VIENNA, March 19 Austrian energy group EVN said it will take legal action against Bulgaria if it is unable to negotiate concessions over an electricity dispute it says has cost it $66 million.
The company said it had told Bulgaria on Tuesday it would launch proceedings in an international arbitration court to safeguard its investments if no deal could be reached in the next three to six months.
EVN, which supplies and distributes electricity, is obliged to buy solar energy in Bulgaria at prices above market rates. The country's electricity regulator has also cut household prices following mass protests against costly energy and low living standards.
"These actions reduce the proceeds from the sale of electric energy," said EVN, which makes a third of its revenues from southeastern Europe, the bulk in Bulgaria.
EVN cut its full-year profit outlook last month, partly on the basis of higher costs in Bulgaria.
It said purchases of solar energy had cost it 100 million levs ($66 million) since last July and would cost it another 40 million over the next three months.
Solar parks are booming in Bulgaria thanks to incentives from the government, which has a target to have 16 percent of its energy coming from renewable sources by 2020.
But high electricity bills, partly due to a surge in expensive green energy, have prompted nationwide protests in the European Union's poorest country, toppling the government. Three people died after setting themselves on fire in protest.
In response, the Bulgarian energy regulator has cut electricity costs for households by an average of 7 percent, mainly at the expense of power distributors EVN, Czech CEZ and Energo-Pro.
EVN said a cooling-off period of three to six months would now start, during which time it would consult and try to negotiate a settlement over its increased costs.
($1 = 1.5094 Bulgarian levs) (Reporting by Georgina Prodhan; Additional reporting by Tsvetelia Tsolova in Sofia; Editing by Charlotte Cooper)