Annual Separate Activity Report
Corporate Governance Statement
Independent Auditors’ Report
Annual Separate Financial Statements
Bulgarian Energy Holding EAD
31 December 2022
Corporate Governance Statement
Independent Auditors’ Report
Annual Separate Financial Statements
Bulgarian Energy Holding EAD
31 December 2022
Contents
Annual Separate Activity Report ................................................................................................................................... i
Corporate Governance Statement ................................................................................................................................. ii
Independent Auditors’ Report ...................................................................................................................................... iii
Annual Separate Financial Statements ......................................................................................................................... iv
Separate Statement of Profit or Loss ............................................................................................................................. 1
Separate Statement of Comprehensive Income ............................................................................................................. 2
Separate Statement of Financial Position ...................................................................................................................... 3
Separate Statement of Changes in Equity ..................................................................................................................... 5
Separate Statement of Cash Flow ................................................................................................................................. 7
Notes to the Separate Financial Statements .................................................................................................................. 8
1. Scope of activity ................................................................................................................................................ 8
2. Basis for the preparation of the separate financial statements ........................................................................... 8
3. Changes in the accounting policy .................................................................................................................... 10
4. Accounting policy ............................................................................................................................................ 10
5. Dividend income .............................................................................................................................................. 27
6. Revenues from contracts with customers......................................................................................................... 27
7. Other income ................................................................................................................................................... 28
10. Hired services expenses ................................................................................................................................... 29
11. Audit services remuneration ............................................................................................................................ 29
13. Other expenses ................................................................................................................................................. 29
16. Income tax expenses ........................................................................................................................................ 30
17. Earnings per share and dividends .................................................................................................................... 31
18. Investments in subsidiaries, associates and joint ventures ............................................................................... 31
19. Property, plant and equipment ......................................................................................................................... 33
20. Intangible assets ............................................................................................................................................... 34
21. Deferred tax assets ........................................................................................................................................... 35
22. Trade and other receivables ............................................................................................................................. 36
23. Receivables from Toplofikatsia Sofia EAD..................................................................................................... 36
24. Financial assets at fair value through other comprehensive income ................................................................ 37
26. Target contributions under Art. 36b, para. 1, item 4 of the Energy Act .......................................................... 38
27. Share capital and reserves ................................................................................................................................ 39
28. Issued bonds .................................................................................................................................................... 40
29. Loan from the European Investment Bank ...................................................................................................... 42
31. Trade and other liabilities ................................................................................................................................ 45
32. Related party disclosures ................................................................................................................................. 45
33. Non-cash transactions ...................................................................................................................................... 54
34. Commitments, lease and contingent liabilities ................................................................................................ 55
35. Financial risk management objectives and policy ........................................................................................... 57
36. Fair value measurement ................................................................................................................................... 64
37. Capital management policy and procedures .................................................................................................... 65
38. Events after the reporting period...................................................................................................................... 65
Annual Separate Activity Report ................................................................................................................................... i
Corporate Governance Statement ................................................................................................................................. ii
Independent Auditors’ Report ...................................................................................................................................... iii
Annual Separate Financial Statements ......................................................................................................................... iv
Separate Statement of Profit or Loss ............................................................................................................................. 1
Separate Statement of Comprehensive Income ............................................................................................................. 2
Separate Statement of Financial Position ...................................................................................................................... 3
Separate Statement of Changes in Equity ..................................................................................................................... 5
Separate Statement of Cash Flow ................................................................................................................................. 7
Notes to the Separate Financial Statements .................................................................................................................. 8
1. Scope of activity ................................................................................................................................................ 8
2. Basis for the preparation of the separate financial statements ........................................................................... 8
3. Changes in the accounting policy .................................................................................................................... 10
4. Accounting policy ............................................................................................................................................ 10
5. Dividend income .............................................................................................................................................. 27
6. Revenues from contracts with customers......................................................................................................... 27
7. Other income ................................................................................................................................................... 28
10. Hired services expenses ................................................................................................................................... 29
11. Audit services remuneration ............................................................................................................................ 29
13. Other expenses ................................................................................................................................................. 29
16. Income tax expenses ........................................................................................................................................ 30
17. Earnings per share and dividends .................................................................................................................... 31
18. Investments in subsidiaries, associates and joint ventures ............................................................................... 31
19. Property, plant and equipment ......................................................................................................................... 33
20. Intangible assets ............................................................................................................................................... 34
21. Deferred tax assets ........................................................................................................................................... 35
22. Trade and other receivables ............................................................................................................................. 36
23. Receivables from Toplofikatsia Sofia EAD..................................................................................................... 36
24. Financial assets at fair value through other comprehensive income ................................................................ 37
26. Target contributions under Art. 36b, para. 1, item 4 of the Energy Act .......................................................... 38
27. Share capital and reserves ................................................................................................................................ 39
28. Issued bonds .................................................................................................................................................... 40
29. Loan from the European Investment Bank ...................................................................................................... 42
31. Trade and other liabilities ................................................................................................................................ 45
32. Related party disclosures ................................................................................................................................. 45
33. Non-cash transactions ...................................................................................................................................... 54
34. Commitments, lease and contingent liabilities ................................................................................................ 55
35. Financial risk management objectives and policy ........................................................................................... 57
36. Fair value measurement ................................................................................................................................... 64
37. Capital management policy and procedures .................................................................................................... 65
38. Events after the reporting period...................................................................................................................... 65
BULGARIAN ENERGY HOLDING EAD
ANNUAL SEPARATE ACTIVITY REPORT
31 December 2022
ANNUAL SEPARATE ACTIVITY REPORT
31 December 2022
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
1
Board of Directors as at the date of publication of the Separate Financial Statements
Diyan Stanimirov Dimitrov
Ivan Todorov Andreev
Anton Georgiev Simeonov
Veselina Lachezarova Kanatova-Buchkova
Angel Emilov Yankov
Andrey Stephanov Zhivkov
Ivo Ivanov Todorov
Address
16 Veslets Str.
Triaditsa District
Sofia 1000
Sofia-city
Region Bulgaria
Auditors
Consortium DZZD AUDIT BEH with participants Grant Thornton OOD and Zaharinova Nexia EOOD, registered
respectively under Reg. No 032 and Reg. No 138 from the Register of Registered Auditors.
Annual Separate Activity Report
31 December 2022
1
Board of Directors as at the date of publication of the Separate Financial Statements
Diyan Stanimirov Dimitrov
Ivan Todorov Andreev
Anton Georgiev Simeonov
Veselina Lachezarova Kanatova-Buchkova
Angel Emilov Yankov
Andrey Stephanov Zhivkov
Ivo Ivanov Todorov
Address
16 Veslets Str.
Triaditsa District
Sofia 1000
Sofia-city
Region Bulgaria
Auditors
Consortium DZZD AUDIT BEH with participants Grant Thornton OOD and Zaharinova Nexia EOOD, registered
respectively under Reg. No 032 and Reg. No 138 from the Register of Registered Auditors.
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
2
Annual Separate Activity Report
This Annual Separate Activity Report of Bulgarian Energy Holding EAD (BEH EAD) as of 31.12.2022 presents
comments and analysis of financial statements and other material information concerning the financial position and
the results from the Company's activity covering the period from 1 January 2022 until 31 December 2022. It was
prepared in accordance with art. 39 of the Accountancy Act, art. 187e, art. 247, para. 1, 2 and 3 of the Commerce Act.
1. Company Information
Company name BULGARIAN ENERGY HOLDING EAD (BEH EAD)
UIC 831373560
Sole shareholder The Bulgarian State through the Ministry of Energy
Address 16 Veslets Str.
Triaditsa District
Sofia 1000
Sofia-city
Region Bulgaria
Scope of activity Acquisition, evaluation and sale of participations in trading companies operating
in the fields of production, extraction, transmission, transit, storage,
management, distribution, sale and/or purchase of natural gas, electricity,
thermal power, coals, as well as any other types of energy and raw materials for
the production and participation in the management of such companies, their
financing, acquisition, evaluation, issuance and sale of bonds, acquisition,
evaluation and sale of patents, concession of licenses for use of the above
companies as well as performance of own production or trade activity.
Directors As o f 31 December 2022, the Company is managed by a Board of Directors (BD)
consisting of:
Veselina Lachezarova Kanatova-Buchkova
Chairman of the BD
Angel Emilov Yankov
Deputy Chairman of the BD
Ivan Todorov Andreev
Member of BD and Executive Director
Zheko Mihaylov Zhekov
Member of the BD
Anton Georgiev Simeonov
Member of the BD
Stelian Penchev Koev
Member of the BD
Diyan Stanimirov Dimitrov
Member of the BD
Auditor State Insurance Company “AUDIT BEH” with participants in the merger of
auditing companies “Grant Thornton” OOD and “Zaharinova Nexia” EOOD,
registered respectively under Reg. No. 032 and Reg. No. 138 from the Register
of Registered Auditors
Annual Separate Activity Report
31 December 2022
2
Annual Separate Activity Report
This Annual Separate Activity Report of Bulgarian Energy Holding EAD (BEH EAD) as of 31.12.2022 presents
comments and analysis of financial statements and other material information concerning the financial position and
the results from the Company's activity covering the period from 1 January 2022 until 31 December 2022. It was
prepared in accordance with art. 39 of the Accountancy Act, art. 187e, art. 247, para. 1, 2 and 3 of the Commerce Act.
1. Company Information
Company name BULGARIAN ENERGY HOLDING EAD (BEH EAD)
UIC 831373560
Sole shareholder The Bulgarian State through the Ministry of Energy
Address 16 Veslets Str.
Triaditsa District
Sofia 1000
Sofia-city
Region Bulgaria
Scope of activity Acquisition, evaluation and sale of participations in trading companies operating
in the fields of production, extraction, transmission, transit, storage,
management, distribution, sale and/or purchase of natural gas, electricity,
thermal power, coals, as well as any other types of energy and raw materials for
the production and participation in the management of such companies, their
financing, acquisition, evaluation, issuance and sale of bonds, acquisition,
evaluation and sale of patents, concession of licenses for use of the above
companies as well as performance of own production or trade activity.
Directors As o f 31 December 2022, the Company is managed by a Board of Directors (BD)
consisting of:
Veselina Lachezarova Kanatova-Buchkova
Chairman of the BD
Angel Emilov Yankov
Deputy Chairman of the BD
Ivan Todorov Andreev
Member of BD and Executive Director
Zheko Mihaylov Zhekov
Member of the BD
Anton Georgiev Simeonov
Member of the BD
Stelian Penchev Koev
Member of the BD
Diyan Stanimirov Dimitrov
Member of the BD
Auditor State Insurance Company “AUDIT BEH” with participants in the merger of
auditing companies “Grant Thornton” OOD and “Zaharinova Nexia” EOOD,
registered respectively under Reg. No. 032 and Reg. No. 138 from the Register
of Registered Auditors
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
3
Basis for the preparation of
the financial statements
The Company prepares its financial statements in accordance with the
requirements of the International Financial Reporting Standards as adopted by
the European Union.
The Company also prepares consolidated financial statements in accordance
with the requirements of Art. 31 of the Accountancy Act. The annual financial
statements of the Company are published in the Commercial Register by 30 June
of the following year, according to Art. 38 of the Accountancy Act.
Bulgarian Energy Holding EAD operates in compliance with the Bulgarian
legislation.
Annual Separate Activity Report
31 December 2022
3
Basis for the preparation of
the financial statements
The Company prepares its financial statements in accordance with the
requirements of the International Financial Reporting Standards as adopted by
the European Union.
The Company also prepares consolidated financial statements in accordance
with the requirements of Art. 31 of the Accountancy Act. The annual financial
statements of the Company are published in the Commercial Register by 30 June
of the following year, according to Art. 38 of the Accountancy Act.
Bulgarian Energy Holding EAD operates in compliance with the Bulgarian
legislation.
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
4
1.1. Establishment, management, and structure of the Company
1.1.1. Legal status
Bulgarian Energy Holding EAD is a sole-owner joint-stock company, created by decision No. 1371/1990 of the Sofia
City Court, 100% state-owned.
The sole shareholder of the capital is the Republic of Bulgaria, and the rights of a sole shareholder are exercised by
the Minister of Energy, who has the capacity of principal and is authorized to take all decisions within the competence
of the sole shareholder of the capital, in compliance with the law and the Company statutes.
The Company is managed by a one-tier management system. Governing bodies are:
• General Meeting – Sole Shareholder of the Capital;
• Board of Directors.
1.1.2. History
Bulgarian Energy Holding EAD is the successor of the State company Oil and Gas, founded in 1973, renamed
“Gasosnabdyavane” in December 1975. At the beginning of 1990, the Company was renamed Bulgargaz in
accordance with the Business Activity Decree. Bulgargaz was transformed into a sole-owner joint-stock company by
order of the Council of Ministers of 12 May 1993.
At the end of 2004, the Company established the subsidiary Bulgartel EAD with scope of business activity:
construction, use and maintenance of telecommunications networks and information systems.
With a transformation plan dated 27 October 2006 and the annexes thereto, Bulgargaz EAD was transformed into
Bulgargaz Holding EAD through the splitting into two sole-owner joint-stock companies – Bulgartransgaz EAD and
Bulgargaz EAD under the conditions of Article 262 (d) of the Commerce Act. Bulgartransgaz EAD and Bulgargaz
EAD are the successors of the respective property (rights and obligations) of Bulgargaz Holding EAD. The
transformation was registered in the court by decision No. 45 of 15 January 2007 of Sofia City Court.
With protocol No. РД -21-305 dated 18.09.2008 the Minister of Economy and Energy changed the company name
from Bulgargaz Holding EAD to Bulgarian Energy Holding EAD, and increased the capital with assets at par value
of all shares of the capital of Natsionalna Elektricheska Kompania EAD, the NPP Kozloduy EAD, TPP Maritsa East
2 EAD, and Mini Maritsa Iztok EAD.
In compliance with the requirements of the Third Energy Package, the Bulgarian legislator has chosen the model of
the independent transmission operator as the unbundling option applicable to the Bulgarian electricity transmission
system operator. By decision of Protocol No. 71-2013 / 11.12.2013 of the Board of Directors of BEH EAD and in
accordance with the decision P-205 of 18.12.2013 of the State Energy and Water Regulation Commission,
restructuring of NEK EAD was carried out by separation of ESO EAD. As a transmission system operator, ESO EAD
remains part of the vertically integrated undertaking, but detailed unbundling rules that comply with European
directives and national legislation are introduced and implemented.
By Protocol No. РД -21-27/18.09.2017, a decision was taken to make a contribution in kind with the shares of Bulgartel
EAD – 50% of which were paid in as an increase of the capital of Bulgartransgaz EAD, and the remaining 50% – as
an increase of the capital of Electricity System Operator EAD.
At the time of preparation of the Annual Financial Statements, the State has not announced plans for full or partial
privatization of the Company. The assets united within the holding structure are of strategic significance for the
national security of the country and therefore Bulgarian Energy Holding EAD is included in the so- called “prohibitive”
privatization list, according to Annex 1 to Art. 3, para. 1 of the Privatization and Post-privatization Control Act.
1.1.3. Structure
Bulgarian Energy Holding EAD carries out its business activities by operating in different market segments through
its subsidiaries. The Company has no branches.
The Company does not carry out any R&D activities.
Annual Separate Activity Report
31 December 2022
4
1.1. Establishment, management, and structure of the Company
1.1.1. Legal status
Bulgarian Energy Holding EAD is a sole-owner joint-stock company, created by decision No. 1371/1990 of the Sofia
City Court, 100% state-owned.
The sole shareholder of the capital is the Republic of Bulgaria, and the rights of a sole shareholder are exercised by
the Minister of Energy, who has the capacity of principal and is authorized to take all decisions within the competence
of the sole shareholder of the capital, in compliance with the law and the Company statutes.
The Company is managed by a one-tier management system. Governing bodies are:
• General Meeting – Sole Shareholder of the Capital;
• Board of Directors.
1.1.2. History
Bulgarian Energy Holding EAD is the successor of the State company Oil and Gas, founded in 1973, renamed
“Gasosnabdyavane” in December 1975. At the beginning of 1990, the Company was renamed Bulgargaz in
accordance with the Business Activity Decree. Bulgargaz was transformed into a sole-owner joint-stock company by
order of the Council of Ministers of 12 May 1993.
At the end of 2004, the Company established the subsidiary Bulgartel EAD with scope of business activity:
construction, use and maintenance of telecommunications networks and information systems.
With a transformation plan dated 27 October 2006 and the annexes thereto, Bulgargaz EAD was transformed into
Bulgargaz Holding EAD through the splitting into two sole-owner joint-stock companies – Bulgartransgaz EAD and
Bulgargaz EAD under the conditions of Article 262 (d) of the Commerce Act. Bulgartransgaz EAD and Bulgargaz
EAD are the successors of the respective property (rights and obligations) of Bulgargaz Holding EAD. The
transformation was registered in the court by decision No. 45 of 15 January 2007 of Sofia City Court.
With protocol No. РД -21-305 dated 18.09.2008 the Minister of Economy and Energy changed the company name
from Bulgargaz Holding EAD to Bulgarian Energy Holding EAD, and increased the capital with assets at par value
of all shares of the capital of Natsionalna Elektricheska Kompania EAD, the NPP Kozloduy EAD, TPP Maritsa East
2 EAD, and Mini Maritsa Iztok EAD.
In compliance with the requirements of the Third Energy Package, the Bulgarian legislator has chosen the model of
the independent transmission operator as the unbundling option applicable to the Bulgarian electricity transmission
system operator. By decision of Protocol No. 71-2013 / 11.12.2013 of the Board of Directors of BEH EAD and in
accordance with the decision P-205 of 18.12.2013 of the State Energy and Water Regulation Commission,
restructuring of NEK EAD was carried out by separation of ESO EAD. As a transmission system operator, ESO EAD
remains part of the vertically integrated undertaking, but detailed unbundling rules that comply with European
directives and national legislation are introduced and implemented.
