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Southeast Europe: Weekly rundown March 11 - 15

Southeast Europe: Weekly rundown March 11 - 15 Author: Bulgaria's Ministry of Energy / All rights reserved.

SOFIA (Bulgaria), March 15 (SeeNews) - Bulgaria launched a procedure for selecting a strategic investor in a project for construction of a second nuclear power plant in the country; Serbia invited binding bids for booking of capacity for transit of natural gas via a planned section of the TurkStream pipeline that will connect Bulgaria and Hungary; and Raiffeisen Bank International said it is considering acquisitions in strategically relevant markets, including Bulgaria, Romania and Serbia: these were some of the most interesting developments in Southeast Europe over the past week.

Following is a selection of these, and more of our top stories:



Bulgaria's energy ministry said on Monday that it has launched a procedure for selecting a strategic investor in a project for construction of a nuclear power plant (NPP) in Belene, on the Danube river.

The candidates can also state their interest in acquiring a minority interest in the future project company, and/or in buying electricity from the planned NPP, the energy ministry said in a statement.

"This call aims to provide certain information to the parties wishing to express their interest in participating in the procedure," it added.

Belene NPP must be built on a market basis, as the Bulgarian government will not sign long-term power purchase agreements with the investor, nor provide state guarantees.Bulgaria will participate in the project company via a non-monetary contribution - the reactors and other equipment plus the construction site and the respective licences.

The deadline for submitting expressions of interest is the 90th day following the publication of the invitation in the Official Journal of the European Union. The procedure is expected to be completed within one year.

In June 2018, the government mandated the energy minister to seek options for the construction of the Belene NPP with the participation of a strategic investor. 

In December 2016, following international arbitration, Bulgaria paid 601.6 million euro ($676.6 million) in compensation to Atomstroyexport for the equipment already manufactured by the Russian company for the project. The equipment is now stored at the site designated for the construction of the power plant.



Serbia's Gastrans, a subsidiary of Swiss-based South Stream Serbia, said it has invited binding bids for booking of capacity for transit of natural gas via a planned section of the TurkStream pipeline that will connect Bulgaria and Hungary. 

Companies that placed non-binding bids in the market test of the project carried out last year are now invited to submit binding bids for gas transit between January 1, 2020, and September 30, 2039, Gastrans said in a notice.

The total volume of available annual capacity is 395.2 GWh/day at the link with Bulgaria, 124.2 GWh/day at exit points in Serbia and 271.02 GWh/day at the interconnection with Hungary, Gastrans said.

The deadline for submitting non-binding bids is March 18. Once the deadline has expired, Gastrans shall notify bidders on non-acceptance of their binding bids by March 23 and the other bidders on acceptance of their bids by March 29.

Last year, Gastrans received non-binding bids for the import of 9,139 GWh of natural gas via the link with Bulgaria and the transit of a total of 5,258 GWh per day of natural gas to Hungary in 2019-2039 as part of a market test for booking capacity in the pipeline on Serbian territory. 

The Energy Community said in February Gastrans should offer on independent markets such as the South East European Power Exchange 30% of the natural gas it will receive through the future branch of Gazprom's TurkStream pipeline on its territory. The natural gas shall be offered on a quarterly basis and the price shall not be higher than the price defined in the long-term contract of the entity, the Energy Community said in a detailed opinion on the exemption.

Gastrans is 100%-owned by Swiss-based South Stream Serbia, according to data from Serbia's commercial register. Russia's Gazprom owns a 51% stake in South Stream Serbia, while state-owned Srbijagas holds the remaining 49%, according to Gazprom data.

Gazprom plans to build a string of its Turk Stream pipeline for transit of natural gas to Europe from Turkey via Bulgaria, Serbia and Hungary. The future pipeline on the territory of Serbia, approximately 400 km in length, will link the Serbian natural gas transmission system to those of Bulgaria and Hungary.



Raiffeisen Bank International (RBI) said on Wednesday that is considering new acquisitions in order to strengthen its position in strategically relevant markets.

"This may entail organic growth and potential acquisitions of portfolios or small banks should a suitable opportunity arise and the price be right," CEO Johann Strobl said in an interview published alongside the lender's 2018 annual report when asked what the bank will do with the additional capital it raised last year.

"In certain CEE countries, a consolidation of the banking sector is underway and we want to play an active role in the process," Strobl added.

When asked which countries are relevant for the bank at present, Strobl answered that the Czech Republic, Slovakia, Serbia and Bulgaria are particularly interesting. "However, this does not mean that we do not want to grow in other CEE countries as well. We will need to reevaluate Romania," he said.

Concerning Romania, the lender noted in its 2018 report that at the end of last year, the Romanian government decided to introduce a new bank tax.

"As there is discussion surrounding the potential negative impact on the Romanian economy, there is still a need for consultation at government level. It therefore cannot be ruled out, that the draft which was presented at the end of 2018, could still be revised and mitigate the burden on the banking sector. The impact on RBI cannot be quantified at this point in time," RBI said.

RBI's global consolidated profit rose 14% in 2018 to 1.27 billion euro ($1.43 billion), while NPL ratio decreased further to 3.8%.

"2018 was the best year in the history of the bank. It is particularly pleasing that all of our network banks are generating profits. The main driver behind the very good result was the development in risk costs. We not only benefited from the very good economic developments in Central and Eastern Europe but also worked actively to improve our risk profile," Strobl said.

RBI is an Austria-based banking group with a strong presence in CEE, where nearly 47,000 employees service 16 million customers through 2,200 business outlets.

In SEE, RBI is present in Romania, Serbia, Albania, Bosnia and Herzegovina, Bulgaria, Croatia and Kosovo.



Automotive parts supplier Continental Romania said on Thursday it has invested 240 million euro ($271 million) in 2018 and will start developing mobility projects in Romanian cities.

Most investments last year were made in infrastructure, equipment and cutting-edge technology, Continental Romania said in a statement.

The company also said that starting this year it wishes to invest in partnerships with the Romanian cities in which it operates, in order to make mobility safer, more interconnected and cleaner.

"The communities near our locations add up to 1 million people, and a growing population causes more congestion, making traffic a major challenge for the future. We all want road safety, mobility, clean air and available parking spaces. To make this possible, cities need to rethink their traffic and transport systems," Continental Romania country head Christian von Albrichsfeld said.

At the end of 2018, Continental employed over 20,000 in its engineering centres and production facilities in Romania working in international teams on the key trends of automotive industry, namely connectivity, autonomous driving and electromobility, by using methods such as artificial intelligence and big data.

Between 1999 and 2018, Continental invested about 1.6 billion euro in its activities in Romania, where it has seven production facilities and four engineering centres located in Timisoara, Sibiu, Carei, Nadab, Brasov and Iasi. 

($=0.8844 euro)