, Vladimir Titov, said.

When the terms of the privatisation are announced OES will take concrete measures, he said.

The interest has been prompted by Bulgaria's likely accession to the EU in 2007 and the liberalisation of the market in the same year.

The Russian daily Vedomosti quoted an informed source as saying that OES planned to persuade the Bulgarian Government to alter the set of eligibility terms by removing the requirement for experience in a liberalised market.

Among the potential candidates for the Bulgarian EDCs are the Italian Enel and E.ON. Last month interest was indicated by the Czech CEZ.

The expansion of the OES abroad started with acquiring the Georgian assets of AES Corporation and the management of most of Armenia's power production facilities. The CEO of OES, former Russian deputy prime minister Anatoli Chubais, said in September that his company was preparing to take over power production capacity in Belarus, Ukraine, Moldova, Tadzhikistan and Kyrgizstan., and in the long term in Bulgaria, Slovakia, Lithuania and Latvia. In May the holding's board of directors approved one of the most challenging projects in Russia- the five-year plan for the Russian electricity market liberalisation. OES, in which the state holds 52 per cent, will thus lose its monopoly status.

The amendments to the rules of the tenders for the EDCs are expected to be published at the beginning of October. The privatisation procedure will start shortly after that. The first criterion is that the eligible bidders should have at least 7000 GWh electricity sold in 2002 and at least 700 million euro own capital. The second requirement, that they have one billion euro own capital, has been amended. Further, they should hold at least five per cent share in an electricity market.

A total of 47 corporations meet these criteria, said Energy Minister Milko Kovachev. The major selection criteria will be the financial quote. Government will sell a 67 per cent stake in each EDC and the state will keep the remaining 33 per cent. The EDCs will be sold in three packages by means of three concurrent public competitions. Candidates will be allowed to buy one group of EDCs.

Each group of EDCs holds an almost equal share of the market, consisting of 1.2 to 1.8 million consumers with the annual electricity sales of five to eight billion kWh. The first group includes Sofia city, the Sofia district and the Pleven region. The second group includes the Plovdiv and Stara Zagora regions, and the third one consists of the Varna and Gorna Oryakhovitsa regions.