The state will not acquire receivables of Bulgargaz and BEH from District Heating Sofia

The Council of Ministers canceled a decree and decisions of the previous cabinet due to the risk of the measure being declared inadmissible state aid

Energy / Bulgaria
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On the proposal of the Minister of Energy, Vladimir Malinov, the Council of Ministers canceled today the decree and decisions of the previous cabinet, by which claims of "Bulgargaz" EAD and Bulgarian Energy Holding EAD from "District Heating Sofia" EAD in the amount of up to BGN 1.6 billion were acquired by the state through the Minister of Energy. The rescinded documents approved changes to the Department of Energy's budget for additional payments and directed the Secretary of Energy to negotiate and acquire the receivables in question on behalf of the state. This was announced by the Council of Ministers today.

The Public Finance Act stipulates that when funds are allocated from the budget of a department in favor of non-budgetary organizations, the head of the department is responsible for carrying out an assessment of compliance with state aid legislation. The intended measure should have been notified to the European Commission for the purpose of legal certainty, but this was not done. The aid administrator is obliged not to put the measure into effect until the EC has ruled that it authorizes the aid or that the measure does not constitute such aid.

The provision of Art. 108, para. 1 of the Law on the State Budget of the Republic of Bulgaria provides that, based on an act of the Council of Ministers, on the proposal of the Minister of Energy, the state may acquire claims of "Bulgarian Energy Holding" EAD, and "Bulgargaz" - EAD, from "District Heating Sofia" - EAD, with a nominal amount of up to BGN 1.6 billion, at a price determined by an independent appraiser, in compliance with the legislation in the field of state aid. Given this factual situation, there is a real possibility that, upon notification to the European Commission, it will define the measure as state aid, explained Minister Malinov in his proposal.

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