Maritza East I Power Company



Project number:


Business sector:


Notice type:


Environmental category:


Approval date:

26 Jul 2005



PSD disclosed:

12 May 2005

Project Description

The transaction will finance construction of a 2 x 300 MW net lignite-fired power plant (ME1) on a “build-own-operate-transfer” (BOOT) basis for a total cost of approximately EUR 1 billion. The plant will replace an existing 500 MW of capacity, of which 300 MW have already been phased out and dismantled. The power from the plant will be sold to NEK, the state-owned utility, under a 15-year Power Purchase Agreement (PPA).

Transition Impact

The proposed project represents a major step for private sector participation in the Bulgarian economy as it is represents one of the country’s largest foreign investment projects to date. A strong “demonstration effect” will be provided by the successful operation of a private generator in a liberalized market and the environmental benefits of introducing improved technology that will lead to compliance with EU environmental standards.

In addition, the investment will also contribute to the advancement of the current restructuring of the sector by facilitating dialogue between the GoB and investors and providing regulatory risk comfort to lenders. This restructuring is a condition to Bulgaria’s EU accession by 2008.

Finally, the new plant will replace older, less efficient generation and lower the economic cost of a significant source of domestic electricity, thus benefiting consumers.


The Client

The proposed project sponsor is AES Corp, a public corporation listed on the NYSE, and one of the world’s largest power developers.

AES will own the AES-3C Maritza East I EOOD, a special purpose company established to build, own and operate a 600 MW lignite-fired power plant at Maritza, Bulgaria.


EBRD Finance

Senior Debt Base Facilities:

  • EBRD A loan of EUR 157.5 million provided by EBRD
  • EBRD B loan of EUR 273 million led by 3 mandated lead arrangers

Project Cost

EUR 1,050 million.

Environmental Impact

Environmental classification and rationale
The project was screened A/1, requiring an environmental impact assessment (EIA) and environmental audit in line with the Bank’s Environmental Policy and Public Information Policy. The project, is also subject to Bulgarian EIA and IPPC requirements and an IPPC permit has been applied for in line with EU IPPC requirements.

Information reviewed during the environmental appraisal
An Environmental Audit and Analysis is being undertaken as part of the Banks due diligence.

Additional information was received, including;

1. Maritza East 1 Environmental Impact Assessment, Executive Summary, February 2005

2. Maritza East 1 TPP IPPC permit application in English, March 2005

3. Maritza East 1 Environmental Impact Assessment (in English); this is essentially the updated 2000 EIA, taking into account recent regulatory changes in the EU and Bulgaria, February 2005

4. Maritza East 1 Environmental Impact Assessment (in English), June 2000, ENSR International,

Members of the environment department visit the site in 2000-1, during the initial public consultations.

Key environmental issues and mitigation
The key environmental issue for ME 1 is air emissions. The new plant is in essence a replacement for an older plant, most of which has not been operational since the early 1990s. The new plant will be using state of the art pollution control technology inclusive of flue gas desulphurisation (FGD). The plant will meet the relevant EU and Bulgarian emission standards for particulates, SO2 and NOx, notably as specified by the EU Large Combustion Plant Directive (2001/80/EC).

The main impact from the plant will be sulphur dioxide emissions, and their impacts on the local ambient air quality. Based on historic data, the region has had a significant problem with air quality, notably fine dust particulates and sulphur dioxide as a result of the operation of three large and inefficient lignite fired power plants, including ME 1, and also as the result of opencast lignite mining. As part of a national strategy to address this issue, a programme of replacing existing capacity as well as installing new abatement equipment on existing plants has been implemented. This has resulted in a significant improvement of the local air quality in the past few years. The new power plant at ME1 is part of this programme, and should allow future compliance with EU and Bulgarian ambient air quality standards.

