The European Bank for Reconstruction and Development (EBRD) has invested €100m in a seven-year €550m bond issued by the Bulgarian Energy Holding (BEH) to support reform of the country’s energy sector.
BEH is a state-owned firm that controls the country’s energy assets, including the public suppliers of electricity and gas in the region.
The newly issued bond will be used to refinance the €500m bond issued by BEH in 2013. It is said to be the largest corporate bond with longest tenor and is expected to deepen capital market.
EBRD intends to support BEH’s key power sector reforms and improve the long-term financial sustainability of the country’s power sector.
The Government of Bulgaria and EBRD have been cooperating on a ‘Bulgaria-Energy Sector Regulatory Development Programme’, which aims to help with market liberalisation in accordance with recent changes to the energy legislation.
The Bulgarian Government intends to promote liberalisation of its electricity market in line with the European Union (EU) acquis and restore the financial viability of the sector.
In 2016, the bank participated in the BEH bond purchase with an investment of €80m in a five-year €550m.
To date, EBRD is said to have invested nearly €3.9bn across various sectors in Bulgaria, and the energy sector investment accounts for about a third of the bank’s portfolio in the country.