SOFIA (Reuters) - Bulgarian Deputy Prime Minister Krasimir Karakachanov said on Tuesday that Energy Minister Temenuzhka Petkova’s resignation would not be accepted.
Last month Petkova tendered her resignation to Prime Minister Boyko Borissov following media reports she was linked to the owners of Inercom, a small company slated to buy Czech utility’s CEZ’s assets in Bulgaria.
A few hours later Borissov said he would accept Petkova’s resignation despite saying the government “had not influenced that deal in any way”.
On Tuesday, however, Bulgaria’s government performed a U-turn, saying Petkova has no reason to quit and would keep her post.
“Temenuzhka Petkova’s resignation would not be accepted,” Karakachanov, who is also defense minister, said, adding the decision had been taken at a meeting with the participation of most of the ministers in the center-right government.
The deal prompted concerns across the political spectrum that strategic energy assets in the European Union country were passing into the hands of owners about which little was known.
Inercom, with assets worth around 100 million levs ($63 million), is set to acquire a business with annual turnover of about 1.8 billion levs ($1.1 billion) that operates one third of the Balkan country’s power grid.
On Tuesday Inercom’s owner Ginka Varbakova started talks with CEZ in Prague over final approval of the sale as well as the potential Bulgarian state involvement in the deal. CEZ said talks on both points would continue until the end week.
Borissov, who has previously dismissed opposition Socialists’ calls for the state to buy back private energy assets, said the government was considering legal changes that would allow the state to have a say in similar deals despite objections from analysts and political parties, including Bulgaria’s ethnic Turkish MRF.
Last week Borissov urged the central bank and intelligence services to look into the deal, estimated to cost about 320 million euros. Inercom has said it will be financed by bank loans, but has declined to elaborate.
The Socialist party (BSP), the largest opposition party in the ex-communist country, has started a campaign against the CEZ sale, saying the Bulgarian state should be able to try and buy the power distributor and compete on the market.
BSP also initiated a petition to stop the deal and asked the chief prosecutor to check the origins of the funds with which Inercom plans to complete the deal. BSP will take part in a protest against CEZ sale in Sofia on Wednesday.
Energy prices are politically sensitive in the EU’s poorest member state, and a spike in electricity bills in 2013 toppled Borissov’s first government.
Reporting by Angel Krasimirov, editing by David Evans