EVN BLAMES DELAYED PAYMENTS TO NEK ON LOW CASH FLOW

Power distributor EVN Bulgaria, the local unit of Austria's EVN, has delayed payments of electricity to state power utility NEK by several months due to the contraction in its cash flow in the second half of 2010, the company's regional manager for Bulgaria, Jorg Sollferner, said on March 24 2011.

EVN Bulgaria, which services the southeastern part of the country, saw its cash flows decrease by 36 million leva between October 2010 and March 2011, according to Sollferner.

"The reason for the reduced cash flow was the decision of the State Energy and Water Regulatory Commission to cut power prices in the summer of 2010, but consumption remained unchanged in the period compared with a year earlier," he said.

The reduced revenue also forced EVN to resort to a 50 million leva loan from Raiffeisenbank in February.

"Several major international banks refused to provide us with funding because of the regulatory environment in Bulgaria", the company said, but declined to name the financial entities.

The power distributor hopes that the price of electricity for end-consumers will be increased by five per cent in July 2011 in order to proceed with its investment programme.