By Protocol No. РД -21-27/18.09.2017, a decision was taken to make a contribution in kind with the shares of Bulgartel
EAD – 50% of which were paid in as an increase of the capital of Bulgartransgaz EAD, and the remaining 50% – as
an increase of the capital of Electricity System Operator EAD.
At the time of preparation of the Annual Financial Statements, the State has not announced plans for full or partial
privatization of the Company. The assets united within the holding structure are of strategic significance for the
national security of the country and therefore Bulgarian Energy Holding EAD is included in the so- called “prohibitive”
privatization list, according to Annex 1 to Art. 3, para. 1 of the Privatization and Post-privatization Control Act.
1.1.3. Structure
Bulgarian Energy Holding EAD carries out its business activities by operating in different market segments through
its subsidiaries. The Company has no branches.
The Company does not carry out any R&D activities.
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
5
As of 31 December 2022, the BEH group includes in its structure the following companies:
Information under Art. 187e and Art. 247, para. 2 of the Commerce Act
1.1.4. Share capital
As of 31 December 2022, the share capital of the Company amounts to BGN 3,462,941,744 divided into 3,462,941,744
ordinary registered voting shares with a nominal value of BGN 1 each. The entire amount of the Company's capital is
subscribed and paid in full. The Company's shares are ordinary, registered, non-privileged, with voting rights.
The Company does not own treasury shares. In 2022, the Company did not acquire or transfer its own shares.
1.1.5. Board of Directors
Information about the remuneration of the members of the Board of Directors of Bulgarian Energy Holding EAD
under management and control contracts
Remuneration of the members of the Board of Directors 31 December
2022
31 December
2021
Short-term remunerations, including: BGN ’000 BGN’000
Remunerations for salaries and other short-term income 574 322
Social security costs 11 6
Social costs 90 47
Total remuneration 675 375
Information about the acquired, held and transferred shares and bonds of the Company by the members of
the Board of Directors of BEH EAD
Annual Separate Activity Report
31 December 2022
5
As of 31 December 2022, the BEH group includes in its structure the following companies:
Information under Art. 187e and Art. 247, para. 2 of the Commerce Act
1.1.4. Share capital
As of 31 December 2022, the share capital of the Company amounts to BGN 3,462,941,744 divided into 3,462,941,744
ordinary registered voting shares with a nominal value of BGN 1 each. The entire amount of the Company's capital is
subscribed and paid in full. The Company's shares are ordinary, registered, non-privileged, with voting rights.
The Company does not own treasury shares. In 2022, the Company did not acquire or transfer its own shares.
1.1.5. Board of Directors
Information about the remuneration of the members of the Board of Directors of Bulgarian Energy Holding EAD
under management and control contracts
Remuneration of the members of the Board of Directors 31 December
2022
31 December
2021
Short-term remunerations, including: BGN ’000 BGN’000
Remunerations for salaries and other short-term income 574 322
Social security costs 11 6
Social costs 90 47
Total remuneration 675 375
Information about the acquired, held and transferred shares and bonds of the Company by the members of
the Board of Directors of BEH EAD
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
6
The members of the Board of Directors of Bulgarian Energy Holding EAD do not own shares or bonds of the
Company. They do not have privileges or exclusive rights to acquire shares and bonds of the Company. All shares are
owned by the Bulgarian state.
Information on the participation of members of the Board of Directors in commercial companies as unlimited
liability partners, ownership of more than 25 percent of the share capital of another company, as well as their
participation in the management of other companies or cooperatives as procurators, managers or board
members for the period 01.01.2022 - 31.12.2022:
Ivan Todorov Andreev – Executive Director of Bulgarian Energy Holding EAD and member of the Board of
Directors as of 31.12.2022. He is a member of the Board of Directors in the following company:
ALLIANZ BULGARIA PENSION COMPANY AD, UIK: 121050885
Deyan Stanimirov Dimitrov – member of the BD of the Bulgarian Energy Holding EAD on 31.12. 2022 does not
participate as unlimited liability partner, does not own more than 25 percent of the share capital of another company,
and does not participate in the management of other companies or cooperatives as procurator, manager or board
member;
Stelian Penchev Koev – member of the BD of the Bulgarian Energy Holding EAD on 31.12. 2022 does not participate
as unlimited liability partner, does not own more than 25 percent of the share capital of another company, and does
not participate in the management of other companies or cooperatives as procurator, manager or board member;
Veselina Lachezarova Kanatova-Buchkova – chairman of the BD of the Bulgarian Energy Holding EAD as of
31.12.2022. She does not participate as unlimited liability partner, does not own more than 25 percent of the share
capital of another company, and does not participate in the management of other companies or cooperatives as
procurator, manager or board member.
Zheko Mihaylov Zhekov – member of the BD of the Bulgarian Energy Holding EAD as of 31.12.2022. He does not
participate as unlimited liability partner, does not own more than 25 percent of the share capital of another company,
and does not participate in the management of other companies or cooperatives as procurator, manager or board
member.
Anton Georgiev Simeonov – member of the BD of the Bulgarian Energy Holding EAD at 31.12.2022. He owns more
than 25 percent of the capital of the following trade company:
AGRA CONSULT OOD, UIC: 204018663 – Partner with 50% interest in the capital at the present moment.
He has an interest as a member of the Board of Directors at ENERGIA INSURANCE COMPANY AD, UIC:
831040933.
Angel Emilov Yankov – member of the Board of Directors of Bulgarian Energy Holding EAD at 31.12.2022. He is
also a member of the Supervisory Board of the following company:
ICGB AD, UIC: 201383265
Plamen Dilkov Dilkov – deputy-chairman of the BD of the Bulgarian Energy Holding EAD until 28 March 2022. He
does not participate as unlimited liability partner, does not own more than 25 percent of the share capital of another
company, and does not participate in the management of other companies or cooperatives as procurator, manager or
board member.
Valentin Aleksiev Nikolov – member of the BD until 7 January 2022. He owns more than 25 percent of the capital
of the following company:
SUZVEZDIE LUV EOOD – sole owner of the capital at the present time.
Alexander Plamenov Tszarnorechki – member of the BD of the Bulgarian Energy Holding EAD until 7 January
2022. He owns more than 25 percent of the capital of the following company:
MUSLITO OOD – associate and manager until 2 March 2022, when the company was erased due to liquidation;
Annual Separate Activity Report
31 December 2022
6
The members of the Board of Directors of Bulgarian Energy Holding EAD do not own shares or bonds of the
Company. They do not have privileges or exclusive rights to acquire shares and bonds of the Company. All shares are
owned by the Bulgarian state.
Information on the participation of members of the Board of Directors in commercial companies as unlimited
liability partners, ownership of more than 25 percent of the share capital of another company, as well as their
participation in the management of other companies or cooperatives as procurators, managers or board
members for the period 01.01.2022 - 31.12.2022:
Ivan Todorov Andreev – Executive Director of Bulgarian Energy Holding EAD and member of the Board of
Directors as of 31.12.2022. He is a member of the Board of Directors in the following company:
ALLIANZ BULGARIA PENSION COMPANY AD, UIK: 121050885
Deyan Stanimirov Dimitrov – member of the BD of the Bulgarian Energy Holding EAD on 31.12. 2022 does not
participate as unlimited liability partner, does not own more than 25 percent of the share capital of another company,
and does not participate in the management of other companies or cooperatives as procurator, manager or board
member;
Stelian Penchev Koev – member of the BD of the Bulgarian Energy Holding EAD on 31.12. 2022 does not participate
as unlimited liability partner, does not own more than 25 percent of the share capital of another company, and does
not participate in the management of other companies or cooperatives as procurator, manager or board member;
Veselina Lachezarova Kanatova-Buchkova – chairman of the BD of the Bulgarian Energy Holding EAD as of
31.12.2022. She does not participate as unlimited liability partner, does not own more than 25 percent of the share
capital of another company, and does not participate in the management of other companies or cooperatives as
procurator, manager or board member.
Zheko Mihaylov Zhekov – member of the BD of the Bulgarian Energy Holding EAD as of 31.12.2022. He does not
participate as unlimited liability partner, does not own more than 25 percent of the share capital of another company,
and does not participate in the management of other companies or cooperatives as procurator, manager or board
member.
Anton Georgiev Simeonov – member of the BD of the Bulgarian Energy Holding EAD at 31.12.2022. He owns more
than 25 percent of the capital of the following trade company:
AGRA CONSULT OOD, UIC: 204018663 – Partner with 50% interest in the capital at the present moment.
He has an interest as a member of the Board of Directors at ENERGIA INSURANCE COMPANY AD, UIC:
831040933.
Angel Emilov Yankov – member of the Board of Directors of Bulgarian Energy Holding EAD at 31.12.2022. He is
also a member of the Supervisory Board of the following company:
ICGB AD, UIC: 201383265
Plamen Dilkov Dilkov – deputy-chairman of the BD of the Bulgarian Energy Holding EAD until 28 March 2022. He
does not participate as unlimited liability partner, does not own more than 25 percent of the share capital of another
company, and does not participate in the management of other companies or cooperatives as procurator, manager or
board member.
Valentin Aleksiev Nikolov – member of the BD until 7 January 2022. He owns more than 25 percent of the capital
of the following company:
SUZVEZDIE LUV EOOD – sole owner of the capital at the present time.
Alexander Plamenov Tszarnorechki – member of the BD of the Bulgarian Energy Holding EAD until 7 January
2022. He owns more than 25 percent of the capital of the following company:
MUSLITO OOD – associate and manager until 2 March 2022, when the company was erased due to liquidation;
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
7
Information on contracts under Art. 240b of the Commerce Act
The Company has not concluded contracts with members of the Board of Directors, other than management and
control contracts, as well as with related parties.
1.1.6. Staff
As of 31 December 2022, the total number of employees of the Company under employment contracts is 94 people,
distributed in the following categories:
Registered number of staff 31 December
2022
31 December
2021
Total employees under an employment relationship, including 94 80
Executives 21 15
Analytical specialists 63 54
Applied specialists 1 2
Support staff 5 6
Vehicle operators 4 3
1.1.7. Related parties
Bulgarian Energy Holding EAD is the owner of an economically related group, which includes the following direct
subsidiaries as of 31 December 2022:
Company Country of
incorporation Share 31 December
2022
% BGN’000
Subsidiaries
Bulgartransgaz EAD Bulgaria 100.00% 734,569
Bulgargaz EAD Bulgaria 100.00% 325,391
NEK EAD Bulgaria 100.00% 1,051,427
NPP Kozloduy EAD Bulgaria 100.00% 101,716
TPP Maritsa East 2 EAD Bulgaria 100.00% 673,916
Mini Maritsa Iztok EAD Bulgaria 100.00% 65,000
ESO EAD Bulgaria 100.00% 96,103
Total subsidiaries 3,048,122
The Company participated in joint and associate companies as of 31 December 2022 as follows:
Company Country of
incorporation Share 31 December
2022
% BGN’000
Joint ventures
ICGB AD Bulgaria 50.00% 57,991
South Stream Bulgaria AD Bulgaria 50.00% 10,343
Total joint ventures 68,334
Associated companies
ZAD Energy Bulgaria 0.32% 21
Total associated companies 21
Annual Separate Activity Report
31 December 2022
7
Information on contracts under Art. 240b of the Commerce Act
The Company has not concluded contracts with members of the Board of Directors, other than management and
control contracts, as well as with related parties.
1.1.6. Staff
As of 31 December 2022, the total number of employees of the Company under employment contracts is 94 people,
distributed in the following categories:
Registered number of staff 31 December
2022
31 December
2021
Total employees under an employment relationship, including 94 80
Executives 21 15
Analytical specialists 63 54
Applied specialists 1 2
Support staff 5 6
Vehicle operators 4 3
1.1.7. Related parties
Bulgarian Energy Holding EAD is the owner of an economically related group, which includes the following direct
subsidiaries as of 31 December 2022:
Company Country of
incorporation Share 31 December
2022
% BGN’000
Subsidiaries
Bulgartransgaz EAD Bulgaria 100.00% 734,569
Bulgargaz EAD Bulgaria 100.00% 325,391
NEK EAD Bulgaria 100.00% 1,051,427
NPP Kozloduy EAD Bulgaria 100.00% 101,716
TPP Maritsa East 2 EAD Bulgaria 100.00% 673,916
Mini Maritsa Iztok EAD Bulgaria 100.00% 65,000
ESO EAD Bulgaria 100.00% 96,103
Total subsidiaries 3,048,122
The Company participated in joint and associate companies as of 31 December 2022 as follows:
Company Country of
incorporation Share 31 December
2022
% BGN’000
Joint ventures
ICGB AD Bulgaria 50.00% 57,991
South Stream Bulgaria AD Bulgaria 50.00% 10,343
Total joint ventures 68,334
Associated companies
ZAD Energy Bulgaria 0.32% 21
Total associated companies 21
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
8
The next table presents a summarized financial information based on the financial accounts of the associated and joint
ventures of the Company as of 31 December 2022.
31 December 2022 Total
assets
Total
liabilities
Revenue Net
profit/(los
s)
BGN’000 BGN’000 BGN’000 BGN’000
ICGB AD 535,277 427,730 18,618 5,042
South Streаm Bulgaria AD ( unaudited data) 20,807 181 - (300)
ZAD Energy 43,417 15,389 13,805 9,230
599,501 443,300 32,423 13,972
Joint venture ICGB AD
BEH EAD is a shareholder in ICGB AD – a company with an equal interest of BEH EAD and IGI Poseidon (a
company with an equal interest of DEPA S.A. and Edison SpA), registered in 2011 in the Republic of Bulgaria,
intended to build and become an owner and operator of a gas interconnection network IGB. In 2022, ICGB AD built
the gas interconnector between Greece-Bulgaria with a capacity of up to 3 billion m 3 per year from Komotini to Stara
Zagora with a length of 182 km.
Joint Venture South Stream Bulgaria AD
The South Stream project, whose realization was terminated, covered the construction of a new gas system for natural
gas transportation from Russia to the European market through Bulgaria, with a technical capacity of the 900 km
Black Sea section of 63 billion m 3 per year. Shareholders with equal interest in the joint venture on Bulgarian territory
(which does not operate anymore) are Bulgarian Energy Holding EAD and Gazprom Krasnodar.
2. Main results for 2022
2.1. Strategic projects
Interconnection Greece-Bulgaria (IGB)
The Interconnection Greece-Bulgaria (IGB) was put in commercial operation on 1 October 2022, when a reverse gas
pipeline was put into operation with a capacity up to 3 billion m 3 per, running from Komotini to Stara Zagora, with a
length of 182 km, 152 km of which on Bulgarian territory.
The project was realized by ICGB AD, with equal participation from BEH EAD and IGI Poseidon. ICGB AD built
and now owns the gas pipeline, serving as the network operator responsible for natural gas transmission and generating
revenue from transmission activities.
Through the construction of the IGB gas pipeline, the country has been connected to the South gas corridor via the
Trans Adriatic Pipeline. This connection enables natural gas supplies from the Azeri Shah Deniz field, Phase 2 and
the Greek gas transmission system, which includes the operational re-gasification LNG terminal Revithoussa.
Additionally, the IGB pipeline facilitates gas imports from the Caspian region and the Middle East through the
functioning gas interconnection with Turkey (TGI).
The IGB gas pipeline has opened opportunities for long-term delivery of 1 billion m 3 /year to the Bulgarian market, as
agreed for a period of 25 years from Phase 2 of the Shah-Deniz field. It also allows for deliveries from the liquefied
natural gas (LNG) market through the existing re-gasification terminal Revithoussa in Greece and the planned new
FSRU terminal in Northern Greece near Alexandroupolis. The Bulgarian State, represented by Bulgartransgaz EAD,
participates in the construction of the new FSRU terminal and holds a shareholding in the project company Gastrade
S.A., following a decision by the Council of Ministers on 8 January 2022. This shareholding accounts for 20% of the
capital of Gastrade S.A.
The functioning of the gas pipeline provides the necessary infrastructure for Bulgaria and Greece to respond
effectively in times of crisis, such as potential interruptions in natural gas supplies from external sources. It also allows
for meeting seasonal peaks in natural gas consumption during months with increased demand.
Annual Separate Activity Report
31 December 2022
8
The next table presents a summarized financial information based on the financial accounts of the associated and joint
ventures of the Company as of 31 December 2022.
31 December 2022 Total
assets
Total
liabilities
Revenue Net
profit/(los
s)
BGN’000 BGN’000 BGN’000 BGN’000
ICGB AD 535,277 427,730 18,618 5,042
South Streаm Bulgaria AD ( unaudited data) 20,807 181 - (300)
ZAD Energy 43,417 15,389 13,805 9,230
599,501 443,300 32,423 13,972
Joint venture ICGB AD
BEH EAD is a shareholder in ICGB AD – a company with an equal interest of BEH EAD and IGI Poseidon (a
company with an equal interest of DEPA S.A. and Edison SpA), registered in 2011 in the Republic of Bulgaria,
intended to build and become an owner and operator of a gas interconnection network IGB. In 2022, ICGB AD built
the gas interconnector between Greece-Bulgaria with a capacity of up to 3 billion m 3 per year from Komotini to Stara
Zagora with a length of 182 km.
Joint Venture South Stream Bulgaria AD
The South Stream project, whose realization was terminated, covered the construction of a new gas system for natural
gas transportation from Russia to the European market through Bulgaria, with a technical capacity of the 900 km
Black Sea section of 63 billion m 3 per year. Shareholders with equal interest in the joint venture on Bulgarian territory
(which does not operate anymore) are Bulgarian Energy Holding EAD and Gazprom Krasnodar.
