US corporation AES has asked Bulgaria's National Electricity Company (NEK) to approve a one-year extension to the project for a new 710MW coal-fired capacity on the site of the Maritsa Iztok 1 thermal power plant, Bulgaria's Economy and Energy Ministry.

Talks are in progress to establish the objective reasons for the delay and whether they have to do with the organisation of work or with the contractor Alstom, NEK chief executive director Lyubomir Velkov said.

NEK, the state-run power grid operator, so far seems inclined to make the necessary adjustments to the contract. The 1.4 billion euro project, started three years ago, is now seven months behind schedule. The first of the two 355MW units was due to start operations by June 2009.

Under the existing contract, any penalties could be imposed after the project is completed. Several sources said the delay has caused unease among the banks that have lent AES money for the project. The consortium bankrolling the venture comprises EBRD, BNP Paribas, Calyon and ING.

AES declined to comment on the talks with NEK.