In a joint announcement today, New Orleans-based energy company, Entergy, Bulgaria’s National Electric Company, and Bulgaria’s State Agency of Energy announced the conclusion of commercial negotiations for rehabilitation of the 840 MW Maritza East III power plant, located in southeastern Bulgaria.

Finalization of the commercial agreements will now enable financing to be sought with the project expected to cost approximately $470 million. The package includes a power purchase agreement for the full output of the plant, an agreement for lignite fuel supply from the adjacent mine facility, an agreement to transfer ownership of the assets to the NEK and Entergy jointly-held company, and an equity investment and shareholders agreement.

After project financing has been arranged, the Maritza East III rehabilitation project will be carried out by the joint venture company, which was established in June 1999. The shareholding division in the joint venture company is currently Entergy 51 per cent and 49 per cent NEK; however it is anticipated that this will change to approximately Entergy 70 per cent and 30 per cent NEK at financial close.

The scope of the project includes rehabilitation and refurbishment of the existing four generation units and installation of flue gas desurphurizer systems. The rehabilitation investment will include upgrading operating systems and controls, plus boiler and turbine updates. The project will take approximately three and a half years to complete after financial close.

“The environmental upgrades planned for the Maritza East III plant represent one of the largest individual pollution control efforts in all of Europe. When completed the plant will for the first time meet European and Bulgarian air emission requirements and will help to secure Bulgaria’s energy independence,” noted Geoff Roberts, president and chief executive officer of Entergy Wholesale Operations.

The project will have significant positive economic, environmental, and social impacts on the region around the power plant. While the refurbishment is underway, approximately 600 new jobs will be created. In addition over $75 million in goods and services for the investment will be supplied by Bulgarian companies.

Entergy is a major utility in the states of Texas, Louisiana, Arkansas and Mississippi serving 2.6 million industrial and domestic customers. It also owns, manages or invests in power plants generating nearly 30000 MW.