2. Main results for 2022
2.1. Strategic projects
Interconnection Greece-Bulgaria (IGB)
The Interconnection Greece-Bulgaria (IGB) was put in commercial operation on 1 October 2022, when a reverse gas
pipeline was put into operation with a capacity up to 3 billion m 3 per, running from Komotini to Stara Zagora, with a
length of 182 km, 152 km of which on Bulgarian territory.
The project was realized by ICGB AD, with equal participation from BEH EAD and IGI Poseidon. ICGB AD built
and now owns the gas pipeline, serving as the network operator responsible for natural gas transmission and generating
revenue from transmission activities.
Through the construction of the IGB gas pipeline, the country has been connected to the South gas corridor via the
Trans Adriatic Pipeline. This connection enables natural gas supplies from the Azeri Shah Deniz field, Phase 2 and
the Greek gas transmission system, which includes the operational re-gasification LNG terminal Revithoussa.
Additionally, the IGB pipeline facilitates gas imports from the Caspian region and the Middle East through the
functioning gas interconnection with Turkey (TGI).
The IGB gas pipeline has opened opportunities for long-term delivery of 1 billion m 3 /year to the Bulgarian market, as
agreed for a period of 25 years from Phase 2 of the Shah-Deniz field. It also allows for deliveries from the liquefied
natural gas (LNG) market through the existing re-gasification terminal Revithoussa in Greece and the planned new
FSRU terminal in Northern Greece near Alexandroupolis. The Bulgarian State, represented by Bulgartransgaz EAD,
participates in the construction of the new FSRU terminal and holds a shareholding in the project company Gastrade
S.A., following a decision by the Council of Ministers on 8 January 2022. This shareholding accounts for 20% of the
capital of Gastrade S.A.
The functioning of the gas pipeline provides the necessary infrastructure for Bulgaria and Greece to respond
effectively in times of crisis, such as potential interruptions in natural gas supplies from external sources. It also allows
for meeting seasonal peaks in natural gas consumption during months with increased demand.
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
9
Main activities in 2022
In 2022, was completed the construction of the interconnection, as:
• In the first half of 2022, various finishing works were carried out for the interconnection project. These
included laying protective pipes for the main optical line and the optical line itself, performing crossings,
connecting sections after conducting hydraulic tests, delivering and installing crane assemblies, as well as
building two gas measuring stations.
• Grant funding from the European Energy Programme for Recovery (EEPR) and OPIC was utilized, with
grant funds transferred to the project company.
• From January 2021 to March 2022, preparations were made for the certification of the project company as
an Independent Transmission Operator in Bulgaria and Greece. This involved agreeing upon a new Statute
of the project company and basic principles of a new Shareholder Agreement by the shareholders. The
company also prepared a Compliance Programme for approval by regulators, aiming to confirm functional
separation and implement measures for independent operation of the shareholders.
• In May 2022, the regulatory bodies of Bulgaria and Greece issued a decision certifying ICGB AD as a
transmission operator in accordance with Directive 2009/73 and the Energy Act.
• During the third quarter of 2022, the decision of the regulatory bodies was confirmed by the EC, and a new
two-tier management system based on the new Articles of Association, comprising a Management and
Supervisory Board for the future transmission operator, was implemented in mid-August 2022.
• On 29 September 2022, the forth final tranche of the loan financing, provided by the EIB, amounting to EUR
19 million, was utilized.
• In the third quarter of 2022, Act 14 was obtained for the Bulgarian territory, followed by Act 15, Act 16, and
a permit for use in the fourth quarter. Additionally, an acceptance act for the Greek territory was obtained.
• Due to the urgent need for the interconnection to be put into commercial operation in 2022, enabling Bulgaria
to receive the entire volume of Azeri gas at the agreed price, the Ministry of Regional Development and
Public Works, through Order No. РС-54 dated August 19, 2022, allowed the project to be implemented in
stages. As a result, the Interconnector Greece-Bulgaria (IGB) commenced commercial operation on 1
October 2022. The IGB transmits 1 billion m 3 of Azeri gas, which is more than one-third of the country's
consumption, under a 25-year contract. The gas pipeline is connected to the Bulgarian gas transmission
system, owned by Bulgartransgaz ЕАD, as well as the Trans -Adriatic gas pipeline and the Greek gas
transmission system owned by DESFA.
• After the gas pipeline was put into commercial operation in October 2022, the remaining stages of the project
continued to be implemented in accordance with the Order of the MRDPW No. РС -54 dated 19 August 2022.
These stages include the "spare main cable line" and "anti-erosion activities along the gas pipeline route," as
well as the "service departmental road to a technological site - Gas Metering Station near Stara Zagora."
Completion of any remaining activities in 2023
• In 2023, the three remaining stages will be completed: the "spare main cable line" stage, the "anti-erosion
activities along the gas pipeline route" stage, and the "service departmental road to a technological site - Gas
Metering Station near Stara Zagora" stage.
• In compliance with the issued Decision of the regulatory bodies EWRC and RAE, an exception will be
provided in 2023 and onwards, allowing for annual tenders to be held for the distribution of transmission
capacity. These tenders will follow the rules of Commission Regulation 459/2017, which establishes a
network code on capacity allocation mechanisms in gas transmission systems. The capacity tenders will be
conducted during each gas year in collaboration with neighboring gas transmission system operators, aiming
to attract additional gas pipeline users. In the event of high demand, the transmission gas pipeline capacity
may be increased up to 5 billion m 3 annually, as there are options for such an expansion even without the
construction of a compressor station.
Annual Separate Activity Report
31 December 2022
9
Main activities in 2022
In 2022, was completed the construction of the interconnection, as:
• In the first half of 2022, various finishing works were carried out for the interconnection project. These
included laying protective pipes for the main optical line and the optical line itself, performing crossings,
connecting sections after conducting hydraulic tests, delivering and installing crane assemblies, as well as
building two gas measuring stations.
• Grant funding from the European Energy Programme for Recovery (EEPR) and OPIC was utilized, with
grant funds transferred to the project company.
• From January 2021 to March 2022, preparations were made for the certification of the project company as
an Independent Transmission Operator in Bulgaria and Greece. This involved agreeing upon a new Statute
of the project company and basic principles of a new Shareholder Agreement by the shareholders. The
company also prepared a Compliance Programme for approval by regulators, aiming to confirm functional
separation and implement measures for independent operation of the shareholders.
• In May 2022, the regulatory bodies of Bulgaria and Greece issued a decision certifying ICGB AD as a
transmission operator in accordance with Directive 2009/73 and the Energy Act.
• During the third quarter of 2022, the decision of the regulatory bodies was confirmed by the EC, and a new
two-tier management system based on the new Articles of Association, comprising a Management and
Supervisory Board for the future transmission operator, was implemented in mid-August 2022.
• On 29 September 2022, the forth final tranche of the loan financing, provided by the EIB, amounting to EUR
19 million, was utilized.
• In the third quarter of 2022, Act 14 was obtained for the Bulgarian territory, followed by Act 15, Act 16, and
a permit for use in the fourth quarter. Additionally, an acceptance act for the Greek territory was obtained.
• Due to the urgent need for the interconnection to be put into commercial operation in 2022, enabling Bulgaria
to receive the entire volume of Azeri gas at the agreed price, the Ministry of Regional Development and
Public Works, through Order No. РС-54 dated August 19, 2022, allowed the project to be implemented in
stages. As a result, the Interconnector Greece-Bulgaria (IGB) commenced commercial operation on 1
October 2022. The IGB transmits 1 billion m 3 of Azeri gas, which is more than one-third of the country's
consumption, under a 25-year contract. The gas pipeline is connected to the Bulgarian gas transmission
system, owned by Bulgartransgaz ЕАD, as well as the Trans -Adriatic gas pipeline and the Greek gas
transmission system owned by DESFA.
• After the gas pipeline was put into commercial operation in October 2022, the remaining stages of the project
continued to be implemented in accordance with the Order of the MRDPW No. РС -54 dated 19 August 2022.
These stages include the "spare main cable line" and "anti-erosion activities along the gas pipeline route," as
well as the "service departmental road to a technological site - Gas Metering Station near Stara Zagora."
Completion of any remaining activities in 2023
• In 2023, the three remaining stages will be completed: the "spare main cable line" stage, the "anti-erosion
activities along the gas pipeline route" stage, and the "service departmental road to a technological site - Gas
Metering Station near Stara Zagora" stage.
• In compliance with the issued Decision of the regulatory bodies EWRC and RAE, an exception will be
provided in 2023 and onwards, allowing for annual tenders to be held for the distribution of transmission
capacity. These tenders will follow the rules of Commission Regulation 459/2017, which establishes a
network code on capacity allocation mechanisms in gas transmission systems. The capacity tenders will be
conducted during each gas year in collaboration with neighboring gas transmission system operators, aiming
to attract additional gas pipeline users. In the event of high demand, the transmission gas pipeline capacity
may be increased up to 5 billion m 3 annually, as there are options for such an expansion even without the
construction of a compressor station.
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
10
South Stream Project
Due to the termination of the South Stream Project, the activity of the project company South Stream Bulgaria AD
has been reduced to an absolute minimum.
The decision on the liquidation of the project company and its deletion from the Commercial Register is to be assessed.
In the liquidation process, if such a decision is made, the other assets - land properties should be liquidated.
2.2. Financial results for 2022
Bulgarian Energy Holding EAD operates as a financial holding company and the companies within its structure retain
their operational independence. The Company is the largest state-owned enterprise in Bulgaria in terms of total assets
and generated annual turnover. This allows the holding to achieve economies of scale by applying effective
management practices in the financial management of the group of companies. Through its participation in the capital
markets, BEH EAD managed to provide external financing to the group at competitive interest rates and the attracted
funds are used for the financial stabilization of the companies within the group and to implement projects of strategic
importance for the future development of the energy sector in Bulgaria.
As a financial holding company, the main revenues that the Company realizes are income from dividends, interest
income received on loans granted and revenues related to the services provided for the management of the subsidiaries
through the concluded holding agreements. The services provided to the subsidiaries are in the areas of financial
management, project management, corporate governance and business planning, legal and regulatory issues, public
relations and communication. These activities ensure the implementation of a unified approach within the group
regarding the future development of the energy companies, which is in line with the directions set out in the Energy
Strategy of Bulgaria. The values of the main financial indicators characterizing the activity of the company for 2022
and their change compared to 2021 are presented in the table below:
Financial results 31 December
2022
31 December
2021 Change 2022/2021
BGN’000 BGN’000 BGN’000 %
Revenue from operating activity 1,022,254 766,770 255,484 33.33%
Operating costs (excluding depreciation,
impairment and financial income/expense-
net)
(13,598) (9,221) (4,377) (47.47%)
EBITDA 1,008,656 757,549 251,107 33.15%
EBIT (128,134) 230,036 (358,170) (155.70%)
Earnings before tax (EBT) 533,540 271,877 261,663 96.24%
Net profit 582,061 320,828 261,233 81.42%
EBITDA margin 98.67% 98.80% - (0.13%)
Return on equity 12.98% 7.84% - 65.59%
Return on assets 7.86% 4.74% - 65.86%
Registered number of staff 94 80 14 17.50%
Financial position 31 December
2022
31 December
2021 Change 2022/2021
BGN’000 BGN’000 BGN’000 %
Total assets 7,403,641 6,768,391 635,250 9.39%
Working capital 2,497,270 1,050,136 1,447,134 137.80%
Equity 4,484,089 4,092,604 391,485 9.57%
Cash 2,289,617 730,011 1,559,606 213.64%
The primary factor directly affecting the revenue amount of BEH EAD is the financial situation of its subsidiaries.
This is because the dividends received by BEH EAD from its subsidiaries are determined based on the net financial
results reported by the subsidiaries from their operations. In 2022, the reported revenue from dividends and co-interests
(including default interests) amounted to BGN 1,019,414 thousand, compared to BGN 762,748 thousand in 2021. The
Annual Separate Activity Report
31 December 2022
10
South Stream Project
Due to the termination of the South Stream Project, the activity of the project company South Stream Bulgaria AD
has been reduced to an absolute minimum.
The decision on the liquidation of the project company and its deletion from the Commercial Register is to be assessed.
In the liquidation process, if such a decision is made, the other assets - land properties should be liquidated.
2.2. Financial results for 2022
Bulgarian Energy Holding EAD operates as a financial holding company and the companies within its structure retain
their operational independence. The Company is the largest state-owned enterprise in Bulgaria in terms of total assets
and generated annual turnover. This allows the holding to achieve economies of scale by applying effective
management practices in the financial management of the group of companies. Through its participation in the capital
markets, BEH EAD managed to provide external financing to the group at competitive interest rates and the attracted
funds are used for the financial stabilization of the companies within the group and to implement projects of strategic
importance for the future development of the energy sector in Bulgaria.
As a financial holding company, the main revenues that the Company realizes are income from dividends, interest
income received on loans granted and revenues related to the services provided for the management of the subsidiaries
through the concluded holding agreements. The services provided to the subsidiaries are in the areas of financial
management, project management, corporate governance and business planning, legal and regulatory issues, public
relations and communication. These activities ensure the implementation of a unified approach within the group
regarding the future development of the energy companies, which is in line with the directions set out in the Energy
Strategy of Bulgaria. The values of the main financial indicators characterizing the activity of the company for 2022
and their change compared to 2021 are presented in the table below:
Financial results 31 December
2022
31 December
2021 Change 2022/2021
BGN’000 BGN’000 BGN’000 %
Revenue from operating activity 1,022,254 766,770 255,484 33.33%
Operating costs (excluding depreciation,
impairment and financial income/expense-
net)
(13,598) (9,221) (4,377) (47.47%)
EBITDA 1,008,656 757,549 251,107 33.15%
EBIT (128,134) 230,036 (358,170) (155.70%)
Earnings before tax (EBT) 533,540 271,877 261,663 96.24%
Net profit 582,061 320,828 261,233 81.42%
EBITDA margin 98.67% 98.80% - (0.13%)
Return on equity 12.98% 7.84% - 65.59%
Return on assets 7.86% 4.74% - 65.86%
Registered number of staff 94 80 14 17.50%
Financial position 31 December
2022
31 December
2021 Change 2022/2021
BGN’000 BGN’000 BGN’000 %
Total assets 7,403,641 6,768,391 635,250 9.39%
Working capital 2,497,270 1,050,136 1,447,134 137.80%
Equity 4,484,089 4,092,604 391,485 9.57%
Cash 2,289,617 730,011 1,559,606 213.64%
The primary factor directly affecting the revenue amount of BEH EAD is the financial situation of its subsidiaries.
This is because the dividends received by BEH EAD from its subsidiaries are determined based on the net financial
results reported by the subsidiaries from their operations. In 2022, the reported revenue from dividends and co-interests
(including default interests) amounted to BGN 1,019,414 thousand, compared to BGN 762,748 thousand in 2021. The
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
11
majority of these revenues are derived from dividends received from NPP Kozloduy EAD, totaling BGN 890,304
thousand. Additionally, revenues from dividends from ESO EAD and Bulgargaz EAD amounted to BGN 71,514
thousand and BGN 57,515 thousand, respectively.
In 2022, according to Ordinance No. 5 of the Council of Ministers dated 27 April 2022, for the establishment and
payment in favor of the State of deductions from the profits of state-owned enterprises and companies with an equity
with state participation, dividend deductions were established at the amount of 100% of the net profit of state-owned
enterprises and companies with state participation, after deducting uncovered losses from previous years and
deductions for the Reserve Fund. This represents an increase compared to the previous rate set at 50% of the net profits
of commercial companies with state participation in the capital.
Regarding earnings before interest, taxes, depreciation, and amortization (EBITDA), the reported result in 2022 was
BGN 1,008,656 thousand, which is BGN 251,107 thousand higher than the reported EBITDA of BGN 757,549
thousand in 2021.
In 2022, BEH EAD recorded a negative operational financial result from its activities (EBIT) amounting to BGN
128,134 thousand. This represents a decrease of BGN 358,170 thousand compared to the EBIT reported in 2021,
which amounted to BGN 230,036 thousand. The decrease can be attributed to the reported expenditures in 2022 under
the category of Impairment costs, totaling BGN 1,136,343 thousand. This was primarily due to the recorded
impairment of receivables from loans granted, primarily to Bulgargaz EAD. In comparison, the impairment costs in
2021 amounted to BGN 527,058 thousand.
At the level of earnings before taxes, the reported result in 2022 was BGN 533,540 thousand, which is higher by BGN
261,663 thousand compared to the reported profit of BGN 271,877 thousand in 2021. This result is influenced by the
reported financial income in 2022, amounting to BGN 742,221 thousand, which was BGN 525,924 thousand higher
than the income reported in 2021 (BGN 216,297 thousand). A major part of the financial revenues resulted from the
early repayment of obligations under loans between related parties (initially established as financial assets subject to
credit impairment as per IFRS 9). The company also generates revenues from interest on loans granted to its
subsidiaries.
The working capital of BEH EAD for 2022 amounts to BGN 2,497,270 thousand, representing an increase of BGN
1,447,134 thousand compared to 2021. This significant increase is primarily due to the higher cash in 2022.
The reported operational costs amount to BGN 13,598 thousand, showing an increase of BGN 4,377 thousand
compared to the reported costs in 2021 (BGN 9,221 thousand). The main increase in costs is attributed to staff
expenses and consultancy services.
