* New energy body aims to improve decision making
* Bulgaria is one of the most corrupt EU members
* South Stream gas pipeline remains frozen
(Releads, adds details)
By Angel Krasimirov
SOFIA, Aug 27 Bulgaria's interim government said
it had set up an energy board to ensure that badly needed
multi-billion euro projects in the poorest European Union state
The board will assist the incumbent cabinet in an attempt to
stabilise the energy sector of the Balkan country, which is
deemed one of the most corrupt nations in the European Union.
"The energy board will analyse the state of the energy
sector and will determine the reasons behind the instability of
the energy system," the government said on Wednesday.
The board will be led by Interim Deputy Prime Minister
Ekaterina Zaharieva and is expected to bring together market
participants, the regulator and experts from the European
Commission, the World Bank and the European Bank for
Reconstruction and Development.
"We could say the energy sector is in a very poor financial
state," Interim Economy and Energy Minister Vasil Shtonov said
on a local television channel.
A Socialist-led government resigned last month after being
in power for just over a year, criticised for the way it handled
large-scale infrastructure projects such as the Russian-led
South Stream gas pipeline.
South Stream, expected to cost $40 billion, has been
designed to carry Russian gas to central Europe via the Black
Sea, bypassing Ukraine. Bulgarian President Rosen Plevneliev had
said the project will remain frozen until Sofia gets an EU green
The interim cabinet, which took charge on Aug. 6, will leave
to its successor a move to approve another major agreement with
Westinghouse of Toshiba Corp for construction of a new
nuclear reactor. The next government is to take over following
parliamentary elections in October.
State-owned power company NEK said on Wednesday it would
increase electricity prices by 16 percent from next month for
industrial consumers that do not buy energy on the free market.
The move comes just days after NEK said it had amassed debts
of 3.53 billion levs ($2.4 billion).
The price hike will affect around 20 percent of companies in
Bulgaria including water utilities, state railway lines,
schools, hospitals and universities.
On Tuesday, Interim Deputy PM Zaharieva said NEK was losing
about 50 million levs a month, while giving preferential
treatment to firms with political connections.
Electricity costs are a politically sensitive issue in
Bulgaria, where power bills consume a large slice of household
income especially during the winter season.
Bulgaria raised power prices by an average of just 2 percent
as of July 1, despite concerns over the energy sector losses.
Shtonov also said on Wednesday that a member of the
Bulgarian Energy Holding (BEH) board, Ilko Zhelyazkov, had been
dismissed for "not working well". It was the second official at
BEH, which owns NEK and other major state energy companies, to
be sacked by the government within a week.
Earlier this month, the EU antitrust watchdog told
Bulgaria's state-run power firm that restrictions on where the
electricity it supplies is resold could amount to
anti-competitive behaviour and lead to a fine.
($1 = 1.4831 Bulgarian lev)
(Writing by Radu Marinas; editing by Jane Baird)