1. Energy Sector Overview
 Positioning of Bulgaria as a reliable base for the transit of oil, natural gas and electric power and as a regional dispatching centеr
 Biggest exporter of electricity on the Balkans – 6,790 GWh
 Available electricity generation capacity– 10,234МW
 Trend towards greater energy independence through development of local energy resources

2. Investments in the Energy Sector
Project: Rehabilitation of U 1-4 & construction of FGDs at units 5 and 6 of Maritsa East 2 TPP
Rehabilitation of 4x150 MW units + installation of FGDs & Construction of FGDs at units 5 and 6
EPC Contractor U1-4: Mitsui Co Ltd, Japan EPC Contractor FGDs 5&6 : tender May 2004
Total investment EUR 226 M financed by JBIC – 85% of the project's cost 75 million euro, co-financed by ISPA (grant), EBRD (credit) and Maritsa East
Status: financial arrangements in process, S&P assigned 'BB' long-term corporate credit rating to Maritsa East II TPP

3. Investments in the Energy Sector
Project: Construction of replacing capacity on the site of Maritsa East 1
New capacity 2x335 MW + installation of FGD`s
Total expected investment: EUR 900 M
Project financed: BOO
Status: financial arrangements in process, expected financial closure end 2004
Expression of interest:
AES;
Mitsui + ENEL

4. Gas Bridge between Asia and Europe
NABUCCO GAS PIPELINE PROJECT
Gas Bridge between Asia and Europe
BASIC DATA
The pipeline length – km
Consumption estimated: billion m3 p.a.
Status: Feasibility Study ongoing; New pipeline effective operation expected 2012;
Starting at Georgian/Turkish and Iranian/Turkish border leading to Central and West European markets
Estimated investments costs – 4.4 Billion Euros

5. The Regional Perspective
New natural gas interconnections
The main destinations:
Increase of Russian natural gas transit through Bulgaria to Greece, Turkey and FYROM.
Opening up of opportunities for Russian natural gas transit to Italy by means of a transit gas pipeline viewed as part of the development of European corridor № 8.
Construction of a gas pipeline between Bulgaria and Serbia and Montenegro for Russian natural gas transit.
The “NABUCCO” Project

6. Credit Rating of Bulgaria Bulgaria has proven higher investment credibility
June 2004 Standard&Poor’s gave an investment-grade foreign-currency rating
BBВ- (stable outlook) by Standard&Poor’s;
BBВ- (stable outlook) by Fitch IBCA;
Bа1 (stable outlook) by Moody’s;
BBВ- (positive outlook) by the Japan Credit Rating Agency

7. Tax Reform – Budget 2005  establishing new enterprise
 Corporate tax: 15%
 Income tax rate: min - 10%; max - 24%
 Increasing the amortization norm for new plant and equipment: 50%
 Expenditure on research and development of the companies are not subjects to taxation
 Tax Preferences:
 establishing new enterprise
 expanding of an enterprise
 increasing the average number of employees

8. Investment Categories
Third category – universal measures (Euro mln.)
 Submission of information, prepared and processed in advance;
 Certificate, specifying the investment category and the type of administrative services, provided by the central and local executive authorities;
 Minimum deadlines.
Second investment category (Euro mln.)
 Individual administrative services;
 Individual information services;
 Institutional support.
First investment category (above Euro 50 mln.)
 Universal measures;
 Institutional support;
 State aid for developing the necessary elements of technical infrastructure.

9. Requirements to investors
 Establishing a new enterprise, expanding or modernizing an existing one
 Term of project implementation – up to 3 years
 Creating new jobs
 Economic efficiency

10. Investment incentives in Bulgaria
 15% corporate income tax in 2005
 0% corporate tax in areas with above average unemployment
 Depreciation rates – 2 years for computers and related equipment and 3 1/3 years for manufacturing equipment
 2-year VAT exemption for imports of equipment, consumables and components related to investment projects valued over € 5 million
 0% capital gains tax
 The highest bracket for personal income tax is only 29% for monthly income over € 300
 The Employment Agency’s Programmes and measures for employment of young people

11. Innovation Strategy measures for stimulating innovative and research potential
Stimuls for research, related to industry and the co-operation among R&D units, universities and business;
 Improvement of the innovations funding, evolving mechanisms for attracting private equity/capital;
 encouraging implementation of new technologies;
 support for the establishment of clusters in sectors, traditional for our country;
 support for newly established companies and firms that develop successfully in view of enhancing their innovative potential;
 creating mechanisms for attracting foreign investment in the spheres of science and technology.