In line with the adopted policy for purchasing greenhouse gas emissions allowances, BEH EAD entered into a contract
in July 2021 with TPP Maritsa East 2 EAD as the buyer. As per the contract, BEH EAD is responsible for buying
EUA-type greenhouse gas emissions allowances to support the production activities of TPP Maritsa East 2 EAD in
2021 and 2022. BEH EAD purchases the allowances upon receiving an order from TPP Maritsa East 2 EAD and
transfers the purchased allowances to the buyer's account after full payment is made. The goal of this strategy is to
optimize the costs associated with carbon emissions by implementing a competitive principle in the purchasing
process, thereby reducing brokerage commissions. By buying the necessary emission allowances, the costs can be
fully included in the price of the electricity sold by TPP Maritsa East 2 EAD, effectively hedging against the risk of
increasing emission prices."
Regarding the administrative costs, the management's efforts are aimed at optimizing them through the
implementation of good managerial practices and approaches that ensure the efficient utilization of available
resources.
In 2022, the reported financial costs of the company amounted to BGN 80,547 thousand, representing a change of
BGN 93,909 thousand compared to 2021 (BGN 174,456 thousand). The financial costs mainly include the interest
charges on BEH EAD's bond issuances and the costs associated with a loan received from NPP Kozloduy EAD on 5
July 2022. The loan, amounting to BGN 37,864,950, was obtained to finance additional obligations assigned to
Bulgartransgaz ЕАD in service of the society, as per orders by the Minister of Energy. The decrease in financial costs
in 2022 is attributed to the costs reported in 2021 related to the discounting of non-current receivables from associated
parties.
Annual Separate Activity Report
31 December 2022
11
majority of these revenues are derived from dividends received from NPP Kozloduy EAD, totaling BGN 890,304
thousand. Additionally, revenues from dividends from ESO EAD and Bulgargaz EAD amounted to BGN 71,514
thousand and BGN 57,515 thousand, respectively.
In 2022, according to Ordinance No. 5 of the Council of Ministers dated 27 April 2022, for the establishment and
payment in favor of the State of deductions from the profits of state-owned enterprises and companies with an equity
with state participation, dividend deductions were established at the amount of 100% of the net profit of state-owned
enterprises and companies with state participation, after deducting uncovered losses from previous years and
deductions for the Reserve Fund. This represents an increase compared to the previous rate set at 50% of the net profits
of commercial companies with state participation in the capital.
Regarding earnings before interest, taxes, depreciation, and amortization (EBITDA), the reported result in 2022 was
BGN 1,008,656 thousand, which is BGN 251,107 thousand higher than the reported EBITDA of BGN 757,549
thousand in 2021.
In 2022, BEH EAD recorded a negative operational financial result from its activities (EBIT) amounting to BGN
128,134 thousand. This represents a decrease of BGN 358,170 thousand compared to the EBIT reported in 2021,
which amounted to BGN 230,036 thousand. The decrease can be attributed to the reported expenditures in 2022 under
the category of Impairment costs, totaling BGN 1,136,343 thousand. This was primarily due to the recorded
impairment of receivables from loans granted, primarily to Bulgargaz EAD. In comparison, the impairment costs in
2021 amounted to BGN 527,058 thousand.
At the level of earnings before taxes, the reported result in 2022 was BGN 533,540 thousand, which is higher by BGN
261,663 thousand compared to the reported profit of BGN 271,877 thousand in 2021. This result is influenced by the
reported financial income in 2022, amounting to BGN 742,221 thousand, which was BGN 525,924 thousand higher
than the income reported in 2021 (BGN 216,297 thousand). A major part of the financial revenues resulted from the
early repayment of obligations under loans between related parties (initially established as financial assets subject to
credit impairment as per IFRS 9). The company also generates revenues from interest on loans granted to its
subsidiaries.
The working capital of BEH EAD for 2022 amounts to BGN 2,497,270 thousand, representing an increase of BGN
1,447,134 thousand compared to 2021. This significant increase is primarily due to the higher cash in 2022.
The reported operational costs amount to BGN 13,598 thousand, showing an increase of BGN 4,377 thousand
compared to the reported costs in 2021 (BGN 9,221 thousand). The main increase in costs is attributed to staff
expenses and consultancy services.
In line with the adopted policy for purchasing greenhouse gas emissions allowances, BEH EAD entered into a contract
in July 2021 with TPP Maritsa East 2 EAD as the buyer. As per the contract, BEH EAD is responsible for buying
EUA-type greenhouse gas emissions allowances to support the production activities of TPP Maritsa East 2 EAD in
2021 and 2022. BEH EAD purchases the allowances upon receiving an order from TPP Maritsa East 2 EAD and
transfers the purchased allowances to the buyer's account after full payment is made. The goal of this strategy is to
optimize the costs associated with carbon emissions by implementing a competitive principle in the purchasing
process, thereby reducing brokerage commissions. By buying the necessary emission allowances, the costs can be
fully included in the price of the electricity sold by TPP Maritsa East 2 EAD, effectively hedging against the risk of
increasing emission prices."
Regarding the administrative costs, the management's efforts are aimed at optimizing them through the
implementation of good managerial practices and approaches that ensure the efficient utilization of available
resources.
In 2022, the reported financial costs of the company amounted to BGN 80,547 thousand, representing a change of
BGN 93,909 thousand compared to 2021 (BGN 174,456 thousand). The financial costs mainly include the interest
charges on BEH EAD's bond issuances and the costs associated with a loan received from NPP Kozloduy EAD on 5
July 2022. The loan, amounting to BGN 37,864,950, was obtained to finance additional obligations assigned to
Bulgartransgaz ЕАD in service of the society, as per orders by the Minister of Energy. The decrease in financial costs
in 2022 is attributed to the costs reported in 2021 related to the discounting of non-current receivables from associated
parties.
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
12
The Russia-Ukraine war
The Company has no investments or outstanding balances with clients or suppliers from Russia or Ukraine and due
to the nature of its business, namely holding activities, related to investment management and rendering of services,
as well as due to the lack of dependence on raw materials and other supplies, the management’s assessment is that
there are no circumstances and factors, which may question the validity of the going concern principle or which have
a direct and adverse effect on the activity of the Company as a result of the military conflict between Ukraine and
Russia in 2022.
Meanwhile, the increased costs of raw materials and energy sources have led to significant inflation in the eurozone
and the USA. As a result, the Federal Reserve of the USA, the European Central Bank, and the Bulgarian National
Bank have raised their interest rates multiple times in an attempt to address the rising consumer prices. Although the
Company does not have significant interest-bearing loans with floating interest rates, it is possible for future interest
costs on loans to increase due to the rising interest rates.
In addition, some of the activities of the subsidiaries may be directly affected in the mid-term or long-term period in
relation to contracts for purchase of raw materials, supplies and equipment from Russian suppliers. Actions are being
taken to negotiate and sign contracts with alternative suppliers as well as to obtain derogations from the sanctions of
the European Union in relation to specific imports of certain spare parts, materials, and receipt of services.
Climate-related matters
In 2022, the Company presents information on climate-related matters, and considers such reporting as a long-term
commitment, which will be further developed and expanded in the future. The legislation, the regulatory bodies, the
partners of the Company and the users of non-financial information draw great attention to the climate change. The
European Union adopted the European Green Deal as a transition to more sustainable economic and financial system
and in the coming years, detailed requirements for reporting on climate change will be applicable as part of European
sustainability reporting standards. The Company is currently undergoing an analysis of its business and implemented
activities to assess their impact, identify potential risks, and explore ways to actively participate in decision-making
related to climate change. As of 31 December 2022, the Company has not identified any major risks caused by climate
change that could directly and significantly its financial statements. However, in the long-term context, climate change
could potentially affect the Company's investments and their profitability.
Ecological, Social and Governance Rating (ESG Rating);
For a public company actively participating in raising funds through the capital markets, such as Bulgarian Energy
Holding EAD, attracting investors’ interest is connected with a strict observance of the social, governance, and
ecological aspects of the activities within the frameworks of the holding. The ESG rating is awarded after thorough
analysis of the rules and policies of a particular company, related to the ecological, social, and governance aspects.
This assessment considers the overall impact and environmental footprint left by the company through its business
activities, as well as a comprehensive review of publicly available information from the corporate website, articles,
and news about the company. On 16 December 2021, BEH Group was assigned ESG rating of 34.2 points (“high
risk”). The rating was assigned by Sustainalytics – a company, part of the Morningstar structure, which is a globally
recognized supplier of ESG researches, ratings, and data. The corporate ESG assessment of Bulgarian Energy Holding
EAD is a one-time assessment that is valid at the time of assignment and is based on the information provided by
Bulgarian Energy Holding EAD. The ESG risk assessment report includes a general ESG risk rating, an assessment
of the Company's exposure, and an assessment of its governance. The exposition assessment measures the extent , to
which the Company is exposed to various material risks, related to the ecological, social, and governance aspects. The
management assessment shows how well the Company governs these aspects. The evaluation of the exposition of
BEH is 54.3 points (“medium risk”) and the evaluation of the management is 39.9 points (“average performance”).
As of 31 December 2022, there is no change in the assigned ESG rating.
Annual Separate Activity Report
31 December 2022
12
The Russia-Ukraine war
The Company has no investments or outstanding balances with clients or suppliers from Russia or Ukraine and due
to the nature of its business, namely holding activities, related to investment management and rendering of services,
as well as due to the lack of dependence on raw materials and other supplies, the management’s assessment is that
there are no circumstances and factors, which may question the validity of the going concern principle or which have
a direct and adverse effect on the activity of the Company as a result of the military conflict between Ukraine and
Russia in 2022.
Meanwhile, the increased costs of raw materials and energy sources have led to significant inflation in the eurozone
and the USA. As a result, the Federal Reserve of the USA, the European Central Bank, and the Bulgarian National
Bank have raised their interest rates multiple times in an attempt to address the rising consumer prices. Although the
Company does not have significant interest-bearing loans with floating interest rates, it is possible for future interest
costs on loans to increase due to the rising interest rates.
In addition, some of the activities of the subsidiaries may be directly affected in the mid-term or long-term period in
relation to contracts for purchase of raw materials, supplies and equipment from Russian suppliers. Actions are being
taken to negotiate and sign contracts with alternative suppliers as well as to obtain derogations from the sanctions of
the European Union in relation to specific imports of certain spare parts, materials, and receipt of services.
Climate-related matters
In 2022, the Company presents information on climate-related matters, and considers such reporting as a long-term
commitment, which will be further developed and expanded in the future. The legislation, the regulatory bodies, the
partners of the Company and the users of non-financial information draw great attention to the climate change. The
European Union adopted the European Green Deal as a transition to more sustainable economic and financial system
and in the coming years, detailed requirements for reporting on climate change will be applicable as part of European
sustainability reporting standards. The Company is currently undergoing an analysis of its business and implemented
activities to assess their impact, identify potential risks, and explore ways to actively participate in decision-making
related to climate change. As of 31 December 2022, the Company has not identified any major risks caused by climate
change that could directly and significantly its financial statements. However, in the long-term context, climate change
could potentially affect the Company's investments and their profitability.
Ecological, Social and Governance Rating (ESG Rating);
For a public company actively participating in raising funds through the capital markets, such as Bulgarian Energy
Holding EAD, attracting investors’ interest is connected with a strict observance of the social, governance, and
ecological aspects of the activities within the frameworks of the holding. The ESG rating is awarded after thorough
analysis of the rules and policies of a particular company, related to the ecological, social, and governance aspects.
This assessment considers the overall impact and environmental footprint left by the company through its business
activities, as well as a comprehensive review of publicly available information from the corporate website, articles,
and news about the company. On 16 December 2021, BEH Group was assigned ESG rating of 34.2 points (“high
risk”). The rating was assigned by Sustainalytics – a company, part of the Morningstar structure, which is a globally
recognized supplier of ESG researches, ratings, and data. The corporate ESG assessment of Bulgarian Energy Holding
EAD is a one-time assessment that is valid at the time of assignment and is based on the information provided by
Bulgarian Energy Holding EAD. The ESG risk assessment report includes a general ESG risk rating, an assessment
of the Company's exposure, and an assessment of its governance. The exposition assessment measures the extent , to
which the Company is exposed to various material risks, related to the ecological, social, and governance aspects. The
management assessment shows how well the Company governs these aspects. The evaluation of the exposition of
BEH is 54.3 points (“medium risk”) and the evaluation of the management is 39.9 points (“average performance”).
As of 31 December 2022, there is no change in the assigned ESG rating.
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
13
Going concern principle
Т aking into consideration the aforementioned circumstances, the management has made assessment on the ability of
the Company to continue operating as a going concern in a foreseeable future and it has found that the principle –
assumption of a going concern is applicable in the course of preparation of the separate financial statements. The
assessment takes into account available information about the foreseeable future, including the military conflict
between the Russian Federation and the Republic of Ukraine, the Bulgarian Recovery and Resilience Plan approved
by the EU, the unstable macro-economic situation, and the dynamics of the energy market worldwide and in Bulgaria.
Following the review of the Company’s operations, the Board of Directors expects t hat the Company has sufficient
financial resources to sustain its operations in the near future and will continue to apply the going concern principle
upon the preparation of the Separate Financial Statements.
2.3. External debt
The attracted external financial resource of BEH EAD as of 31.12.2022 includes two bonds issued in 2018 and 2021.
In addition to the two bond issues mentioned above, BEH EAD has repaid in full the following bond issues:
- Eurobonds, issued in 2013 with a nominal value of EUR 500 million and an annual interest rate 4.25%, repaid
on the maturity date – 7 November 2018.
- Eurobonds, issued in 2016 with a nominal value of EUR 550 million and an annual interest rate 4.875%,
repaid on the maturity date – 2 August 2021.
Bond issue 2016
On 2 August 2016, Bulgarian Energy Holding EAD successfully placed its second issue of Eurobonds of EUR 550
million. Due to high investor demand,, the issue was oversubscribed to over EUR 2 billion. The key parameters of the
second bond issue of Bulgarian Energy Holding EAD are as follows:
- the amount of the bond issue (nominal value) – EUR 550 million;
- issue value – 98.921%;
- fixed interest rate of 4.875% annually;
- the interest is payable once a year on 2nd August with the first payment due on 2 August 2017;
- maturity date – 2 August 2021;
- ISIN code XS1405778041 of the bond issue, which is admitted to trading on the Main Securities Market of the
Irish Stock Exchange.;
The proceeds from the bond issue were utilized to repay the bridge loan of EUR 535 million granted by Banca IMI
S.p.A., London Branch, Bank of China (Luxembourg) S.A. and J.P. Morgan Ltd. under an agreement signed on 21
April 2016.
On 30 July 2021, the principal obligation of BGN 1,075,707 thousand under the bond issue was repaid.
Bond issue 2018
On 28 June 2018, in conditions of highly volatile financial markets as a result of a number of negative news from the
international political scene, Bulgarian Energy Holding EAD successfully placed its third Eurobond issue of EUR 400
million on the Irish Stock Exchange. The Eurobond parameters are as follows:
- amount of the bond issue of EUR 400 million;
- maturity on 28 June 2025;
- a fixed interest rate of 3.5% annually;
- the interest is payable once a year on 28 th June with the first payment due on 28 June 2019;
- ISIN code XS1839682116 of the bond issue which is admitted to trading on the Main Securities Market of
on the Irish Stock Exchange (Euronext Dublin);
- BEH EAD should observe certain covenants as follows:
• For as long as any Bond remains outstanding, the Issuer shall not, and shall not permit any of its Material
Subsidiaries to, directly or indirectly incur any Financial Indebtedness, provided, however, that the
Issuer and any Material Subsidiary may incur Financial Indebtedness, if, after giving effect to the
occurrence of such Financial Indebtedness and the receipt and application of the proceeds therefrom:
(1) no Event of Default has or would have occurred and is or would be continuing; (2) the EBITDA
Coverage Ratio would be not less than 4.0 to 1.0; and (3) the Consolidated Leverage Ratio would not
be more than 4.5 to 1.0.
• For so long as any Bond remains outstanding, in the event that NEK EAD is declared by a Bulgarian
court to be over-indebted within the meaning of the Bulgarian Commerce Act, then the Issuer shall not,
Annual Separate Activity Report
31 December 2022
13
Going concern principle
Т aking into consideration the aforementioned circumstances, the management has made assessment on the ability of
the Company to continue operating as a going concern in a foreseeable future and it has found that the principle –
assumption of a going concern is applicable in the course of preparation of the separate financial statements. The
assessment takes into account available information about the foreseeable future, including the military conflict
between the Russian Federation and the Republic of Ukraine, the Bulgarian Recovery and Resilience Plan approved
by the EU, the unstable macro-economic situation, and the dynamics of the energy market worldwide and in Bulgaria.
Following the review of the Company’s operations, the Board of Directors expects t hat the Company has sufficient
financial resources to sustain its operations in the near future and will continue to apply the going concern principle
upon the preparation of the Separate Financial Statements.
2.3. External debt
The attracted external financial resource of BEH EAD as of 31.12.2022 includes two bonds issued in 2018 and 2021.
In addition to the two bond issues mentioned above, BEH EAD has repaid in full the following bond issues:
- Eurobonds, issued in 2013 with a nominal value of EUR 500 million and an annual interest rate 4.25%, repaid
on the maturity date – 7 November 2018.
- Eurobonds, issued in 2016 with a nominal value of EUR 550 million and an annual interest rate 4.875%,
repaid on the maturity date – 2 August 2021.
