Crony Capitalism and political influence threaten energy security in Bulgaria: How two Bulgarian politicians became key players in the energy sector

The management boards of state-owned power plants are often dominated by political appointees and/or private interest networks which extract public resources via dubious public procurement tenders.2 The biggest thermal power plant (TPP) in Bulgaria is the state-owned Maritsa-Iztok 2 TPP. It suffers from rapidly increasing financial problems (more than BGN 900 mln. in debt as of early 2019) due to rising carbon offset prices3, aging technologies and mismanagement of the facility. In order to produce electricity (its working cycle is fully dependent on locally mined lignite coal), the TPP has to offset its large carbon footprint by purchasing sufficient carbon quotas. This closes the vicious circle – working more means accruing more debt to obtain the quotas, negatively affecting public resources invested in the facility.

 

You can download the case brief from HERE.

Varna TPP_web

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