German power utility RWE has proposed building a 600-megawatt coal-fired power plant in Bulgaria for up to 800 million euro.

"We have introduced our offer to build a new power plant as well as to invest in Maritsa Iztok mines," RWE Power AG executive board member Matthias Hartung told reporters on August 18 in Radnevo, Southern Bulgaria, where the coal mining and electricity generating complex Maritsa Iztok is located.

Maritsa Iztok generates about 30 per cent of Bulgaria's electricity output.

"This is a very detailed offer, which will bring a long-term certainty for coal and electricity production in the region," Hartung said.

Bulgaria hopes to remain a leading power exporter in Southeast Europe through building new generating plants. The country has pledged to decommission units three and four of its sole nuclear power plant Kozloduy by the end of 2006 to address safety concerns voiced by the European Union. Kozloduy produces about 40 per cent of the country's electricity output.

US power group AES in June launched the construction of a two-billion-leva (1.025 billion euro) 670-megawatt coal-fired power plant at the Maritsa Iztok complex.

Meanwhile, Italy's largest utility, Enel, confirmed on August 18 it was planning a 600- megawatt power plant at Maritsa Iztok for one billion euro.

"We had a plan and we have proposed it to the government," an Enel senior official, who declined to be named, told reporters.

"We may build the three of them," Economy and Energy Minister Roumen Ovcharov told a news conference. He said that if the three power stations were built, Bulgarian power plants' capacity would reach 2000 megawatts.

Ovcharov said that both environmental and economic estimates were needed to determine the technological capacity of the Maritsa Iztok complex, prior to granting RWE a permit for the project. He said that the evaluation of the technological capacity of the complex and the options for adding power capacity would be financed by both the state and investors.

Hartung said that RWE did not have final plans for the location of the power plant and that further talks would be held when the Bulgarian government examined the offer. He said that the construction of a power plant with capacity of 600 megawatts would cost 700 to 800 million euro in the current market situation.

"We showed our readiness and all that we offer to the Bulgarian government we should develop together. So, RWE can not give a time frame," he said.

It is planned that the electricity produced at the plant will be sold mainly on the Bulgarian market.

"On the grounds of our experience in the market liberalisation in East Germany and privatisation in Hungary, we know what are the exact requirements and what will be next in the market development and we are sure that the energy complex in the region has a long-term outlook," Hartung said.

In June, Enel acquired full control of Dutch-registered Maritsa Iztok 3 Power Holding, which owns 73 per cent in coal-fired Maritsa Iztok 3, Bulgaria's third-largest power plant. The Italian utility also acquired 100 per cent in the Entergy Power Netherlands firm, which holds a 73 per cent stake in Maritsa Iztok 3 Operating Company that operates and maintains the lignite-fired 840-megawatt plant.

Bulgarian state-owned National Electric Company, which controls the country's power grid, owns the remaining 27 per cent in both Maritsa Iztok 3 Power Holding and Entergy Power Netherlands.

"I think it is important for the region that RWE, which has a long-standing experience in electricity production from brown coal, has serious plans to invest in the region and to give its know-how," Hartung said.

For the first half of 2006, 34.1 million leva have been invested in the mine, and investments will reach 64 million leva for the whole year, Maritsa Iztok CEO Ivan Markov told a news conference. He added that the investment plan up to 2020 specified investments of 150 million leva in the new equipment and optimisation of the production process for the next three years.

Markov said that the mine would produce less than its output capacity while the Maritsa Iztok 2 thermal power plant is in rehabilitation, but within three years sales would rise by 50 to 60 per cent.

"Our main effort is to prepare technically for this challenge," Markov said.

Maritsa Iztok Mines had output of 11.6 million tons of coal for the first half of 2006, up by 639 000 tons on the year, according to Markov.