US energy firm AES has signed agreements with four international banks to finance construction of a 1 billion euro ($1.2 billion) coal-fired power plant in Bulgaria.

The long-delayed project is Bulgaria’s largest wholly new investment to date and is central to replacing energy capacity it will lose by shutting down reactors at its Soviet-era Kozloduy nuclear power plant ahead of planned 2007 EU entry.
“This is the biggest investment in Bulgaria to date. It is an investment which will allow us to keep our position as the leading energy producer in the region,” Bulgarian Economy and Energy Minister Rumen Ovcharov said after the signing.
ING Bank, Calyon Bank, BNP Paribas and the European Bank for Reconstruction and Development (EBRD) agreed to lend 70 per cent of the funds to build the 670-megawatt plant, with AES providing the remaining 30 percent.
AES also signed a long-term power purchase agreement with Bulgaria’s dominant power firm NETC, and a commercial agreement with a local mine to supply it with coal.
It has tapped France’s Alstom Power to build the plant in Bulgaria’s Maritsa East power complex. Construction will begin next spring and the first of the plant’s two units should come on line in 2008 with a lifespan of 40 years.
Bulgaria, a Black Sea country of eight million people, contracted AES to build the plant in 2001, but the project stalled because of difficulties in securing financing.