New Bulgarian government seeks energy crisis solution
Business |
Bulgarian energy companies are heavily in debt, but the government will face challenges in raising prices.
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The recently elected Bulgarian government is struggling to find a solution to the country's energy crisis.
The Bulgarian energy sector is already in debt for between BGN 800 to BGN 1,200 million ($515.3 to $772.9 million), and the financial gap is rising rapidly, according to a report from the World Bank.
It is critical for the operators to raise electricity prices -- Bulgaria has the lowest fees for electricity of all the member countries in the European Union, according to World Bank statistics. But households in Bulgaria depend on electricity for almost all energy requirements, and the poor would be hit hard by a price rise. The last price hike provoked mass demonstrations across the country in 2013, and ultimately led to the resignation of the prime minister and national elections.
Bulgaria just went through the early elections on October, 5 and Citizens for European Development of Bulgaria Party (GERB) is the leading party in a shaky coalition with no outright majority.
Bulgarian officials say that political instability is preventing the government from addressing the pressing issues in the energy sector.
"Bulgaria needs a national consensus on the major energy sector development priorities," Anton Pavlov, deputy minister for energy policy in the Bulgarian Ministry of Economy and Energy, told The Anadolu Agency.
"That is why the caretaker government created the Energy Board comprising all the stakeholders concerned as well as all Bulgarian energy sector investors," Pavlov explained. The Energy Board, established in early September, is a consultative body in energy issues which is responsible for leading the liberalization of the sector.
Some observers believe that a viable consensus is emerging in Bulgarian politics on the energy crisis.
"The results of the elections indicate upcoming difficulties on appointing a new Bulgarian government. Nonetheless, one of the views, which all political parties share is that there is a need for consensus on what should be done to stabilize the Bulgarian energy sector," says Slavtcho Neykov, the former director of the Vienna-based international energy policy organization Energy Community.
The president of Bulgarian Energy Forum, Ivan Hinovski, agrees. "Without a national consensus, the unpopular reforms could never be implemented. Otherwise, some of the political parties would oppose the measures just to get votes."
"The newly elected members of parliament have stated that one of the first priorities will be the resolution of the current crisis, including changes in energy legislation. There is an accepted understanding about the need for a future increase of electricity prices in Bulgaria in line with the criticism of European Commission," said Hinovski.
In a report issued last week, the EU's executive body recommended that electricity prices be hiked to address flaws in financing the power system in Bulgaria.
Neykov also stated there is a need for transparency in the politics aside the national consensus.
"Another encouraging element is that all politicians loudly demand more transparency from the energy sector, the discouraging practices in the recent years under the socialist government -- which was forced to resign -- should be completely abolished," said Neykov.
"The lack of transparency and clear incompetence on managerial and regulatory level due to political interference and "friendly" appointments on key positions caused the rapid increase of the financial disintegration of the system," Neykov insisted.
Anadolu Agency
The Bulgarian energy sector is already in debt for between BGN 800 to BGN 1,200 million ($515.3 to $772.9 million), and the financial gap is rising rapidly, according to a report from the World Bank.
It is critical for the operators to raise electricity prices -- Bulgaria has the lowest fees for electricity of all the member countries in the European Union, according to World Bank statistics. But households in Bulgaria depend on electricity for almost all energy requirements, and the poor would be hit hard by a price rise. The last price hike provoked mass demonstrations across the country in 2013, and ultimately led to the resignation of the prime minister and national elections.
Bulgaria just went through the early elections on October, 5 and Citizens for European Development of Bulgaria Party (GERB) is the leading party in a shaky coalition with no outright majority.
Bulgarian officials say that political instability is preventing the government from addressing the pressing issues in the energy sector.
"Bulgaria needs a national consensus on the major energy sector development priorities," Anton Pavlov, deputy minister for energy policy in the Bulgarian Ministry of Economy and Energy, told The Anadolu Agency.
"That is why the caretaker government created the Energy Board comprising all the stakeholders concerned as well as all Bulgarian energy sector investors," Pavlov explained. The Energy Board, established in early September, is a consultative body in energy issues which is responsible for leading the liberalization of the sector.
Some observers believe that a viable consensus is emerging in Bulgarian politics on the energy crisis.
"The results of the elections indicate upcoming difficulties on appointing a new Bulgarian government. Nonetheless, one of the views, which all political parties share is that there is a need for consensus on what should be done to stabilize the Bulgarian energy sector," says Slavtcho Neykov, the former director of the Vienna-based international energy policy organization Energy Community.
The president of Bulgarian Energy Forum, Ivan Hinovski, agrees. "Without a national consensus, the unpopular reforms could never be implemented. Otherwise, some of the political parties would oppose the measures just to get votes."
"The newly elected members of parliament have stated that one of the first priorities will be the resolution of the current crisis, including changes in energy legislation. There is an accepted understanding about the need for a future increase of electricity prices in Bulgaria in line with the criticism of European Commission," said Hinovski.
In a report issued last week, the EU's executive body recommended that electricity prices be hiked to address flaws in financing the power system in Bulgaria.
Neykov also stated there is a need for transparency in the politics aside the national consensus.
"Another encouraging element is that all politicians loudly demand more transparency from the energy sector, the discouraging practices in the recent years under the socialist government -- which was forced to resign -- should be completely abolished," said Neykov.
"The lack of transparency and clear incompetence on managerial and regulatory level due to political interference and "friendly" appointments on key positions caused the rapid increase of the financial disintegration of the system," Neykov insisted.
Anadolu Agency