Bond issue 2016
On 2 August 2016, Bulgarian Energy Holding EAD successfully placed its second issue of Eurobonds of EUR 550
million. Due to high investor demand,, the issue was oversubscribed to over EUR 2 billion. The key parameters of the
second bond issue of Bulgarian Energy Holding EAD are as follows:
- the amount of the bond issue (nominal value) – EUR 550 million;
- issue value – 98.921%;
- fixed interest rate of 4.875% annually;
- the interest is payable once a year on 2nd August with the first payment due on 2 August 2017;
- maturity date – 2 August 2021;
- ISIN code XS1405778041 of the bond issue, which is admitted to trading on the Main Securities Market of the
Irish Stock Exchange.;
The proceeds from the bond issue were utilized to repay the bridge loan of EUR 535 million granted by Banca IMI
S.p.A., London Branch, Bank of China (Luxembourg) S.A. and J.P. Morgan Ltd. under an agreement signed on 21
April 2016.
On 30 July 2021, the principal obligation of BGN 1,075,707 thousand under the bond issue was repaid.
Bond issue 2018
On 28 June 2018, in conditions of highly volatile financial markets as a result of a number of negative news from the
international political scene, Bulgarian Energy Holding EAD successfully placed its third Eurobond issue of EUR 400
million on the Irish Stock Exchange. The Eurobond parameters are as follows:
- amount of the bond issue of EUR 400 million;
- maturity on 28 June 2025;
- a fixed interest rate of 3.5% annually;
- the interest is payable once a year on 28 th June with the first payment due on 28 June 2019;
- ISIN code XS1839682116 of the bond issue which is admitted to trading on the Main Securities Market of
on the Irish Stock Exchange (Euronext Dublin);
- BEH EAD should observe certain covenants as follows:
• For as long as any Bond remains outstanding, the Issuer shall not, and shall not permit any of its Material
Subsidiaries to, directly or indirectly incur any Financial Indebtedness, provided, however, that the
Issuer and any Material Subsidiary may incur Financial Indebtedness, if, after giving effect to the
occurrence of such Financial Indebtedness and the receipt and application of the proceeds therefrom:
(1) no Event of Default has or would have occurred and is or would be continuing; (2) the EBITDA
Coverage Ratio would be not less than 4.0 to 1.0; and (3) the Consolidated Leverage Ratio would not
be more than 4.5 to 1.0.
• For so long as any Bond remains outstanding, in the event that NEK EAD is declared by a Bulgarian
court to be over-indebted within the meaning of the Bulgarian Commerce Act, then the Issuer shall not,
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
14
and shall not permit (to the extent permitted by law) any of its larger subsidiaries to, directly or indirectly
incur any financial indebtedness.
On 31 July 2018, Bulgarian Energy Holding EAD successfully increased its third Eurobond issue, listed on the Irish
Stock Exchange (Euronext Dublin), from EUR 400 million to EUR 550 million.
On 12 October 2018, Bulgarian Energy Holding EAD recorded a second increase of its third Eurobond issue, listed
on the Irish Stock Exchange (Euronext Dublin), from EUR 550 million to EUR 600 million.
The proceeds from the issue are intended for general corporate purposes and refinancing of Eurobonds issued by the
company in 2013, maturing in November 2018.
On 27 June 2019, the first interest payment was made, on 24 June 2020, – second interest payment, on 25 June 2021
– third interest payment, and on 28 June 2022 – forth interest payment was made. The annual interest amounts to
EUR 21,000 thousand (BGN 41,072 thousand)
Bond issue 2021
On 15 July 2021, BEH successfully placed its fourth bond issue in the amount of EUR 600 million at an annual interest
rate of 2.45%. Due to the extremely strong interest from investors, the bond was oversubscribed 2.3 times, and the
interest rate achieved is the lowest since the company has started participating in the international financial markets.
The Eurobond parameters are as follows:
- amount of the bond issue of EUR 600 million;
- maturity on 22 July 2028;
- a fixed interest rate of 2.45% annually;
- the interest is payable once a year on 22 nd July, with the first payment due on 22 July 2022;
- ISIN code XS2367164576 of the bond issue quoted on the Irish Stock Exchange (Euronext Dublin);
- BEH EAD should comply with certain covenants as follows:
• As long as there are obligations under issued bonds, the Issuer will not and will not allow the larger
subsidiaries, directly or indirectly, to assume financial obligations unless the Issuer and one of the larger
subsidiaries may assume a financial obligation if, after assuming such a financial obligation and
receiving and applying the proceeds from it: (1) there is no or would not occur and does not continue or
would not continue a case of default; (2) the EBITDA coverage ratio is not less than 4.0 to 1.0; and (3)
The consolidated leverage ratio is no more than 4.5 to 1.0.
• As long as there are obligations under issued bonds, in case NEK EAD is declared by a Bulgarian court
to be over-indebted within the meaning of the Bulgarian Commerce Act, then the Issuer will not and
will not allow (as permitted by the law) its larger subsidiaries directly or indirectly, to incur financial
obligations.
The proceeds from the newly issued bonds were used to refinance the company's second bond issue with a face value
of EUR 550 million, placed in 2016, at an annual interest rate of 4.875%. The maturity date of the second bond issue
was 2 August 2021. The proceeds were also utilized for general corporate purposes, excluding coal-related activities.
On 31 July 2022, the first interest payment was made. The annual interest payable amounts to BGN 27,751 thousand.
(EUR 14,700 thousand).
2.4. Financial policy
In 2022, Bulgarian Energy Holding EAD implemented a financial policy to improve the financial position and manage
the liquidity of its subsidiaries through the following activities:
o Under a framework agreement for the sale and purchase of green gas emission allowances between BEH EAD
and TPP Maritsa East 2 EAD dated 16.07.2021, in 2022 BEH EAD purchased 13,223,260 tons of green gas
emissions in 2022. This was done to cover the company's obligations regarding the security of the production
activity of the power plant in 2022. The competitive prices of the electricity produced by TPP Maritsa East 2
EAD in 2022 allowed the power plant to currently pay for the green gas emission allowances provided by BEH
EAD under the framework agreement.
Annual Separate Activity Report
31 December 2022
14
and shall not permit (to the extent permitted by law) any of its larger subsidiaries to, directly or indirectly
incur any financial indebtedness.
On 31 July 2018, Bulgarian Energy Holding EAD successfully increased its third Eurobond issue, listed on the Irish
Stock Exchange (Euronext Dublin), from EUR 400 million to EUR 550 million.
On 12 October 2018, Bulgarian Energy Holding EAD recorded a second increase of its third Eurobond issue, listed
on the Irish Stock Exchange (Euronext Dublin), from EUR 550 million to EUR 600 million.
The proceeds from the issue are intended for general corporate purposes and refinancing of Eurobonds issued by the
company in 2013, maturing in November 2018.
On 27 June 2019, the first interest payment was made, on 24 June 2020, – second interest payment, on 25 June 2021
– third interest payment, and on 28 June 2022 – forth interest payment was made. The annual interest amounts to
EUR 21,000 thousand (BGN 41,072 thousand)
Bond issue 2021
On 15 July 2021, BEH successfully placed its fourth bond issue in the amount of EUR 600 million at an annual interest
rate of 2.45%. Due to the extremely strong interest from investors, the bond was oversubscribed 2.3 times, and the
interest rate achieved is the lowest since the company has started participating in the international financial markets.
The Eurobond parameters are as follows:
- amount of the bond issue of EUR 600 million;
- maturity on 22 July 2028;
- a fixed interest rate of 2.45% annually;
- the interest is payable once a year on 22 nd July, with the first payment due on 22 July 2022;
- ISIN code XS2367164576 of the bond issue quoted on the Irish Stock Exchange (Euronext Dublin);
- BEH EAD should comply with certain covenants as follows:
• As long as there are obligations under issued bonds, the Issuer will not and will not allow the larger
subsidiaries, directly or indirectly, to assume financial obligations unless the Issuer and one of the larger
subsidiaries may assume a financial obligation if, after assuming such a financial obligation and
receiving and applying the proceeds from it: (1) there is no or would not occur and does not continue or
would not continue a case of default; (2) the EBITDA coverage ratio is not less than 4.0 to 1.0; and (3)
The consolidated leverage ratio is no more than 4.5 to 1.0.
• As long as there are obligations under issued bonds, in case NEK EAD is declared by a Bulgarian court
to be over-indebted within the meaning of the Bulgarian Commerce Act, then the Issuer will not and
will not allow (as permitted by the law) its larger subsidiaries directly or indirectly, to incur financial
obligations.
The proceeds from the newly issued bonds were used to refinance the company's second bond issue with a face value
of EUR 550 million, placed in 2016, at an annual interest rate of 4.875%. The maturity date of the second bond issue
was 2 August 2021. The proceeds were also utilized for general corporate purposes, excluding coal-related activities.
On 31 July 2022, the first interest payment was made. The annual interest payable amounts to BGN 27,751 thousand.
(EUR 14,700 thousand).
2.4. Financial policy
In 2022, Bulgarian Energy Holding EAD implemented a financial policy to improve the financial position and manage
the liquidity of its subsidiaries through the following activities:
o Under a framework agreement for the sale and purchase of green gas emission allowances between BEH EAD
and TPP Maritsa East 2 EAD dated 16.07.2021, in 2022 BEH EAD purchased 13,223,260 tons of green gas
emissions in 2022. This was done to cover the company's obligations regarding the security of the production
activity of the power plant in 2022. The competitive prices of the electricity produced by TPP Maritsa East 2
EAD in 2022 allowed the power plant to currently pay for the green gas emission allowances provided by BEH
EAD under the framework agreement.
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
15
o To ensure the required liquidity for securing the operational activity of the companies within the corporate
structure the following were signed:
- Supplementary agreement No.1 of 8 February 2022 to the loan agreement between BEH EAD and
NEK EAD from 2014 was made to consolidate the old liabilities of NEK EAD to the holding. Due
to the payments made by NEK EAD for the period 17.09-05.10.2021 in the total amount of BGN
200 million, the additional agreement rescheduled the remaining loan obligation in the amount of
BGN 773,778 thousand with a repayment period of 28 July 2031.NoThe agreement became
effective on July 28, 2021.
- Supplementary agreement No.2 of February 8, 2022 was made to the contract for granting a targeted
loan between between BEH EAD and NEK EAD, which was signed in 2016 to repay overdue
amounts owed by NEK EAD to AES 3C Maritsa East 1 EOOD and ContourGlobal Maritsa East 3
AD.No.. The parties agreed on the following terms since 28 July 2021:
• The debtor has the right to make partial early repayment of the outstanding principal.
Following each early repayment, the parties will sign an updated repayment plan, taking
into account the reduced amount of the outstanding principal.
• The remaining principal amount of BGN 1,047,684 thousand will be rescheduled for
repayment by 28 July 2028.
- On 14 April 2022, a loan agreement in the amount of BGN 700,000 thousand was concluded
between BEH EAD and NEK EAD in connection with the decision of the Council of Ministers No.
142/10.03.2022. The term of the loan is thirty-three months with an annual interest rate of 2.44%
and a grace period for the principal payment of 12 months.
- Supplementary agreement No. 1, dated 30.08.2022, was made to Loan agreement No. 78-
2021/17671, dated 06.12.2021, between BEH EAD and TPP Maritsa East 2 EAD, with an amount
of BGN 1,048,161 thousand. The repayment term is until 30.06.2023, with a grace period until
31.07.2022.
- Supplementary agreement No. 2, dated 17.10.2022, was made to Loan agreement No. 78-
2021/17671, dated 06.12.2021, between BEH EAD and TPP Maritsa East 2 EAD, with an amount
of BGN 1,048,161 thousand. The agreement grants the debtor the right to make partial early
repayment of the outstanding principal. For each early repayment, the parties will sign an updated
repayment plan, considering the reduced amount of the outstanding principal.
o Considering the need to overcome the adverse effects of the complex geopolitical circumstances resulting from
the war actions in Ukraine, the imposed sanctions from the European Union, and the implemented retaliatory
sanctions from the Russian Federation (related to the natural gas agreements), new contracts and agreements were
signed under loan agreements as follows:
- Loan agreement No. 13, dated 25.02.2022, was concluded between BEH EAD and Bulgargaz EAD
to repay obligations for natural gas supply in the amount of BGN 200,000 thousand. The agreement
has an interest rate of 3.23% per annum on the utilized amount and an effective period of 12 months
from the date of signing.
- Loan agreement No. 56, dated 06.07.2022, was concluded between BEH EAD and Bulgargaz EAD
to repay obligations for natural gas supply in the amount of BGN 60,000 thousand. The agreement
has an interest rate of 3.23% per annum on the utilized amount and an effective period of 12 months
from the date of signing.
- On 21 December 2022, loan agreement No. 112 was concluded, providing funds to Bulgargaz EAD
in the amount of BGN 457,515 thousand. The funds were intended to cover the operational needs
of the subsidiary and to pay dividends from the profit of 2021, payable by the company. The
repayment term is twelve months following the utilization of the amount, and the principal will be
paid once at the end of the period. The loan carries an interest rate of 3.275% per annum.
- On 5 July 2022, an agreement was concluded to provide loan No. 54 to Bulgartransgaz EAD in the
amount of BGN 37,865 thousand. The loan was granted for the targeted purpose of financing further
assignments awarded to Bulgartransgaz EAD in service of the public, under orders from the Minister
Annual Separate Activity Report
31 December 2022
15
o To ensure the required liquidity for securing the operational activity of the companies within the corporate
structure the following were signed:
- Supplementary agreement No.1 of 8 February 2022 to the loan agreement between BEH EAD and
NEK EAD from 2014 was made to consolidate the old liabilities of NEK EAD to the holding. Due
to the payments made by NEK EAD for the period 17.09-05.10.2021 in the total amount of BGN
200 million, the additional agreement rescheduled the remaining loan obligation in the amount of
BGN 773,778 thousand with a repayment period of 28 July 2031.NoThe agreement became
effective on July 28, 2021.
- Supplementary agreement No.2 of February 8, 2022 was made to the contract for granting a targeted
loan between between BEH EAD and NEK EAD, which was signed in 2016 to repay overdue
amounts owed by NEK EAD to AES 3C Maritsa East 1 EOOD and ContourGlobal Maritsa East 3
AD.No.. The parties agreed on the following terms since 28 July 2021:
• The debtor has the right to make partial early repayment of the outstanding principal.
Following each early repayment, the parties will sign an updated repayment plan, taking
into account the reduced amount of the outstanding principal.
• The remaining principal amount of BGN 1,047,684 thousand will be rescheduled for
repayment by 28 July 2028.
- On 14 April 2022, a loan agreement in the amount of BGN 700,000 thousand was concluded
between BEH EAD and NEK EAD in connection with the decision of the Council of Ministers No.
142/10.03.2022. The term of the loan is thirty-three months with an annual interest rate of 2.44%
and a grace period for the principal payment of 12 months.
- Supplementary agreement No. 1, dated 30.08.2022, was made to Loan agreement No. 78-
2021/17671, dated 06.12.2021, between BEH EAD and TPP Maritsa East 2 EAD, with an amount
of BGN 1,048,161 thousand. The repayment term is until 30.06.2023, with a grace period until
31.07.2022.
- Supplementary agreement No. 2, dated 17.10.2022, was made to Loan agreement No. 78-
2021/17671, dated 06.12.2021, between BEH EAD and TPP Maritsa East 2 EAD, with an amount
of BGN 1,048,161 thousand. The agreement grants the debtor the right to make partial early
repayment of the outstanding principal. For each early repayment, the parties will sign an updated
repayment plan, considering the reduced amount of the outstanding principal.
o Considering the need to overcome the adverse effects of the complex geopolitical circumstances resulting from
the war actions in Ukraine, the imposed sanctions from the European Union, and the implemented retaliatory
sanctions from the Russian Federation (related to the natural gas agreements), new contracts and agreements were
signed under loan agreements as follows:
- Loan agreement No. 13, dated 25.02.2022, was concluded between BEH EAD and Bulgargaz EAD
to repay obligations for natural gas supply in the amount of BGN 200,000 thousand. The agreement
has an interest rate of 3.23% per annum on the utilized amount and an effective period of 12 months
from the date of signing.
- Loan agreement No. 56, dated 06.07.2022, was concluded between BEH EAD and Bulgargaz EAD
to repay obligations for natural gas supply in the amount of BGN 60,000 thousand. The agreement
has an interest rate of 3.23% per annum on the utilized amount and an effective period of 12 months
from the date of signing.
- On 21 December 2022, loan agreement No. 112 was concluded, providing funds to Bulgargaz EAD
in the amount of BGN 457,515 thousand. The funds were intended to cover the operational needs
of the subsidiary and to pay dividends from the profit of 2021, payable by the company. The
repayment term is twelve months following the utilization of the amount, and the principal will be
paid once at the end of the period. The loan carries an interest rate of 3.275% per annum.
- On 5 July 2022, an agreement was concluded to provide loan No. 54 to Bulgartransgaz EAD in the
amount of BGN 37,865 thousand. The loan was granted for the targeted purpose of financing further
assignments awarded to Bulgartransgaz EAD in service of the public, under orders from the Minister
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
16
of Energy. The loan period is until 30 June 2024, with a six-month grace period for paying the
principal. The annual interest rate is 1.735%.
- On 29 September 2022, the fourth tranche of the Financing Agreement for the construction of the
IGB gas pipeline with the European Investment Bank was utilized. The amount of EUR 19.9 million
was provided to ICGB AD under a Shareholder Loan Agreement. The interest rate is 2.88%, payable
twice a year, and the repayment period is until 29 September 2047.
o In the process of searching for a sustainable solution to reduce the amount of receivables from Toplofikatsia Sofia
EAD and ensuring the financial interests of the holding, a trilateral agreement was signed on 29 August 2022
between Toplofikatsia Sofia EAD, Bulgarian Energy Holding EAD, and the Security of the Electricity System
Fund. According to the agreement, the Security of the Electricity System Fund is obligated to pay 20% of the
monthly premiums due under a contract for compensation of the net quantity of electricity from HECP directly
into the account of Bulgarian Energy Holding EAD. These funds will be used to repay obligations under the
agreements dated 11 December 2015 and 1 April 2019. The transfers will be made into the holding's account
upon approval from the Bulgarian Development Bank AD, with the amounts not being paid into a special account
of Toplofikatsia Sofia EAD at the bank.
o On 15 September 2022, an agreement was signed with Toplofikatsia Sofia EAD, consolidating the obligations
under cession agreements dated 23 December, 2020, 28 October 2021, and 18 November 2021, with a total
amount of BGN 333,596,905.98. The agreement came into force on 22 December after approval was granted by
the Sofia Municipal Council.
