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New EUR34m EBRD loan to Maritza East power plant
Environmental, rehab investment in Bulgarian power complex now totals €187m
A €34 million EBRD environmental loan will finance smokestack “scrubbers” to
reduce sulphur dioxide (SO2) emissions from Bulgaria’s largest thermal plant,
the 1,450 megawatt Maritza East II power plant. The Maritza East II plant is
one of the largest emitters of SO2 in the Balkans. The project supports
Bulgaria’s efforts to meet European Union environmental standards, a
pre-condition for EU membership which the country hopes to attain in 2007.
This 11-year loan brings the EBRD’s total investment in the vast Maritza East
coal-fired power generation complex to €187 million. The Bank has emphasised
improvements in environmental technology at the complex, which in the past has
been considered Europe’s number one SO2 “hotspot”. SO2 causes acid rain which
harms vegetation, damages buildings and acidifies water.
The Maritza East complex generates approximately 50 per cent of Bulgaria’s
electricity, noted Olivier Descamps, EBRD’s Business Group Director for
south-eastern Europe and the Caucasus; he is signing the loan agreement in
Sofia today. The environmental improvements at the Maritza East complex mean
the plant can continue using indigenous supplies of lignite (brown coal) for
power generation, even though it is high in sulphur and ash content.
The scrubbers, more properly known as flue gas de-sulphurisation plants, will
be installed on Maritza East II’s units 5 and 6 to achieve a 94 per cent
reduction in SO2 emissions. The EBRD previously funded €41 million in
scrubbers at Maritza East II’s units 7 and 8, and €112 million for the
rehabilitation (including the installation of scrubbers and dust filters) of
Maritza East III.
This latest Maritza East investment consists of a €22 million loan for EBRD’s
own books plus €12 million which will be syndicated to RZB, CALYON S.A. and
Citibank. A complementary €36.2 million comes as a grant from the European
Union’s Instrument for Structural Policies for Pre-Accession (ISPA) programme
which supports environmental investments. This is one of the first the first
ISPA grants for the electricity generation sector. Maritza East II, an
independent joint stock company owned by the Bulgarian government, will
provide €10.1 million for the project.
Mr Descamps noted this is the first time the state-owned power plant has
borrowed without benefit of a sovereign guarantee. The 11-year loan will be
backed by a five-year power purchase agreement; this means part of the plant’s
power generation remains uncommitted and available for sale to other eligible
electricity purchasers. This should promote development of the regional
electricity market, under the Energy Community of Southeast Europe (ECSEE)
initiative.
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