Headlines (September 16 2002):
July INDUSTRIAL SALES IN UPSURGE
The National Statistical Institute observes a rather bullish tendency in the July industrial sales, which have upped by 6.3% month-on-month and by 7.3% yoy.
Sales in the mining industry logged a 12% growth yoy; the processing industry boasts of a 7.7% sales increase. The energy sector - the generation of electricity of heating energy and of solid fuels - registered a moderate growth of 1.9% from the previous month. Year to-date the production of electricity, heating power, solid fuels and water has jumped by 1.8%. Year-to-date sales of the processing industrial sector dropped by 4%.
Tobacco products logged a positive tendency - sales hiked by 18%. Textiles sales grew by 31%, and timber, paper and cardboard production sales jumped by 34%.
IMF MISSION TO START ITS REGULAR MONITORING SESSION
An IMF mission headed by Jerald Schiff is expected in mid-September to Bulgaria to start scanning the budget’2003 parameters and the current budget’2002 performance. The mission will also scrutinize the government intentions of introducing changes in the tax policy.
FITCH CREDITING AGENCY EXAMINES BULGARIAN ECONOMY
Reps of the London-based Fitch Crediting Agency visited Bulgaria and held talks with government ministers and centers of International organization in a bid to form of clearer picture of the state of Bulgaria’s economy. To their mind Bulgaria’s economy on macroeconomic level is maintains a steady development. The government target of a 4% growth is considered feasible, though a slight drop in the growth index is more likely due to the country’s retarded trade contacts with the EC, which is Bulgaria’s main trade partner.
What is important, the FITCH representatives say, is that the current account deficit is under control and possible gaps can be filled in with new loans. If is happen to reach 6 - 6.5% by the end of the year, the larger part of the deficit could be financed by foreign direct investments /FDI/.
FITCH’s Edward Parker says that a major weakness of Bulgaria’s credit rating is the high ratio of the government public and foreign debt to the GDP and the debt structure. He considers the debt management programme encouraging and assesses highly the March debt swap operation, which led to a slight decrease of the debt nominal value and to a change of its structure.
The stability of the government is disconcerting for FITCH. If the cabinet popularity continues its downhill trend, it can swerve to a more populist policy and socially oriented expenditures, which might definitely cut off the chances of raising the crediting rating of the country.
ENTERGY HAS A FORTNIGHT TO GARNER FUNDS FOR ITS BULGARIAN ENERGY PROJECT
Time is running out for the American Entergy company, which must conclude the financial scheme on the Maritsa East 3 TPP upgrading project by the end of September. The project is worth EUR 470 million of which 75% are credits,, 25% are Entergy’s own capital. In this connection Energy Minister Kovachev met with the project manager Tom Ray to inquire after the developments.
Entergy and NEC signed a contract in the summer of 2001 for the modernization of the power plant Maritsa East 3. Under the contract NEC will be purchasing the generated energy in the course of 15 years. The French banks Credit Agricole and Societe Generale and the Black Sea Bank for Trade and Development have pledged willingness to finance the project. The three banks are ready to provide EUR 215 million. The EBRD Board has already approved a loan of EUR 123 million.
Bulgarian Bulbank, other local banks too, has indicated interest in funding the project.
Energy Minister has also met with the representative of the American AES company, which is contracted to two build new capacities of 650 MW in Maritsa East 1 TPP. The $850 million project has uncompleted financial scheme. AES is in the process of negotiating with potential partners, company sources disclosed. AES is still the contractor of the project and responsible for its development and management.