As of 31 December 2022, the receivables of BEH EAD under granted loans to related parties amounted to BGN
1,638,213 thousand, of which the non-current part made up BGN 1,268,430 thousand and the current receivables
amounted to BGN 369,783 thousand.
In 2022 BEH EAD continued to provide active financial support to its subsidiaries, which allowed the Group`s
companies to overcome smoothly the challenges in the energy sector that occurred due to the complex geopolitical
situation.
2.5. Information on transactions with related parties
In 2022 and 2021, the following business transactions were carried out between BEH EAD and its subsidiaries and
companies under joint control:
in thousand BGN 31 December 2022 31 December 2021
Purchases 39,286 206,617
Sales 2,112,743 1,168,452
Trade receivables 12,221 47,167
Trade payables 57,481 68,564
2.6. Commitments, contingent liabilities, and other significant events
In the normal course of business for the Company, litigation and claims arise. According to the Company's
management, the costs necessary to resolve these disputes and claims will not have a material effect on the financial
position and cash flows in future financial periods.
Loan from the European Investment Bank
In October 2019, Bulgarian Energy Holding EAD and the European Investment Bank signed a Financing Agreement
for the construction of the IGB gas pipeline worth EUR 109.9 million with a state financial guarantee from the
Republic of Bulgaria, the Guarantee Agreement ratified by the National Assembly. The loan is provided to Bulgarian
Energy Holding EAD as a shareholder in ICGB AD. For its part, BEH EAD transfers the loan financing of the project
company through a Shareholder Loan Agreement in the same amount, under the same financial conditions set in the
agreement with the European Investment Bank and without additional margin for Bulgarian Energy Holding EAD.
The repayment of the loan from the European Investment Bank will be carried out using a grace period for repayment
Annual Separate Activity Report
31 December 2022
16
of Energy. The loan period is until 30 June 2024, with a six-month grace period for paying the
principal. The annual interest rate is 1.735%.
- On 29 September 2022, the fourth tranche of the Financing Agreement for the construction of the
IGB gas pipeline with the European Investment Bank was utilized. The amount of EUR 19.9 million
was provided to ICGB AD under a Shareholder Loan Agreement. The interest rate is 2.88%, payable
twice a year, and the repayment period is until 29 September 2047.
o In the process of searching for a sustainable solution to reduce the amount of receivables from Toplofikatsia Sofia
EAD and ensuring the financial interests of the holding, a trilateral agreement was signed on 29 August 2022
between Toplofikatsia Sofia EAD, Bulgarian Energy Holding EAD, and the Security of the Electricity System
Fund. According to the agreement, the Security of the Electricity System Fund is obligated to pay 20% of the
monthly premiums due under a contract for compensation of the net quantity of electricity from HECP directly
into the account of Bulgarian Energy Holding EAD. These funds will be used to repay obligations under the
agreements dated 11 December 2015 and 1 April 2019. The transfers will be made into the holding's account
upon approval from the Bulgarian Development Bank AD, with the amounts not being paid into a special account
of Toplofikatsia Sofia EAD at the bank.
o On 15 September 2022, an agreement was signed with Toplofikatsia Sofia EAD, consolidating the obligations
under cession agreements dated 23 December, 2020, 28 October 2021, and 18 November 2021, with a total
amount of BGN 333,596,905.98. The agreement came into force on 22 December after approval was granted by
the Sofia Municipal Council.
As of 31 December 2022, the receivables of BEH EAD under granted loans to related parties amounted to BGN
1,638,213 thousand, of which the non-current part made up BGN 1,268,430 thousand and the current receivables
amounted to BGN 369,783 thousand.
In 2022 BEH EAD continued to provide active financial support to its subsidiaries, which allowed the Group`s
companies to overcome smoothly the challenges in the energy sector that occurred due to the complex geopolitical
situation.
2.5. Information on transactions with related parties
In 2022 and 2021, the following business transactions were carried out between BEH EAD and its subsidiaries and
companies under joint control:
in thousand BGN 31 December 2022 31 December 2021
Purchases 39,286 206,617
Sales 2,112,743 1,168,452
Trade receivables 12,221 47,167
Trade payables 57,481 68,564
2.6. Commitments, contingent liabilities, and other significant events
In the normal course of business for the Company, litigation and claims arise. According to the Company's
management, the costs necessary to resolve these disputes and claims will not have a material effect on the financial
position and cash flows in future financial periods.
Loan from the European Investment Bank
In October 2019, Bulgarian Energy Holding EAD and the European Investment Bank signed a Financing Agreement
for the construction of the IGB gas pipeline worth EUR 109.9 million with a state financial guarantee from the
Republic of Bulgaria, the Guarantee Agreement ratified by the National Assembly. The loan is provided to Bulgarian
Energy Holding EAD as a shareholder in ICGB AD. For its part, BEH EAD transfers the loan financing of the project
company through a Shareholder Loan Agreement in the same amount, under the same financial conditions set in the
agreement with the European Investment Bank and without additional margin for Bulgarian Energy Holding EAD.
The repayment of the loan from the European Investment Bank will be carried out using a grace period for repayment
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
17
of the principal of the disbursed tranches, which according to the Agreement concluded with the bank may last up to
7 years from the date of disbursement of the tranche.
On 17 August 2020, the first tranche of EUR 30 million was disbursed under the following conditions: payment of
interest every six months at an annual interest rate of 0.259%, five-year grace period for principal payments, payment
of principal twice per annum, the last installment being due on 17 August 2045.
On 18 January 2021, a second tranche of EUR 30 million was disbursed under the following conditions: payment of
interest every six months at an annual interest rate of 0.237%, five-year grace period for principal payments, payment
of principal twice per annum, the last installment being due on 18 January 2046.
On 1 December 2021, a third tranche of EUR 30 million was disbursed under the following conditions: payment of
interest every six months at an annual interest rate of 0.612%, five-year grace period for principal payments, payment
of principal twice per annum, the last installment being due on 1 December 2046.
The fourth final tranche amounting to EUR 19.9 million was utilized on 29 September 2022 under the following terms:
payment of interest twice a year in the amount of 2.888% annual interest rate, five-year grace period for principal
payments, payment of principal twice a year, the last installment being due on 29 September 2047.
Proceedings by the European Commission against Bulgarian Energy Holding EAD
Two proceedings against Bulgarian Energy Holding EAD and its subsidiaries were instituted by the European
Commission, for possible abuse of a dominant position – Case АТ.39767 – BEH Electricity, and Case АТ.39849 –
BEH Gas.
Case AT.39767 – BEH Electricity ended in March 2021 with the acceptance by the European Commission of the final
report of the Monitoring Trustee without remarks and the relieving of Advolis from his duties as a Monitoring Trustee
under the case.
Case COMP/B1/АТ.39849 – BEH gas
The case concerns an alleged infringement of Article 102 TFEU in relation to alleged actions of BEH EAD and its
subsidiaries – Bulgargaz EAD and Bulgartransgaz EAD, aimed at:
• preventing their competitors from access to key gas infrastructure (gas transmission network and natural gas
storage facility) in Bulgaria, explicitly or implicitly denying access to third parties or delaying;
• preventing competitors from gaining access to a main import pipeline by reserving capacity that remains
unused.
The proceedings were initiated in 2013 with a view to the adoption of a decision under Chapter 3 (Articles 7 to 10) of
Regulation 1/2003.
On 23 March 2015, the EC issued a Statement of Objections. Bulgarian Energy Holding EAD and its gas subsidiaries
submitted their respective responses to the European Commission on 9 July 2015 (Bulgargaz EAD), 10 July 2015
(Bulgarian Energy Holding EAD) and 17 July 2015 (Bulgartransgaz EAD).
On 24 November 2017, a decision was adopted by the 44th National Assembly of the Republic of Bulgaria to take the
necessary actions for the conclusion of Case COMP/B1/AT.39849 - BEH Gas, in which the National Assembly
supports the conclusion of the case under Article 7 of Regulation (EC) No 1/2003 without admitting to any alleged
infringements or assuming responsibility for them, while fulfilling the obligations arising from a potential prohibition
decision, including any financial sanctions. At present, the European Commission has not taken an official decision
to conclude the case, including regarding the potential amount of the financial sanction.
On 26 July 2018, a decision was adopted by the 44th National Assembly of the Republic of Bulgaria to take actions
for the conclusion of Case COMP/B1/AT.39849 - BEH Gas under Article 9 of Regulation (EC) No 1/2003 by
undertaking commitments on the part of the Bulgarian side and reaching an agreement with the European Commission.
The second decision of the National Assembly is motivated by the development of Case COMP/B1/AT.39816
between the EC and Gazprom, in which on 24 May 2018, the Commission announced that an agreement had been
reached and the case was concluded under Article 9 of Regulation (EC) No 1/2003 without any financial sanctions.
Annual Separate Activity Report
31 December 2022
17
of the principal of the disbursed tranches, which according to the Agreement concluded with the bank may last up to
7 years from the date of disbursement of the tranche.
On 17 August 2020, the first tranche of EUR 30 million was disbursed under the following conditions: payment of
interest every six months at an annual interest rate of 0.259%, five-year grace period for principal payments, payment
of principal twice per annum, the last installment being due on 17 August 2045.
On 18 January 2021, a second tranche of EUR 30 million was disbursed under the following conditions: payment of
interest every six months at an annual interest rate of 0.237%, five-year grace period for principal payments, payment
of principal twice per annum, the last installment being due on 18 January 2046.
On 1 December 2021, a third tranche of EUR 30 million was disbursed under the following conditions: payment of
interest every six months at an annual interest rate of 0.612%, five-year grace period for principal payments, payment
of principal twice per annum, the last installment being due on 1 December 2046.
The fourth final tranche amounting to EUR 19.9 million was utilized on 29 September 2022 under the following terms:
payment of interest twice a year in the amount of 2.888% annual interest rate, five-year grace period for principal
payments, payment of principal twice a year, the last installment being due on 29 September 2047.
Proceedings by the European Commission against Bulgarian Energy Holding EAD
Two proceedings against Bulgarian Energy Holding EAD and its subsidiaries were instituted by the European
Commission, for possible abuse of a dominant position – Case АТ.39767 – BEH Electricity, and Case АТ.39849 –
BEH Gas.
Case AT.39767 – BEH Electricity ended in March 2021 with the acceptance by the European Commission of the final
report of the Monitoring Trustee without remarks and the relieving of Advolis from his duties as a Monitoring Trustee
under the case.
Case COMP/B1/АТ.39849 – BEH gas
The case concerns an alleged infringement of Article 102 TFEU in relation to alleged actions of BEH EAD and its
subsidiaries – Bulgargaz EAD and Bulgartransgaz EAD, aimed at:
• preventing their competitors from access to key gas infrastructure (gas transmission network and natural gas
storage facility) in Bulgaria, explicitly or implicitly denying access to third parties or delaying;
• preventing competitors from gaining access to a main import pipeline by reserving capacity that remains
unused.
The proceedings were initiated in 2013 with a view to the adoption of a decision under Chapter 3 (Articles 7 to 10) of
Regulation 1/2003.
On 23 March 2015, the EC issued a Statement of Objections. Bulgarian Energy Holding EAD and its gas subsidiaries
submitted their respective responses to the European Commission on 9 July 2015 (Bulgargaz EAD), 10 July 2015
(Bulgarian Energy Holding EAD) and 17 July 2015 (Bulgartransgaz EAD).
On 24 November 2017, a decision was adopted by the 44th National Assembly of the Republic of Bulgaria to take the
necessary actions for the conclusion of Case COMP/B1/AT.39849 - BEH Gas, in which the National Assembly
supports the conclusion of the case under Article 7 of Regulation (EC) No 1/2003 without admitting to any alleged
infringements or assuming responsibility for them, while fulfilling the obligations arising from a potential prohibition
decision, including any financial sanctions. At present, the European Commission has not taken an official decision
to conclude the case, including regarding the potential amount of the financial sanction.
On 26 July 2018, a decision was adopted by the 44th National Assembly of the Republic of Bulgaria to take actions
for the conclusion of Case COMP/B1/AT.39849 - BEH Gas under Article 9 of Regulation (EC) No 1/2003 by
undertaking commitments on the part of the Bulgarian side and reaching an agreement with the European Commission.
The second decision of the National Assembly is motivated by the development of Case COMP/B1/AT.39816
between the EC and Gazprom, in which on 24 May 2018, the Commission announced that an agreement had been
reached and the case was concluded under Article 9 of Regulation (EC) No 1/2003 without any financial sanctions.
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
18
On 17 December 2018, the European Commission announced Decision C(2018)8806 in Case AT.39849 BEH-Gaz,
in which the European Commission imposed a fine on Bulgarian Energy Holding EAD (BEH), its subsidiary for gas
supply Bulgargaz EAD, and its subsidiary for gas infrastructure Bulgartransgaz EAD (the BEH Group) in the amount
of EUR 77,068,000 for blocking competitors' access to key gas infrastructure in Bulgaria in violation of EU antitrust
rules. The decision was received by the three companies on 19 December 2018, which marked the beginning of the
deadline for appealing the EC's decision (two months and ten days from the notification of the decision to the parties)
and for payment of the fine (three months from the notification of the decision to the parties) as specified in the
decision. The appeal of the decision does not suspend the payment of the fine.
On 18 March 2019, ING Bank NV issued two unsecured bank guarantees in favor of the EU with a total amount equal
to the amount of the fine of EUR 77,068,000, as follows:
- a bank guarantee in the amount of EUR 51,379 thousand, covering 2/3 of the total amount of the fine,
securing the liabilities of Bulgarian Energy Holding EAD and Bulgargaz EAD;
- a bank guarantee in the amount of EUR 25,689 thousand, securing the liability of Bulgartransgaz EAD under
the imposed sanction.
On 4 July 2019, the Bulgarian State, through the Ministry of Foreign Affairs, filed a petition to intervene in the case
in support of BEH EAD and its gas subsidiaries.
On 26 August 2019, the European Commission presented before the General Court its Defence in response to the
complaint lodged by Bulgarian Energy Holding EAD, Bulgargaz EAD and Bulgartransgaz EAD.
On 29 November 2019, Bulgarian Energy Holding EAD, Bulgargaz EAD and Bulgartransgaz EAD filed an
Opposition against the European Commission Defence.
On 20 February 2020, the Republic of Bulgaria filed through the Ministry of Foreign Affairs, within the period
specified by the General Court of the European Union, the official position of the Republic of Bulgaria on Case Т-
136/19, submitted by the Ministry of Energy and the Ministry Foreign Affairs, whereby the State intervened in support
of Bulgarian Energy Holding EAD, Bulgargaz EAD, and Bulgartransgaz EAD against the European Commission,
before the General Court of the European Union. The General Court examined additional documents and requested
information in order to clarify all of the circumstances attached to the case. By letter dated 14.3.2022, the Court
requested the European Commission to provide non-confidential versions of the documents listed by the Court. A
response from the European Commission is expected.
In 2018, the Company recognized a provision in connection with the case COMP/B1/АТ.39849 – BEH Gas in the
amount of BGN 50,244 thousand. In 2022, the accrued expense for provision in the case is in the amount of BGN 754
thousand. (For 2021: BGN 754 thousand). The total value of the obligation under the accrued provision as of 31
December 2022 is BGN 53,100 thousand. (31 December 2021: BGN 52,346 thousand).
On 29 September 2022, hearing of the oral pleadings between the parties was held. It has to be taken into account that
the oral pleadings are the last stage of the proceedings. A decision of the Court of the European Union is pending.
Legal claims
There are no significant legal claims brought against the Company.
Lease contracts
The lease liabilities of the Company are as follows:
31 December 2022 31 December 2021
Minimum
lease
installments
Discounting
Present
value of
installments
Minimum
lease
installments
Discounting
Present
value of
installments
BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
Within one year 93 (14) 79 325 (106) 219
Between one and five
years 213 (31) 182 1,164 (357) 807
Over five years 224 (12) 212 2,471 (342) 2,129
Total minimum lease
payments under lease
contracts
530 (57) 473 3.960 (805) 3,155
Annual Separate Activity Report
31 December 2022
18
On 17 December 2018, the European Commission announced Decision C(2018)8806 in Case AT.39849 BEH-Gaz,
in which the European Commission imposed a fine on Bulgarian Energy Holding EAD (BEH), its subsidiary for gas
supply Bulgargaz EAD, and its subsidiary for gas infrastructure Bulgartransgaz EAD (the BEH Group) in the amount
of EUR 77,068,000 for blocking competitors' access to key gas infrastructure in Bulgaria in violation of EU antitrust
rules. The decision was received by the three companies on 19 December 2018, which marked the beginning of the
deadline for appealing the EC's decision (two months and ten days from the notification of the decision to the parties)
and for payment of the fine (three months from the notification of the decision to the parties) as specified in the
decision. The appeal of the decision does not suspend the payment of the fine.
On 18 March 2019, ING Bank NV issued two unsecured bank guarantees in favor of the EU with a total amount equal
to the amount of the fine of EUR 77,068,000, as follows:
- a bank guarantee in the amount of EUR 51,379 thousand, covering 2/3 of the total amount of the fine,
securing the liabilities of Bulgarian Energy Holding EAD and Bulgargaz EAD;
- a bank guarantee in the amount of EUR 25,689 thousand, securing the liability of Bulgartransgaz EAD under
the imposed sanction.
