By Vladimir Petrov
SOFIA (Bulgaria), May 23 (SeeNews) – Bulgaria’s Eko Petroleum, supported by Italian engineering company Merloni Progetti, plans to start construction of a 200 million levs ($160.7 million/102.3 million euro) 51-megawatt (MW) generation plant to run on refined oilseeds by the end of 2008, the company CEO said on Friday.
Eko Bio Fuels Industry, a unit of Eko Petroleum, in which Merloni Progetti is about to take a 20% stake, has recently applied to Bulgaria’s energy regulator for a permit to build the alternative power plant in Vidin, in Bulgaria’s northwest.
“We are still exchanging information [with the regulator] on the technical papers. I suppose within 20 to 30 days maximum [a permit will be granted],” Petar Tsonev, CEO of Eko Bio Fuels Industry and Eko Petroleum, told SeeNews.
Bulgaria, which joined the EU in 2007, has to cover 11% of its gross domestic energy consumption by renewable energy sources by 2010, well above the current levels, in order to comply with EU directives.
The company also needs other documentation, including a building permit, approval by the Ministry of Environment for the project and a deal for linking to the country’s power grid with the state-owned operator, NEK, he added.
“Legal terms for all documents expire by the end of this year,” said Tsonev.
Eko Petroleum will cover 25% of the investment with own funds and raise funding for the remainder.
Financing has already been contracted with partners, Merloni Progetti, part of Italy’s Merloni Group, Italy’s bank Intesa Sanpaolo, and other “serious large international banks”, said Tsonev.
However, the regulator requires an agreement with NEK prior to issuing a licence, which, in turn, is required as a guarantee for the financing.
The company relies on domestic supplies, mainly sunflower, under contracts with farmers in the Vidin region. Eko Petroleum additionally is investing in a biodiesel refinery in Vidin that will provide fuel for the generator. The company had previously negotiated the refinery construction with German Lurgi, but later preferred Merloni, which has offered a more flexible processing facility.
The estimated price per kilowatthour (kWh) at the planned generator is 0.35 lev, which is almost three times higher than the current retail price of electricity for households.
The company has set a range of raw materials’ supply prices between 625.5 euro per tonne and 764.5 euro.
Eko Bio Fuels Industry has estimated investment costs per kWh of electricity from the alternative energy plant at 1,085 euro, but the energy regulator has said that they should not exceed 600 euro, according to Sofia-based Capital weekly.
This compares with up to 530 euro per kWh of electricity generated by gas-fired turbines.
Eko Petroleum ( www.ekopetroleum.com ) has 21 petrol stations across Bulgaria, a nation of 7.6 million. It also has a retailing and catering network, a fuel storage facility and a cargo port in Vidin.
(1 euro = 1.95583 Bulgarian levs)
Choose your newsletter by Renewables Now. Join for free!