AES is not prepared to divulge how much of the Greenfield investment in Maritsa Iztok 1 thermal power plant (TPP) will be allocated for social programmes, Peter Litgow, CEO of US firm AES, told the Bulgarian-language daily Pari.

"Institutions and individuals wanting to participate as subcontractors in the project had three months to submit their projects in the field of social policy," he said.

The project will build a 670 MW capacity at the Maritsa Iztok 1 TPP near Stara Zagora in the small town of Galabovo.

At a cost of 1.2 billion euro, it is the biggest US investment not only in Bulgaria but in Central and Eastern Europe.

With such large amounts of money in the project, AES is in search of subcontractors. The major contractor of AES is France's Alstom. The company will design, construct and commission the power station through several subsidiaries.

Bulgarian companies are welcome to take part in the construction. On November 14, Alstom, together with its key subcontractor, the Turkish Tefken Gama, invited more than 40 Bulgarian construction companies to present proposals before AES.

A total of 100 construction specialists have already been employed. The recruitment of a further 2000 is expected. A new settlement to house 800 of them is being built near Galabovo.

Bulgarian companies are supposed to win orders worth 200 million leva. The power plant is expected to employ 250 people after completion.

The project suffered a one-year delay. In June, the official go ahead was given. Minister of Economy and Energy Roumen Ovcharov, US ambassador John Beyrle and a group of AES managers turned the first sod of the AES Maritsa Iztok 1 construction site. The TPP will use nine million tons of coals annually, which will be supplied by Maritsa Iztok Mines.

Once the construction is finished after three and a half years, the new plant is supposed to guarantee Bulgaria a leading role in the electricity market in the region. "The new TPP will be in compliance with the Bulgarian and European environmental requirements and the harmful emissions will meet EU standards," Paul Hanrahan, president and CEO of AES, told journalists at the official ceremony.

AES Maritsa Iztok 1 TPP will guarantee some of the lowest production costs for electricity in Europe, Hanrahan said. He refused to comment on theprecise size of the agreed purchase prices of the electricity to be generated by the TPP.

The importance of the project is increasing in light of the forthcoming closure of units 3 and 4 of Kolzoduy nuclear power plant. The plant is Bulgaria's only nuclear power plant. The country is scheduled to shut down the plant in early 2007.

The closure threatens to cause an electricity shortage in Bulgaria, according to a report published on November 2 by the Ministry of Economy and Energy. "Bulgaria will face a power shortage of 700 MW to 800 MW in case of a spell of cold weather in the next two months," the report said. "This is due to coal supply problems in thermal power plants in Rousse and Varna and due to ongoing repairs in the power plants in the Maritsa East coal basin."