On 4 July 2019, the Bulgarian State, through the Ministry of Foreign Affairs, filed a petition to intervene in the case
in support of BEH EAD and its gas subsidiaries.
On 26 August 2019, the European Commission presented before the General Court its Defence in response to the
complaint lodged by Bulgarian Energy Holding EAD, Bulgargaz EAD and Bulgartransgaz EAD.
On 29 November 2019, Bulgarian Energy Holding EAD, Bulgargaz EAD and Bulgartransgaz EAD filed an
Opposition against the European Commission Defence.
On 20 February 2020, the Republic of Bulgaria filed through the Ministry of Foreign Affairs, within the period
specified by the General Court of the European Union, the official position of the Republic of Bulgaria on Case Т-
136/19, submitted by the Ministry of Energy and the Ministry Foreign Affairs, whereby the State intervened in support
of Bulgarian Energy Holding EAD, Bulgargaz EAD, and Bulgartransgaz EAD against the European Commission,
before the General Court of the European Union. The General Court examined additional documents and requested
information in order to clarify all of the circumstances attached to the case. By letter dated 14.3.2022, the Court
requested the European Commission to provide non-confidential versions of the documents listed by the Court. A
response from the European Commission is expected.
In 2018, the Company recognized a provision in connection with the case COMP/B1/АТ.39849 – BEH Gas in the
amount of BGN 50,244 thousand. In 2022, the accrued expense for provision in the case is in the amount of BGN 754
thousand. (For 2021: BGN 754 thousand). The total value of the obligation under the accrued provision as of 31
December 2022 is BGN 53,100 thousand. (31 December 2021: BGN 52,346 thousand).
On 29 September 2022, hearing of the oral pleadings between the parties was held. It has to be taken into account that
the oral pleadings are the last stage of the proceedings. A decision of the Court of the European Union is pending.
Legal claims
There are no significant legal claims brought against the Company.
Lease contracts
The lease liabilities of the Company are as follows:
31 December 2022 31 December 2021
Minimum
lease
installments
Discounting
Present
value of
installments
Minimum
lease
installments
Discounting
Present
value of
installments
BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
Within one year 93 (14) 79 325 (106) 219
Between one and five
years 213 (31) 182 1,164 (357) 807
Over five years 224 (12) 212 2,471 (342) 2,129
Total minimum lease
payments under lease
contracts
530 (57) 473 3.960 (805) 3,155
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
19
The company has concluded the following lease contracts:
Bulgarian Energy Holding EAD concluded a contract with NPP Kozloduy EAD on 1 September 2015 for the rental
of an administrative building at 16 Veslets Str., Sofia. The contract period is 10 years, with an option for extension.
The monthly installment under the contract amounts to BGN 24 thousand VAT excluded. To calculate the present
value of the lease liability, Bulgarian Energy Holding EAD used a discount percentage of 3.50%, which is an interest
rate derived by the company in financing its own activities during the last year and corresponds to the market levels.
However, the asset was obtained by Bulgarian Energy Holding EAD through a sales contract dated 11 October 2022,
and the lease contract was terminated. The company reports a revenue from the termination of the lease contract in
the amount of BGN 173 thousand.
Bulgarian Energy Holding EAD has been renting 4 new multifunctional devices. The contract was signed in 2017 and
has a validity period of 60 months. The rental fee for all devices is BGN 380 per month. After the contract expiry
date, the parties may negotiate conditions for the acquisition of the devices by the lessee. The present value of the
lease liability is the market value of the devices at the time of the lease contract's conclusion, assuming a direct sale
by the same supplier without funding. The calculated leasing interest rate is 1.41%. As of 31 December 2022, the
contract has expired, and the assets have been returned to the lessor.
Bulgarian Energy Holding EAD has been renting 3 motor vehicles for a period of four years. The present value of the
lease liability is the market value of the vehicles at the time of the lease contract's conclusion, assuming a direct sale
from the same supplier with no financing. The calculated interest rate for leasing two of the vehicles is 1.31%, and for
the third vehicle, it is 2.27%. As of 31 December 2022, the present value of the liability was BGN 23 thousand.
Bulgarian Energy Holding EAD is leasing 1 vehicle for a period of two years. The present value of the lease liability
is the market value of the vehicle at the time of the lease contract's conclusion, assuming a direct sale from the same
supplier with no financing, reduced proportionally to the term of use of the asset. The calculated interest rate for the
vehicle lease is 2.0039%. As of 31 December 2022, the current value of the liability is BGN 20 thousand.
Bulgarian Energy Holding EAD has rented a part of real estate for administrative purposes for a period of five years
with an option for extension. The monthly installment under the rental contract amounts to BGN 4,000, excluding
VAT. To determine the present value of the lease liability, Bulgarian Energy Holding EAD has used a discount rate
of 2.45%, which is an interest rate obtained by the company in financing its own activities in the last year and
corresponds to market levels. As of 31 December 2021, the current value of the liability is BGN 431 thousand.
The assets are used only by the Company and there are no concluded contracts for sub-lease.
The amounts recognized in the profit or loss statement are as follows:
- Depreciation costs amounting to of BGN 259 thousand.
- The interest expenses amounting to BGN 96 thousand.
The total leasing cash flow in 2022 is as follows:
- Payments related to lease contracts – BGN 380 thousand.
Credit rating
Moody's Rating Agency
On 18 June 2018, Moody's rating agency assigned a rating of ‘ Ba ’ with a stable outlook for the Bulgarian Energy
Holding EAD Group and ‘ Ba2 ’ for unsecured bonds issued by the company.
On 12 July 2021, Moody's assigned ‘ Ba2 ’ with a stable outlook of the long-term credit rating of emission of unsecured
and not-subordinated bonds in the amount of EUR 600 million with a maturity of 7 years issued on 15.07.2021 by
Bulgarian Energy Holding EAD.
With an updated credit opinion dated 2 August 2022, Moody’s affirmed the long-term credit rating of BEH EAD
‘Bа1’ with a stable outlook. The opinion takes into account the improved indicators of BEH EAD, which are mainly
due to the realized profit from sale of electricity on the main market. The rating agency also states the important
contribution of the electricity and natural gas transmission operators in establishing the financial results of the BEH
Group. As positive factors, influencing the credit profile of the Company, the credit agency states the health levels of
the indebtedness indicators in combination with reasonable investment costs.
Annual Separate Activity Report
31 December 2022
19
The company has concluded the following lease contracts:
Bulgarian Energy Holding EAD concluded a contract with NPP Kozloduy EAD on 1 September 2015 for the rental
of an administrative building at 16 Veslets Str., Sofia. The contract period is 10 years, with an option for extension.
The monthly installment under the contract amounts to BGN 24 thousand VAT excluded. To calculate the present
value of the lease liability, Bulgarian Energy Holding EAD used a discount percentage of 3.50%, which is an interest
rate derived by the company in financing its own activities during the last year and corresponds to the market levels.
However, the asset was obtained by Bulgarian Energy Holding EAD through a sales contract dated 11 October 2022,
and the lease contract was terminated. The company reports a revenue from the termination of the lease contract in
the amount of BGN 173 thousand.
Bulgarian Energy Holding EAD has been renting 4 new multifunctional devices. The contract was signed in 2017 and
has a validity period of 60 months. The rental fee for all devices is BGN 380 per month. After the contract expiry
date, the parties may negotiate conditions for the acquisition of the devices by the lessee. The present value of the
lease liability is the market value of the devices at the time of the lease contract's conclusion, assuming a direct sale
by the same supplier without funding. The calculated leasing interest rate is 1.41%. As of 31 December 2022, the
contract has expired, and the assets have been returned to the lessor.
Bulgarian Energy Holding EAD has been renting 3 motor vehicles for a period of four years. The present value of the
lease liability is the market value of the vehicles at the time of the lease contract's conclusion, assuming a direct sale
from the same supplier with no financing. The calculated interest rate for leasing two of the vehicles is 1.31%, and for
the third vehicle, it is 2.27%. As of 31 December 2022, the present value of the liability was BGN 23 thousand.
Bulgarian Energy Holding EAD is leasing 1 vehicle for a period of two years. The present value of the lease liability
is the market value of the vehicle at the time of the lease contract's conclusion, assuming a direct sale from the same
supplier with no financing, reduced proportionally to the term of use of the asset. The calculated interest rate for the
vehicle lease is 2.0039%. As of 31 December 2022, the current value of the liability is BGN 20 thousand.
Bulgarian Energy Holding EAD has rented a part of real estate for administrative purposes for a period of five years
with an option for extension. The monthly installment under the rental contract amounts to BGN 4,000, excluding
VAT. To determine the present value of the lease liability, Bulgarian Energy Holding EAD has used a discount rate
of 2.45%, which is an interest rate obtained by the company in financing its own activities in the last year and
corresponds to market levels. As of 31 December 2021, the current value of the liability is BGN 431 thousand.
The assets are used only by the Company and there are no concluded contracts for sub-lease.
The amounts recognized in the profit or loss statement are as follows:
- Depreciation costs amounting to of BGN 259 thousand.
- The interest expenses amounting to BGN 96 thousand.
The total leasing cash flow in 2022 is as follows:
- Payments related to lease contracts – BGN 380 thousand.
Credit rating
Moody's Rating Agency
On 18 June 2018, Moody's rating agency assigned a rating of ‘ Ba ’ with a stable outlook for the Bulgarian Energy
Holding EAD Group and ‘ Ba2 ’ for unsecured bonds issued by the company.
On 12 July 2021, Moody's assigned ‘ Ba2 ’ with a stable outlook of the long-term credit rating of emission of unsecured
and not-subordinated bonds in the amount of EUR 600 million with a maturity of 7 years issued on 15.07.2021 by
Bulgarian Energy Holding EAD.
With an updated credit opinion dated 2 August 2022, Moody’s affirmed the long-term credit rating of BEH EAD
‘Bа1’ with a stable outlook. The opinion takes into account the improved indicators of BEH EAD, which are mainly
due to the realized profit from sale of electricity on the main market. The rating agency also states the important
contribution of the electricity and natural gas transmission operators in establishing the financial results of the BEH
Group. As positive factors, influencing the credit profile of the Company, the credit agency states the health levels of
the indebtedness indicators in combination with reasonable investment costs.
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
20
At the same time, according to Moody’s , the Company remains exposed to a political risk, related mainly to the
involvement of the Company in providing a resource for financing compensations in the Energy sector, as well as to
a regulatory risk, related to the decisions of the independent regulator concerning the activity of the companies within
the Group implementing activity under regulated prices.
The outlook of the credit ra ting of BEH EAD is stable and reflects the standpoint of Moody’s that the ongoing
liberalization process of the Bulgarian energy market has a favorable effect on BEH EAD, which contributes to the
improvement of the credit profile of the Company.
Factors that could lead to improvement / increase of the credit rating of BEH EAD by Moody’s credit agency:
✓ The process of liberalization of the electricity market in Bulgaria to be completed and continue to be of
benefit to BEH EAD;
✓ The creditworthiness of the comp any and the expectations of Moody’s for support from the Government of
Bulgaria to BEH EAD to remain at least at the same level.
Factors that could lead to deterioration / downgrade of the credit rating of BEH EAD by Moody’s credit agency:
✓ Continued deterioration of the financial profile of BEH EAD below the levels set by Moody's, as a result,
but not only, of adverse changes in the operating environment, including significant delays in the
liberalization of the electricity market in Bulgaria and / or adverse regulatory changes;
✓ Downgrade of Bulgaria's credit rating or reassessment in the negative direction of the expected strong support
from the Bulgarian government.
Fitch Ratings Rating Agency
On 26 February 2021, Fitch Ratings reaffirmed BB's long-term foreign and local currency credit rating, raising its
outlook from stable to positive. The change is a result of the increase of the outlook of the credit rating of the Republic
of Bulgaria from stable to positive.
On 10 May 2021, the credit rating of the unsecured and non-subordinated bonds of Bulgarian Energy Holding EAD
was raised to the BB level of BB-. The change reflects the application of the updated "Criteria for restoration of the
corporate rating and the rating of financial instruments" of Fitch to the unsecured and unsubordinated rating of
"Bulgarian Energy Holding" EAD, which was placed, together with the corporate rating of the Issuer, in "Supervisory
Criteria". after the publication of the updated criteria on 9 April 2021. Another factor that favors the increase of the
credit rating is the expected reduction of the liabilities of the subsidiaries in the structure of Bulgarian Energy Holding
EAD.
On 23 July 2021, Fitch Ratings assigned “BB” to the long -term credit rating of an issue of unsecured and non-
subordinated bonds worth EUR 600 million with a 7-year maturity, issued on 15.07.2021 by Bulgarian Energy
Holding EAD. The same report also confirmed the long-term credit rating of the Company in foreign and local
currency - "BB" with a positive outlook.
Factors that, individually or collectively, could lead to an improvement / increase in the credit rating of BEH EAD by
the credit agency Fitch Ratings:
✓ Increasing the credit rating of Bulgaria;
✓ Further tangible government support for BEH EAD, including additional government guarantees that would
significantly increase the share of government-guaranteed debt, or cash injections that would link BEH's
credit profile more closely with Bulgaria's stronger credit profile;
✓ Stronger Independent Credit Profile (SPC) as a result of: sustainable reduction of the ratio of net leverage to
operating funds (FFO net leverage) below 4x, lower regulatory and political risk, higher predictability of
profits and better corporate management.
Factors that, individually or collectively, could lead to a deterioration / downgrade of the credit rating of BEH EAD
by the credit agency Fitch Ratings:
✓ Negative effect regarding the credit rating of Bulgaria;
✓ Weaker ties with the Bulgarian state;
✓ Deteriorating Independent Credit Rating (ICR) as a result of: steady increase in the ratio of net leverage to
operating assets (FFO net leverage) above 6x, escalation of regulatory and political risk or insufficient
liquidity.
Annual Separate Activity Report
31 December 2022
20
At the same time, according to Moody’s , the Company remains exposed to a political risk, related mainly to the
involvement of the Company in providing a resource for financing compensations in the Energy sector, as well as to
a regulatory risk, related to the decisions of the independent regulator concerning the activity of the companies within
the Group implementing activity under regulated prices.
The outlook of the credit ra ting of BEH EAD is stable and reflects the standpoint of Moody’s that the ongoing
liberalization process of the Bulgarian energy market has a favorable effect on BEH EAD, which contributes to the
improvement of the credit profile of the Company.
Factors that could lead to improvement / increase of the credit rating of BEH EAD by Moody’s credit agency:
✓ The process of liberalization of the electricity market in Bulgaria to be completed and continue to be of
benefit to BEH EAD;
✓ The creditworthiness of the comp any and the expectations of Moody’s for support from the Government of
Bulgaria to BEH EAD to remain at least at the same level.
Factors that could lead to deterioration / downgrade of the credit rating of BEH EAD by Moody’s credit agency:
✓ Continued deterioration of the financial profile of BEH EAD below the levels set by Moody's, as a result,
but not only, of adverse changes in the operating environment, including significant delays in the
liberalization of the electricity market in Bulgaria and / or adverse regulatory changes;
✓ Downgrade of Bulgaria's credit rating or reassessment in the negative direction of the expected strong support
from the Bulgarian government.
Fitch Ratings Rating Agency
On 26 February 2021, Fitch Ratings reaffirmed BB's long-term foreign and local currency credit rating, raising its
outlook from stable to positive. The change is a result of the increase of the outlook of the credit rating of the Republic
of Bulgaria from stable to positive.
On 10 May 2021, the credit rating of the unsecured and non-subordinated bonds of Bulgarian Energy Holding EAD
was raised to the BB level of BB-. The change reflects the application of the updated "Criteria for restoration of the
corporate rating and the rating of financial instruments" of Fitch to the unsecured and unsubordinated rating of
"Bulgarian Energy Holding" EAD, which was placed, together with the corporate rating of the Issuer, in "Supervisory
Criteria". after the publication of the updated criteria on 9 April 2021. Another factor that favors the increase of the
credit rating is the expected reduction of the liabilities of the subsidiaries in the structure of Bulgarian Energy Holding
EAD.
On 23 July 2021, Fitch Ratings assigned “BB” to the long -term credit rating of an issue of unsecured and non-
subordinated bonds worth EUR 600 million with a 7-year maturity, issued on 15.07.2021 by Bulgarian Energy
Holding EAD. The same report also confirmed the long-term credit rating of the Company in foreign and local
currency - "BB" with a positive outlook.
Factors that, individually or collectively, could lead to an improvement / increase in the credit rating of BEH EAD by
the credit agency Fitch Ratings:
✓ Increasing the credit rating of Bulgaria;
✓ Further tangible government support for BEH EAD, including additional government guarantees that would
significantly increase the share of government-guaranteed debt, or cash injections that would link BEH's
credit profile more closely with Bulgaria's stronger credit profile;
✓ Stronger Independent Credit Profile (SPC) as a result of: sustainable reduction of the ratio of net leverage to
operating funds (FFO net leverage) below 4x, lower regulatory and political risk, higher predictability of
profits and better corporate management.
Factors that, individually or collectively, could lead to a deterioration / downgrade of the credit rating of BEH EAD
by the credit agency Fitch Ratings:
✓ Negative effect regarding the credit rating of Bulgaria;
✓ Weaker ties with the Bulgarian state;
✓ Deteriorating Independent Credit Rating (ICR) as a result of: steady increase in the ratio of net leverage to
operating assets (FFO net leverage) above 6x, escalation of regulatory and political risk or insufficient
liquidity.