AES will operate the plant in compliance with Bulgarian laws and regulations as well as in accordance with EU environmental standards, including Best Available Technique (BAT) standards. An IPPC permit application has been submitted to the Bulgarian regulators and this is currently subject to negotiations. An environmental management system and continuous monitoring will be incorporated into day to day operations of the plants

Given the nature of fuel used (lignite), substantial carbon emissions will be associated with the project. This cannot be readily mitigated.

Water consumption and wastewater discharges will be minimised by a water circulation system, flue gas emission will be emitted via the cooling tower.

Solid waste consisting largely of fly ash and furnace bottom ash, will be transported by rail or road to a newly constructed disposal area in Dryanovo. This new landfill will be constructed in accordance with EU and Bulgarian environmental standards and regulations. The new landfill will also receive waste gypsum from the wet limestone FGD scrubbing system.

The plant will utilize an existing site and existing railway connections for lignite and limestone supply, this limits the new footprint of the plant. Fuel and limestone will be supplied from the nearby operational mines and quarries. A new 1 km railway line and a new high power voltage spur will need to be constructed to serve the plant. These investments will be undertaken by other entities, and appropriate permits will be obtained in due course. Initial information received indicated that the environmental impact associated with these investments is not major.

The Company will implement ISO 14001 Environmental Management System for its operations.

These measures will ensure that the environmental issues will be sufficiently managed to prevent or minimise impacts on staff and local population as well as on the environment.

Environmental opportunities
The proposed project is expected to bring significant environmental benefits as the new plant will be using state-of-the-art technology and replace older polluting generating units in the region. The project will also help to satisfy future demand for electricity in Bulgaria as old inefficient coal/lignite fired plants are decommissioned. Moreover, the ongoing decommissioning of nuclear power plant units at Kozloduy will need to be replaced by new generating capacity, and the project fits in within this strategy.

The project Company will achieve full compliance with Bulgarian and EU environmental emission standards and will help to attain EU ambient air quality standards in the area.

Summary of Environmental Action Plan
An Environmental Action Plan (EAP) will be developed to ensure the plant will implement environmental standards based on Best Available Techniques. The EAP addresses air emission control, house keeping and the overall management of environment, health and safety issues at the power plant and associated auxiliary operations such as the landfill.

Disclosure of information and consultation
AES has undertaken a public consultation and disclosure programme, in compliance with national and EBRD requirements, commencing in 2000 with an initial EIA.

Disclosed materials

1. 2005 EIA executive summary in English and Bulgarian

2. IPPC permit application in English and Bulgarian

3. 2005 EIA in English (updated 2000 EIA, taking into account recent regulatory changes in EU and Bulgaria)

4. 1999 EIA in Bulgarian

The materials are available in hard copy at the following locations in Bulgaria:

  • AES Sofia office (17 Mmoskovska St., Sofia 1000, Bulgaria) contact: Nadja Zelyova
  • EBRD Sofia office (67 Vitosha Blvd, 1st Fl., Ap. 4, Sofia 1000) contact: Tero Halmari (also available in London HQ)
  • Galabovo Municipality (59 Dimitar Blagoev St., Galabovo) contact: Svetla Shikova, Head of Environmental Department

An announcement about the public consultation period was made on March 30th in the Stara Zagora newspaper.

Monitoring and reporting
The Company will monitor the environmental impact of its operations in accordance with national law and regulations. The Bank will evaluate the project's compliance with the applicable environmental and social requirements during the lifetime of the project by reviewing annual environmental reports prepared for the project covering:

(i) ongoing performance of project-specific environmental, health and safety activities as reflected in the results of periodic and quantitative sampling and measuring programmes, and

(ii) the status of implementation of environmental mitigation and improvement measures. The Bank’s representatives will also conduct periodic site supervision visits when deemed appropriate.

There is an Environmental and Social Impact Assessment available for this project.

Technical Cooperation


Company Contact

Matthew Bartley
AES Corp.
4300 Wilson Boulevard
Arlington, VA 22203

Tel: +1 703 522-1315
+359 2988 1275



Business opportunities

For business opportunities or procurement, contact the client company.

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General enquiries

EBRD project enquiries not related to procurement:
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Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

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