Bulgaria provides state aid to businesses for power costs spike

Bulgaria will extend 450 million levs ($268 million) in state aid to businesses to help them to cope with soaring electricity prices, interim Prime Minister Stefan Yanev said on Thursday.

Bulgaria will extend 450 million levs ($268 million) in state aid to businesses to help them to cope with soaring electricity prices, interim Prime Minister Stefan Yanev said on Thursday. The government will cover partially the power bills to more than 630,000 companies, providing 110 levs ($65.50) per each megawatt hour of electricity used by them in October and November, Yanev told reporters.

"The compensation will be fully paid by the end of the year," Yanev said. Most EU countries have already drawn up emergency action plans to shield consumers from the price spike, including energy tax cuts and subsidies for poorer households.

The relief measures in Bulgaria are only focused on business consumers, as electricity prices for households are regulated and will stay unchanged until the end of the year. The electricity price for households was set at an average of about 115 levs per megawatt hour (MWh) in July.

On Thursday, the average price on the Bulgarian energy bourse's day-ahead platform, was 454 levs per MWh. The interim government was initially considering a six-month scheme to help struggling business power consumers, but it required parliamentary approval.

The Balkan country will have a working parliament only after a national election set for Nov. 14, and galloping energy prices have prompted Yanev's cabinet to look for a faster solution. The funds for the state aid will be secured by a transfer from the state-owned nuclear power plant Kozloduy to the state budget. The money will be deducted from the plant's dividend payments over the next few years, Yanev said. ($1 = 1.6795 leva)

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