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BMI View: Our core forecasts for Bulgaria's power sector again remain unchanged this quarter. Limited
investment in new power infrastructure means capacity and generation are expected to grow only slowly
throughout the forecast period, leaving Bulgaria heavily reliant on coal-fired power plants and, to a lesser
extent, existing nuclear facilities, which are being upgraded. Despite the slow growth, Bulgaria will
continue to posit an energy surplus and will continue to export electricity via several major cross-border
interconnections. There is some scope for renewed investor interest should reforms to the wholesale
electricity market gain traction, however corruption remains a significant barrier to new developments and
limited domestic demand will also curtail growth potential.
Latest Updates And Structural Trends
? While the upgrade of Unit 5 of the Kozludy nuclear plant has been completed and work on Unit 6 is
ongoing, we do not currently factor the plan for a seventh reactor at Kozloduy - due to be completed in
2023 - into our forecasts. If the proposal comes to fruition at all, it will likely do so after the end of our
forecast period, which runs to 2025.
? Prime Minister Boyko Borissov revived the possibility of restarting construction at the mothballed Belene
plant, proposing in August 2016 that a private sector partner be found for the 2000MW project. The
announcement has all the hallmarks of a last resort, after the government tried, to no avail, to sell some of
the completed components to Iran, in the immediate wake of a verdict by the International Court of
Arbitration in June that Bulgaria would have to pay EUR620mn in compensation to Russia's
Atomstroyexport, for work undertaken earlier. The government's chances of finding private partners
willing to stump up the remaining funds for the EUR10bn in financing appear remote, especially given
limited prospects for growth in electricity demand and the fact Belene is in an earthquake prone zone.