The Legal 500

The Treaty between the Republic of Bulgaria and the Government of Qatar for Mutual Promotion and Investment Protection has been recently promulgated in the Bulgarian state gazette. The Treaty governs the relations between the two states regarding the investment activity on the territory of both countries. Its aim is to further intensify and develop the trade, economic and scientific-technical cooperation between the two republics by establishing conditions for fair and equitable treatment of investors.

The Bulgarian Law on the Renewable and Alternative Sources of Energy and Biofuel implements Directive 2001/77/EC of the European Parliament and of the Council of 27 September 2001 on the promotion of electricity produced from renewable energy sources in the internal electricity market and Directive 2003/30/EC of the European Parliament and of the Council of 8 May 2003 on the promotion of the use of biofuel or other renewable fuels for transport.  It regulates the public relations aimed at promoting the production and consumption of electric, heat and/or cooling energy generated by renewable and alternative energy sources as well as the production and consumption of biofuel.  Within the meaning of this law renewable energy sources are defined as natural energy sources containing sunlight, wind, water and geo-thermal energy including energy generated by waves and high and low tides.  Alternative energy sources are defined to be hydrogen, waste products generated as a result of technological process.  Biofuel is liquid or gaseous fuel for transport produced from biomass.

The year 2007 was fundamental to the development of the energy sector in Bulgaria. In compliance with Bulgaria’s responsibilities as an EU member, requirements for complete liberalisation of energy markets have been met by the amendments made in the statutory framework. Naturally, the new legal provisions are only a prerequisite for the factual liberalisation and realisation of the market mechanisms. Some consumers have become very familiar with the ins and outs of the liberalised market, particularly in the field of electroenergetics, where the industry structure presupposes development of market relations.

The amendments to the Ordinance on the Terms and Procedure for Registration of the Price of Locally Produced and Imported Tobacco Products, Trade in Tobacco Products and Control on Trade (the Ordinance) effective from late 2005 and early 2006 introduced some radical changes in the rules and procedure for registration of tobacco products available on the Bulgarian market

Over time, direct privatisation (as opposed to PPP projects) has gained importance for the development and restructuring of the Bulgarian energy sector. Recent practical experience shows that a successful direct privatisation of a power generation asset depends largely on the following milestones: (i) appropriate privatisation strategy; (ii) availability of purchase price enhancement mechanisms; and (iii) efficient bidding process and reasonable negotiations.Although not all of these factors are properly addressed during the different stages of the process, the practice shows that the more efforts are devoted to each of them, the less “broken deals” remain in the statistics.

The introduction of new, environmentally friendly energy sources has become an increasingly relevant issue over the recent years because conventional primary energy sources (coal, oil, gas) have grown more costly and their deposits are being depleted, and also because of the undesired climate change as a result of the high level of greenhouse emissions.