TPP AES Galabovo implements previously agreed upon tariff reduction

April 28, 2016

TPP AES Galabovo, the most modern thermal power plant in Bulgaria and Eastern Europe, decreased its tariff, as agreed upon in the amendment to TPP AES Galabovo’s Power Purchase Agreement (PPA) signed in 2015, which will directly benefit end users. The new capacity price reduction of 14% became effective on April 27, 2016, leading to 50 million leva annual savings, or more than 500 million leva for Natzionalna Electricheska Kompania (NEK) for the remaining term of the PPA, which expires in 2026.

TPP AES Galabovo also paid 99 million leva to Mini Maritza Iztok (MMI), the plant’s coal supplier. The plant is using only local fuel and is among the biggest consumers of lignite produced by MMI. The payment of the amount, accumulated as a result of the delayed payments to TPP AES Galabovo, will contribute securing the investment program of MMI and guaranteeing the working places of thousands of Bulgarian miners.

The decrease of the capacity price and the payment of the due amount to MMI became possible as a result of the full payment of the arrears of NEK towards TPP AES Galabovo.  “I am happy to announce that our partner, NEK, paid all its arrears. This is the final step of the process of renegotiation of the PPA. The amended PPA brings direct benefits to the Bulgarian people and contributes to the efforts of the Government to restructure the energy sector”, said the Executive Director of AES Bulgaria Olivier Marquette.

“The Government of Bulgaria has made important progress to sustainably strengthen the energy sector and lower electricity prices for consumers”, said Andrés Gluski, AES President and Chief Executive Officer. “TPP AES Galabovo is one of the most reliable and cleanest coal-fired plants in Europe, using only domestically sourced fuel.  By meeting all of its contractual obligations, Bulgaria is sending a very positive sign to all foreign investors in the country”, Gluski added.

The 690 MW plant, located close to the town of Galabovo, produces electricity entirely from local lignite originating from the Maritza East Basin in South Bulgaria. In its production process, it uses the world’s best technologies to ensure optimal air quality, water management and safe waste storage, soil and groundwater preservation, in full compliance with the Directives of the European Union, the World Bank and the national legislation. With an estimated investment of nearly € 1,3 billion, TPP AES Galabovo is the largest foreign direct investment in Bulgaria since the start of the market reforms in 1989. The plant ensures about 5% of the installed power capacity of the country, supports the local economy and creates more than 350 direct jobs and over 2,000 indirect jobs. TPP AES Galabovo has been investing in the social and economic development of the local community through cultural and infrastructure programs including the reconstruction of a youth center in the municipality of Galabovo, which will provide a public park and facilities for cultural events.