A QUESTION mark hangs over the construction of a new facility at Maritsa Iztok 1 thermal power plant by the US company AES, after the recently announced debt troubles of the energy giant worldwide.
However, the company has insisted the project will go ahead.
AES and its worldwide subsidiaries owe more than $23 billion, of which $5.5 billion is owed by the parent company and the rest owed by its subsidiaries, Reuters reported last week.
AES, one of the world's largest electricity providers, relies on dividend payments from its power plants around the world to meet debt obligations. A confluence of problems, including currency devaluations in South America and sharply lower power prices in the US and the United Kingdom, left it without enough cash to meet loan obligations due next year. This also resulted in a sharp drop of the company stock and some dark forecasts of the future of its projects all over the world.
"AES is not pulling out of Europe," Peter Barrett, executive director of the Maritsa Iztok 1 project told The Echo last Wednesday. According to him, the company is ready to move ahead with the project and "supply Bulgaria with the energy it will need both now and in the future".
"Working with our contractor Alstom Power, we have confirmed that we are ready to commence construction next year, generating very large inward investment and creating huge new employment opportunities in the region," Barrett said. He added that all that is now required for the project to move forward is the issuing of a Government support letter, which is required by the project lenders and has been negotiated with the Government.
The value of the project exceeds $850 million and is the largest contracted investment in the Bulgarian energy sector.
Bulgarian-language newspapers speculated that the Maritsa Iztok 1 project might totally fail. According to Dnevnik, the Government has refused to make the necessary steps so far to provide a letter of support.
Over a month ago, after a session of the parliamentary groups of the National Movement Simeon II (NMSII) and the Movement for Rights and Freedoms (MRF), Minister of Energy and Energy Resources Milko Kovachev said that the letter would be amended in the part related to AES and Entergy, the company in charge of the rehabilitation of Maritsa Iztok 3. So far, however, the investors have not received the letter in question. This is the reason why AES has no agreement with the banks and there was a delay in work on the project, Dnevnik wrote. Meanwhile, the chair of the State Commission for Energy Regulation (SCER), Konstantin Shushulov said that the commission might revoke the licenses of both AES and Entergy for construction of new facilities, rehabilitation and power production, if they did not sign financial-assistance agreements with banks by December 31 this year. The licences were issued in the middle of the year on the condition that companies find investment.
However, the company has insisted the project will go ahead.
AES and its worldwide subsidiaries owe more than $23 billion, of which $5.5 billion is owed by the parent company and the rest owed by its subsidiaries, Reuters reported last week.
AES, one of the world's largest electricity providers, relies on dividend payments from its power plants around the world to meet debt obligations. A confluence of problems, including currency devaluations in South America and sharply lower power prices in the US and the United Kingdom, left it without enough cash to meet loan obligations due next year. This also resulted in a sharp drop of the company stock and some dark forecasts of the future of its projects all over the world.
"AES is not pulling out of Europe," Peter Barrett, executive director of the Maritsa Iztok 1 project told The Echo last Wednesday. According to him, the company is ready to move ahead with the project and "supply Bulgaria with the energy it will need both now and in the future".
"Working with our contractor Alstom Power, we have confirmed that we are ready to commence construction next year, generating very large inward investment and creating huge new employment opportunities in the region," Barrett said. He added that all that is now required for the project to move forward is the issuing of a Government support letter, which is required by the project lenders and has been negotiated with the Government.
The value of the project exceeds $850 million and is the largest contracted investment in the Bulgarian energy sector.
Bulgarian-language newspapers speculated that the Maritsa Iztok 1 project might totally fail. According to Dnevnik, the Government has refused to make the necessary steps so far to provide a letter of support.
Over a month ago, after a session of the parliamentary groups of the National Movement Simeon II (NMSII) and the Movement for Rights and Freedoms (MRF), Minister of Energy and Energy Resources Milko Kovachev said that the letter would be amended in the part related to AES and Entergy, the company in charge of the rehabilitation of Maritsa Iztok 3. So far, however, the investors have not received the letter in question. This is the reason why AES has no agreement with the banks and there was a delay in work on the project, Dnevnik wrote. Meanwhile, the chair of the State Commission for Energy Regulation (SCER), Konstantin Shushulov said that the commission might revoke the licenses of both AES and Entergy for construction of new facilities, rehabilitation and power production, if they did not sign financial-assistance agreements with banks by December 31 this year. The licences were issued in the middle of the year on the condition that companies find investment.
