Bulgarian wind energy association says Government risks banking crisis

Sofia, Bulgaria - From Tuesday onwards the income of all existing renewable energy projects in Bulgaria will be reduced massively.

The Bulgarian Wind Energy Association said, that at a secret meeting on Friday night the regulator (SWERC) decided to impose drastic cuts to the tariffs of renewable energy projects. Although the renewable energy law guaranteed investors fixed income for the next 12 to 20 years, from Tuesday onwards the income of all wind energy projects will be reduced by 10 %, solar projects from the previous years will lose 20 % and solar projects from the first half of this year will even lose 39 % of their income.

The drastic cuts may push the majority of all existing renewable energy projects into bankruptcy, as with income losses of 10 % to 39 % most projects will not able to make their loan repayments anymore. This means that several billion Leva worth of domestic and foreign investment along with hundreds of newly created jobs have been destroyed overnight. More so, the ultimate consequence will be that the Bulgarian banking system may end up with a massive amount of bad loans on its books. The actions taken by the government undermine the credibility and trustworthiness of Bulgaria as a European investment destination, the BGWEA says. Investors who trusted in the rule of law and the reliability of the government were promised good returns if they were willing to invest in Bulgaria and create jobs. But this trust of investors who invested in projects that take a decade and more to repay was betrayed overnight.

Source: IWR Online, 18 Sep 2012