EBRD Chips into Bulgarian Bond

The European Bank for Reconstruction and Development (EBRD) said August 22 it has invested €80mn in a five-year €550mn bond issued by state-owned Bulgarian Energy Holding (BEH) to support reform of the country's energy sector.

BEH, which pools all state energy assets in Bulgaria, has raised funds to restructure its balance sheet in a move to improve the firm’s long-term financial sustainability. The company is the backbone of Bulgaria's energy sector, which has recently struggled with a tariff deficit. In early 2015, the government launched a comprehensive reform plan to restore the financial viability of the power sector and to promote liberalisation of the energy market. EBRD said the bond, issued on the Irish Stock Exchange, followed several European roadshows and attracted several international investors.

Two weeks ago the EU also allocated €29.9mn to build a 140-km electricity interconnector between Dobrudja and Burgas in Bulgaria.

Bulgaria's prime minister Boiko Borysov has long mounted a campaign to turn his country into a hub for gas imports into Europe. BEH's activities however in the Bulgarian gas and power markets have in the past been subject to European Commission anti-trust scrutiny, with its officials as recently as March saying the EC was still investigating Russian gas exports to Bulgaria.

Mark Smedley