THE German company Rheinbraun, co-owner of a joint venture with Maritsa Iztok Mines, may not get a concession for extraction of coal but will participate in the future privatisation of mines, Deputy Minister of Energy and Energy Resources Ilko Yotsev said on Monday.
The current Privatisation Act says that no concession may be extended without specifically applying for a related tender. Rheinbraun's failure to do so prompted representatives from the company to question the feasibility of the company's previously pledged investment of more than $1 billion.
In 2000, when the joint venture was launched, the German energy giant vowed to make these investments over a 20-year term.
The concession may yet be extended, Yotsev said, because the Privatisation Agency (PA) is still to announce the model for denationalisation of the mines, which could allow the German company to become an investor.
Lawyers told Dnevnik newspaper that according to the State Property Law, it would hardly present a problem for the joint venture Maritsa Iztok mining company to get a concession.
They said the law stated that should the state ownership amount to 300 000 leva, the venture could get a concession without a tender.
The president of the joint venture, Eberhard Buling was unavailable for comment.
"The circumstance does not deal with the rescue of the holding, but rather about investments in the sector," Yotsev said.
The choice of an investor is important, because the Maritsa Iztok coal extraction mines are supplying the thermal energy plants with coal for Martisa Iztok's three major thermal heating plants.
According to Shterio Shterev, CEO of Maritsa Iztok Mines, extraction of coal from the mines reached 22.5 million tons, 19.5 million of which were used for electricity production and 2.5 million tons for briquette production.
He argued that the current volumes represented only 65 per cent of the holding's capacity.
For this reason, the Energy and Energy Resources Ministry indicated that in the next few years, the venture would need funding of between 300 million and 700 million leva, that it expected from the US company Entergy and AES and Polish investors.
Shterev said the mining company might continue to develop without a partner by guaranteeing its own funding for extraction of between 33 and 36 million tons. He said that Eximbank from the US and Japan were ready to extend loans to the holding.
A month ago, representatives from the German company visited the mines to make a survey of the energy market in the country.
The National Electricity Distribution Company and RWE Rheinbraun planned to make lignite coal extraction the major pillar of Bulgarian electricity production by 2015, following the expected closure of units of Kozlodui nuclear power plant. Expectations are that the coal extraction by 2004 will give 2420MW compared to the current figures of 2390MW. In 2008, output is expected to reach 2890MW.
The current Privatisation Act says that no concession may be extended without specifically applying for a related tender. Rheinbraun's failure to do so prompted representatives from the company to question the feasibility of the company's previously pledged investment of more than $1 billion.
In 2000, when the joint venture was launched, the German energy giant vowed to make these investments over a 20-year term.
The concession may yet be extended, Yotsev said, because the Privatisation Agency (PA) is still to announce the model for denationalisation of the mines, which could allow the German company to become an investor.
Lawyers told Dnevnik newspaper that according to the State Property Law, it would hardly present a problem for the joint venture Maritsa Iztok mining company to get a concession.
They said the law stated that should the state ownership amount to 300 000 leva, the venture could get a concession without a tender.
The president of the joint venture, Eberhard Buling was unavailable for comment.
"The circumstance does not deal with the rescue of the holding, but rather about investments in the sector," Yotsev said.
The choice of an investor is important, because the Maritsa Iztok coal extraction mines are supplying the thermal energy plants with coal for Martisa Iztok's three major thermal heating plants.
According to Shterio Shterev, CEO of Maritsa Iztok Mines, extraction of coal from the mines reached 22.5 million tons, 19.5 million of which were used for electricity production and 2.5 million tons for briquette production.
He argued that the current volumes represented only 65 per cent of the holding's capacity.
For this reason, the Energy and Energy Resources Ministry indicated that in the next few years, the venture would need funding of between 300 million and 700 million leva, that it expected from the US company Entergy and AES and Polish investors.
Shterev said the mining company might continue to develop without a partner by guaranteeing its own funding for extraction of between 33 and 36 million tons. He said that Eximbank from the US and Japan were ready to extend loans to the holding.
A month ago, representatives from the German company visited the mines to make a survey of the energy market in the country.
The National Electricity Distribution Company and RWE Rheinbraun planned to make lignite coal extraction the major pillar of Bulgarian electricity production by 2015, following the expected closure of units of Kozlodui nuclear power plant. Expectations are that the coal extraction by 2004 will give 2420MW compared to the current figures of 2390MW. In 2008, output is expected to reach 2890MW.
