Czech power utility CEZ plans to invest 59 million levs ($38.9 million/30.2 million euro) in Bulgaria this year, a senior company official said on Tuesday.
Of the total amount of planned investments in 2011, 18 million levs will go for the connection of new capacities to the grid, CEZ's newly-appointed regional manager for Bulgaria, Petar Dokladal, told reporters.
Another 13.2 million levs will be allocated to maintenance of the power grid, Dokladal added. He did not specify in what areas the remainder of the planned investments will be made.
In 2010 CEZ invested 66.3 million levs in Bulgaria.
Dokladal reiterated the company's readiness to invest some 130 million levs per year. However, the energy regulator has put a cap on the power distributors' investment costs, saying that too sharp an increase would mean too high prices for consumers.
CEZ has been operating in Bulgaria since November 2004, when it acquired 67% of the electricity distribution companies serving Sofia City, the Sofia Region and the city of Pleven, in norhern Bulgaria.
Four of its units in Bulgaria are fully-owned by the Czech company. The other two - power suppliers CEZ Razpredelenie and CEZ Electro - are 67%-owned by CEZ and the remainder is held by the Bulgarian government.
Last week CEZ said that it set up a unit for investments in Bulgaria, CEZ Bulgarian Investments, to back its plans to expand into the renewables sector in the Balkan country. The Dutch-registered company is wholly owned by CEZ and has a core capital of 30,000 euro.
"The establishment of this company shows our strategic interest on the Bulgarian market," Dokladal said in an answer to a SeeNews question.
In the next three years CEZ Bulgarian Investments plans to develop water, solar, biomass and wind energy projects, he added but declined to elaborate on the size of the future investments. Dokladal also said that in the coming days a memorandum will be signed between CEZ Bulgarian Investments and Bulgaria on the terms for the implementation of these projects.
CEZ Bulgaria supplies electricity to 1.9 million end-users. It also owns a coal-fired power plant in Varna, on the Black Sea coast, whose production capacity it planned to rise. Its project for the construction of a new gas-fired unit at the Varna power plant, however, was put on hold.
"For the time being, the project is put on hold, because we have not secured long-time deliveries and there are uncertainties about the prices and we are not sure whether we would be able to repay our potential investments," Dokladal said. The company is not seeking a strategic investor, he added.
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