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EVN to Start Arbitration Procedure

Published: March 19, 2013; 12:49 · (Vindobona)

Today, Austrian power supply company EVN informed the state of Bulgaria about opening arbitration proceedings.

EVN to Start Arbitration Procedure / Picture: © Flickr

Massive protests and demands to nationalize energy companies and to cut energy prices lead to a decrease of around 7 % earlier this year. Due to the high energy prices and austerity measures, many Bulgarian citizens have been feeling exploited. Bulgaria´s President Rosen Plevneliev already explained that low wages are the real problem. No other country in the EU records a higher risk of poverty than Bulgaria with wages being less than half of the EU’s average. At the end of 2012, 49% of Bulgaria´s citizens were at risk of poverty, according to Eurostat’s reports.

The most important energy suppliers in Bulgaria are the Czech CEZ and Energo-Pro and Austrian EVN. As reported, EVN had been under surveillance by the Bulgarian government. However, the company now seems to have mounted a full-on offensive.

Today, EVN informed the government of Bulgaria about commencing arbitration proceedings according to the "Agreement Between the Republic of Austria and the Republic of Bulgaria for the Promotion and Protection of Investments" and the "Contract Regarding the Energy Charter" in order to protect its Bulgarian investments in EVN Bulgaria Elektrosnabdiavane EAD and EVN Bulgaria Elektrorazpredelenie EAD. The trials and negotiations are supposed to last from three months up to six months, EVN announced. During this period of time the parties involved must lead talks and try to settle the dispute amicably.

The reasons behind this anouncements are different adjustments that were made by regulatory authorities and other national organizations which had badly affected EVN by weakening the incomes of selling electric energy. Furthermore, because of not recognizing actual investments, the expense of feed-in compensation to which producers of renewable energy are entitled has shrunk.

In conclusion, today's statement is in reaction to the annulment of a special levy for network access of renewable energy production installations by the latest decision of Bulgarian’s administrative court in March 2013. From EVN's viewpoint, the result of this decision is a further violation of Bulgaria's investment protection obligations.