State bleeds energy giants dry as sector crumbles

Bulgaria drains profits from state energy companies to fund central government operations rather than allowing enterprises to modernize facilities and improve technology, according to Yavor Kuyumdzhiev, who previously served as energy minister. The Kozloduy nuclear plant sells electricity at market rates reaching 290 leva per megawatt-hour but transfers all revenue above 110 leva to government coffers before paying taxes on the full amount. Authorities then claim 80 percent of remaining earnings under existing laws, leaving the facility without resources for upgrades.

Meanwhile, struggling energy firms receive hundreds of millions in budget transfers through Bulgarian Energy Holding to cover losses at Bulgargaz and heating utilities. The nation lacks experienced leadership to handle such complicated systems after nearly two decades of management by accountants and marketing professionals rather than technical experts, Kuyumdzhiev said during a television appearance. Current Energy Minister Zhecho Stankov represents an exception to this pattern.

The Lukoil refinery sale involves Gunvor, a Swiss-based trading house founded by a Swedish businessman and Russian partner Gennady Timchenko with Cyprus registration that obscures ownership details. Authorities instituted export restrictions on diesel and aviation fuels while verifying reserve levels meet 90-day requirements, though half the stockpiles sit outside national borders due to storage limitations.