Czech CEZ Reportedly Sues Bulgaria over Banned Asset Sale

Czech energy company CEZ has filed an administrative claim against the Bulgarian competition watchdog, CPC, over a ban on selling its assets in Bulgaria to the local firm Inercom Group, Investor.bg reported on August 7.

In July, the CPC ruled that the highly controversial deal cannot be completed as Inercom would gain excessive power on the photovoltaic electricity market. At the time, local analysts suggested that the decision of the antitrust body had no serious grounds, and aimed to put an end to the major political dispute around the sale of CEZ's assets to an unknown company furthermore controlled by owners related to the minister of energy.

According to CEZ, the decision by the CPC is "inadequate" and the company has decided to challenge it. At the end of July, Inercom also appealed to the Supreme Administrative Court (SAC) over the decision.

When CEZ announced in February that it had selected the family-owned Inercom as the buyer of its Bulgarian assets, serious concerns arose about its ability to fund and run the assets. Adding to the controversy, Inercom was also found to be owned by a close friend of Bulgaria's energy minister.

The deal became a major political scandal and has further destabilised the already unstable ruling coalition. All the main political parties are using it as a tool to gain popularity and reduce support for Boyko Borissov's third government. Borissov himself is trying to calm down the situation and show that the government can and will control the situation and would not allow the sale to harm the interests of consumers.

Meanwhile, days after CPC announced its decision not to allow the deal, Bulgarian media reported that CEZ could resume negotiations with India Power Corporation — the next in line...