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
21
Assigned ESG Rating
For a public company actively involved in raising funds through the capital markets, such as BEH EAD, attracting
investor interest is associated with strict compliance with the social, managerial and environmental aspects of the
activities within the Holding. The ESG rating is awarded after an in-depth analysis of a company's rules and policies
related to the environmental, social and management aspects of its business; after assessing the overall impact and the
impact on the environment that the company remains in carrying out its business activities; as well as after a thorough
review of the available public information from the corporate website, articles and news about the company.
On 16 December 2021, the BEH Group was awarded an ESG rating of 34.2 points ("high risk"). The rating was
awarded by Sustainalytics, a company within Morningstar that is a world-renowned provider of ESG research, ratings
and data. The corporate ESG assessment provided to Bulgarian Energy Holding EAD is a one-time assessment valid
at the time of its award and has been prepared on the basis of the information provided by BEH EAD. The ESG risk
assessment report includes an overall ESG risk rating, an assessment of the Company's exposure and an assessment
of its management. Exposure refers to the extent to which a company is exposed to various material risks related to
environmental, social, and managerial aspects. The management assessment shows how well the company manages
these aspects. The BEH exposure assessment is 54.3 points ("medium risk") and the management assessment is 39.9
points ("average performance"),
The assessment is published on the websites of Sustainalytics and BEH EAD.
Program for compensation of consumers of electricity and natural gas, target contributions
o Electricity
For mitigating the economic effects resulting from the occurred instability of the prices on the energy market, a
Program was developed for compensation of the non-household end consumers of electricity, approved by decision
No. 739 of the Council of Ministers from 2021, amended and supplemented by further decisions of the Council of
Ministers. The proposed Program has a compensatory effect and supplements other temporary measures at national
level for raising the transparency and improving the functioning of the energy market, as well as for strengthening the
regulatory control.
By decision No. 30 of the Council of Ministers from 2022, amended by decisions No. 105, No.202, No.301 and
No.356 of the Council of Ministers from 2022, a Program was adopted for a compensation of non-household end
consumers of electricity from 01.01.2022 to 30.06.2022. The budget under the program is in the total amount of BGN
1,750 million.
The amount of the envisaged support under the Program for the period from 1 January 2022 until 30 April 2022 is a
fixed amount per one MWh based on the quantities of active electricity , on which a price “obligation to the public for
each individual month ” is charged , as the amount is exclusive of VAT. This compensation is calculated as 75% of the
difference between the average monthly market price for a base load of the " D ay ahead” segment of IBEX for the
respective month and the base price of BGN 185.59 per MWh (average base load price, " D ay ahead” market of IBEX
July 2021), but not more than BGN 250 per MWh for the period from 01.01.2022 to 31.03.2022 and not more than
BGN 300 per MWh for the period from 01.04.2022 to 30.04.2022. Compensation for consumers with prices below
the base prices is not planned.
For the period from 1 May 2022 until 30 June 2022 the amount of the compensation is calculated as 80% of the
difference between the average monthly market price for a base load of the “ D ay ahead” segment of IBEX for the
respective month and the base price of BGN 200.00 per MWh.
By Decision No. 534 of the Council of Ministers of 29 July 2022 a Program was approved for compensation of non-
household consumers of electricity and of the operators of electricity transmission and electricity distribution networks
for buying the quantities of electricity, used for technological costs for the period from 1 July 2022 to 30 September
2022 by the indicative budget under the program amounting to BGN 2,448 million, of which BGN 2,301 million for
non-household consumers and BGN 147 million for the operators of electricity transmission and electricity
distribution networks (the Operators).
Annual Separate Activity Report
31 December 2022
21
Assigned ESG Rating
For a public company actively involved in raising funds through the capital markets, such as BEH EAD, attracting
investor interest is associated with strict compliance with the social, managerial and environmental aspects of the
activities within the Holding. The ESG rating is awarded after an in-depth analysis of a company's rules and policies
related to the environmental, social and management aspects of its business; after assessing the overall impact and the
impact on the environment that the company remains in carrying out its business activities; as well as after a thorough
review of the available public information from the corporate website, articles and news about the company.
On 16 December 2021, the BEH Group was awarded an ESG rating of 34.2 points ("high risk"). The rating was
awarded by Sustainalytics, a company within Morningstar that is a world-renowned provider of ESG research, ratings
and data. The corporate ESG assessment provided to Bulgarian Energy Holding EAD is a one-time assessment valid
at the time of its award and has been prepared on the basis of the information provided by BEH EAD. The ESG risk
assessment report includes an overall ESG risk rating, an assessment of the Company's exposure and an assessment
of its management. Exposure refers to the extent to which a company is exposed to various material risks related to
environmental, social, and managerial aspects. The management assessment shows how well the company manages
these aspects. The BEH exposure assessment is 54.3 points ("medium risk") and the management assessment is 39.9
points ("average performance"),
The assessment is published on the websites of Sustainalytics and BEH EAD.
Program for compensation of consumers of electricity and natural gas, target contributions
o Electricity
For mitigating the economic effects resulting from the occurred instability of the prices on the energy market, a
Program was developed for compensation of the non-household end consumers of electricity, approved by decision
No. 739 of the Council of Ministers from 2021, amended and supplemented by further decisions of the Council of
Ministers. The proposed Program has a compensatory effect and supplements other temporary measures at national
level for raising the transparency and improving the functioning of the energy market, as well as for strengthening the
regulatory control.
By decision No. 30 of the Council of Ministers from 2022, amended by decisions No. 105, No.202, No.301 and
No.356 of the Council of Ministers from 2022, a Program was adopted for a compensation of non-household end
consumers of electricity from 01.01.2022 to 30.06.2022. The budget under the program is in the total amount of BGN
1,750 million.
The amount of the envisaged support under the Program for the period from 1 January 2022 until 30 April 2022 is a
fixed amount per one MWh based on the quantities of active electricity , on which a price “obligation to the public for
each individual month ” is charged , as the amount is exclusive of VAT. This compensation is calculated as 75% of the
difference between the average monthly market price for a base load of the " D ay ahead” segment of IBEX for the
respective month and the base price of BGN 185.59 per MWh (average base load price, " D ay ahead” market of IBEX
July 2021), but not more than BGN 250 per MWh for the period from 01.01.2022 to 31.03.2022 and not more than
BGN 300 per MWh for the period from 01.04.2022 to 30.04.2022. Compensation for consumers with prices below
the base prices is not planned.
For the period from 1 May 2022 until 30 June 2022 the amount of the compensation is calculated as 80% of the
difference between the average monthly market price for a base load of the “ D ay ahead” segment of IBEX for the
respective month and the base price of BGN 200.00 per MWh.
By Decision No. 534 of the Council of Ministers of 29 July 2022 a Program was approved for compensation of non-
household consumers of electricity and of the operators of electricity transmission and electricity distribution networks
for buying the quantities of electricity, used for technological costs for the period from 1 July 2022 to 30 September
2022 by the indicative budget under the program amounting to BGN 2,448 million, of which BGN 2,301 million for
non-household consumers and BGN 147 million for the operators of electricity transmission and electricity
distribution networks (the Operators).
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
22
The compensations under the Program were paid off until 31 December 2022.
The amount of the envisaged support under the Program for the period from 1 July 2022 to 30 September 2022 for
the non-household end consumers (except for the Operators) is calculated as 100% of the difference between the
average monthly market price for a base load of the “ D ay ahead” segment of Independent Bulgarian Energy Exchange
ЕАD (IBEX) for the respective month and the base price of BGN 250 per MWh.
In pursuance of their statutory obligations, the operators buy the electricity required for covering their technological
costs only from a stock market, which also makes them end consumers. At the same time, in establishing the prices
of the network services for the current price period, with Decision No. Ц -19 of 01.07.2022, the Energy and Water
regulatory Commission (EWRC) has established an estimate market price of the electricity for covering the
technological costs for the period 01.07.2022 - 30.06.2023 in the amount of BGN 446.78 per MWh for the operators
of electricity distribution networks and in the amount of BGN 421.08 per MWh for the operator of the electricity
transmission network.
By Decision No. 710 of the Council of Ministers of 29 September 2022, a Program was approved for compensation
of non-household end consumers of electricity and of the operators of electricity transmission and electricity
distribution networks for buying the quantities of electricity, used for technological costs for the period from 1 October
2022 to 31 December 2022. Upon calculation of the amount of the compensations for non-household end consumers,
the base price of BGN 250 per MWh is preserved. The indicative budget under the program amounts to BGN 3,594
million of which BGN 3,214 million for non-household consumers and BGN 380 million for the Operators.
- Target contributions
According to § 24 of the Law, amending and supplementing the State Budget Act of the Republic of Bulgaria
(LASSBARB) for 2022 (Prom. SG, issue 52 of 2022, effective from 01.07.2022), the public enterprises from the
Energy sector with 100% state interest in the capital should pay target contributions in Security of the Energy System
Fund, for covering costs under the programs adopted by the Council of Ministers for providing compensations, related
to the prices of electricity and/or natural gas. The amount of the contributions is determined by the Council of Ministers
upon a proposal of the Minister of Energy, taking into account the full cost of the produced electricity, the required
funds for implementation of investments and repairs, exclusive of VAT, guaranteeing the long-term operation of the
production capacities and providing economic justified profitability rate of the capital (§24, para. 2 of LASSBARB
for 2022).
According to decisions of the Council of Ministers, Bulgarian Energy Holding EAD paid target contributions in
Security of the Energy System Fund for the total amount of BGN 3,181,010,939 as follows:
− Decision of the Council of Ministers No. 490 of 15 July 2022 - target contributions in the amount of BGN
456,010,939.
− Decision of the Council of Ministers No. 587 of 11 August 2022 - target contributions in the amount of BGN
700,000,000.
− Decision of the Council of Ministers No. 648 of 7 September 2022 - target contributions in the amount of
BGN 970,000,000.
− Decision of the Council of Ministers No. 735 of 5 October 2022 - target contributions in the amount of BGN
650,000,000.
− Decision of the Council of Ministers No.920 of 17 November 2022 - target contributions in the amount of
BGN 200,000,000.
− Decision of the Council of Ministers No.1035 of December 19, 2022 - target contributions in amount of BGN
205,000,000.
Implementation of Regulation (ЕU) 2022/1854 of the Council of 6 October 2022
The transitional and final provisions (TFP) of the Law for Applying the provisions of the State Budget Act of the
Republic of Bulgaria for 2022, the Budget of the State Social Insurance Act for 2022 and the National Health Fund
Annual Separate Activity Report
31 December 2022
22
The compensations under the Program were paid off until 31 December 2022.
The amount of the envisaged support under the Program for the period from 1 July 2022 to 30 September 2022 for
the non-household end consumers (except for the Operators) is calculated as 100% of the difference between the
average monthly market price for a base load of the “ D ay ahead” segment of Independent Bulgarian Energy Exchange
ЕАD (IBEX) for the respective month and the base price of BGN 250 per MWh.
In pursuance of their statutory obligations, the operators buy the electricity required for covering their technological
costs only from a stock market, which also makes them end consumers. At the same time, in establishing the prices
of the network services for the current price period, with Decision No. Ц -19 of 01.07.2022, the Energy and Water
regulatory Commission (EWRC) has established an estimate market price of the electricity for covering the
technological costs for the period 01.07.2022 - 30.06.2023 in the amount of BGN 446.78 per MWh for the operators
of electricity distribution networks and in the amount of BGN 421.08 per MWh for the operator of the electricity
transmission network.
By Decision No. 710 of the Council of Ministers of 29 September 2022, a Program was approved for compensation
of non-household end consumers of electricity and of the operators of electricity transmission and electricity
distribution networks for buying the quantities of electricity, used for technological costs for the period from 1 October
2022 to 31 December 2022. Upon calculation of the amount of the compensations for non-household end consumers,
the base price of BGN 250 per MWh is preserved. The indicative budget under the program amounts to BGN 3,594
million of which BGN 3,214 million for non-household consumers and BGN 380 million for the Operators.
- Target contributions
According to § 24 of the Law, amending and supplementing the State Budget Act of the Republic of Bulgaria
(LASSBARB) for 2022 (Prom. SG, issue 52 of 2022, effective from 01.07.2022), the public enterprises from the
Energy sector with 100% state interest in the capital should pay target contributions in Security of the Energy System
Fund, for covering costs under the programs adopted by the Council of Ministers for providing compensations, related
to the prices of electricity and/or natural gas. The amount of the contributions is determined by the Council of Ministers
upon a proposal of the Minister of Energy, taking into account the full cost of the produced electricity, the required
funds for implementation of investments and repairs, exclusive of VAT, guaranteeing the long-term operation of the
production capacities and providing economic justified profitability rate of the capital (§24, para. 2 of LASSBARB
for 2022).
According to decisions of the Council of Ministers, Bulgarian Energy Holding EAD paid target contributions in
Security of the Energy System Fund for the total amount of BGN 3,181,010,939 as follows:
− Decision of the Council of Ministers No. 490 of 15 July 2022 - target contributions in the amount of BGN
456,010,939.
− Decision of the Council of Ministers No. 587 of 11 August 2022 - target contributions in the amount of BGN
700,000,000.
− Decision of the Council of Ministers No. 648 of 7 September 2022 - target contributions in the amount of
BGN 970,000,000.
− Decision of the Council of Ministers No. 735 of 5 October 2022 - target contributions in the amount of BGN
650,000,000.
− Decision of the Council of Ministers No.920 of 17 November 2022 - target contributions in the amount of
BGN 200,000,000.
− Decision of the Council of Ministers No.1035 of December 19, 2022 - target contributions in amount of BGN
205,000,000.
Implementation of Regulation (ЕU) 2022/1854 of the Council of 6 October 2022
The transitional and final provisions (TFP) of the Law for Applying the provisions of the State Budget Act of the
Republic of Bulgaria for 2022, the Budget of the State Social Insurance Act for 2022 and the National Health Fund
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
23
Act for 2022 (Prom. SG, issue 104 of 2022) covers the measures on the implementation of Regulation (ЕU) 2022/1854
of the Council of 6 October 2022 with regard to an urgent interference for dealing with the high energy prices.
According to § 8 of the TFP of the Law for Applying the provisions of the State Budget Act of the Republic of Bulgaria
for 2022, the producers of electricity with capacities for production of electricity with installed capacity over 1 МW
whose market revenues are gained from the sale of electricity produced from sources covered in Art. 7 of Regulation
(ЕU) 2022/1854 ; and for energy produced from coals and hydro-power plants according to Art. 8, paragraph 1, letters
“c“ and “e“ of Regulation (ЕU) 2022/1854, should deposit in the Security of the Energy System Fund target
contributions, which are the positive difference between the market revenues, exclusive VAT, and the set cap of the
revenues calculated upon applying the values for the respective type of producer with a period of the supply from 1
December 2022 to 30 June 2023, except for the transactions with balancing energy required for the needs for balancing
the electricity system from ESO EAD.
- Natural gas
The Council of Ministers developed and adopted with its Decisions (DCM) No. 31 of 25.01.2022, No. 93/25.02.2022,
No. 202/ 06.04.2022 and No. 356/01.06.2022 a Program for compensation of household consumers of natural gas and
heat-supplying companies, using natural gas as a main fuel by supporting them with a fixed amount per MWh. The
aim of the Program is to protect and assist the business and the consumers as a whole for dealing with the effects from
the price fluctuations of the natural gas. It has a compensatory effect and supplements other temporary measures at
national level for raising the transparency and improving the functioning of the energy market, as well as strengthening
the regulatory control. Initially the program covered a period of support from 1 December 2021 to 31 January 2022
inclusive, but subsequently the period was extended until 31 May 2022. The adoption of the program intended to keep
the competitiveness of the industry and overcome the further inflation pressure caused by the higher prices of the
natural gas. Thus, the amount due from the household clients was reduced. The compensation measure is in line with
the Communication of the European Commission of 13 October 2021 “ Tackling rising energy prices: a toolbox for
action and support” with regard to the energy prices. There were no adverse effects resulting from the provision of the
assistance on the competitiveness in the electricity market and the trade with electricity.
According to the Program, the amount of the compensation is calculated as 50% of the difference between the price
of a public suppler, approved by EWRC for the respective month, and the estimated price of the natural gas for the
first quarter or respectively the second quarter of 2022.
After the beginning of the war in Ukraine and the terminated natural gas deliveries to Bulgaria, in 2022 orders by the
Minister of Energy of Republic of Bulgaria were issued by which further obligations for serving the public were
assigned to Bulgargaz EAD and Bulgartransgaz ЕАD to ensure the continuity of the natural gas delivery on the
territory of the country by supercharging further natural gas quantities at the underground gas storage of Chiren. The
orders were issued on the grounds of Art. 70, para. 1, para. 2, iitem 1, para. 3 and para. 4 and Art. 71 of the Energy
Act and in relation to the Action Plan in emergency situations. According to the orders, Bulgarian Energy Holding
EAD provided the required financial resource by providing cash under the form of two short-term credit lines in the
total amount of BGN 260 million to Bulgargaz EAD and with a loan agreement to Bulgartransgaz ЕАD in the amount
of BGN 37,864,950 for buying the necessary natural gas quantities.
The military aggression of Russia in Ukraine led to raising energy prices and affected the energy deliveries in the EU.
The security of the energy deliveries and the protection of the citizens against the higher energy prices are priorities
to the EU leaders. One of the immediate measures agreed from the EU countries for dealing with the energy crisis
was to increase the gas reserves in order to ensure natural gas supplies. For that purpose, in June 2022 the EU countries
passed a regulation within the frameworks of the Council, by which to guarantee that the storage capacity in the EU
is filled in before the beginning of the heating season and it may be shared in a spirit of solidarity. The regulation
stipulates that the underground gas storages on the territories of the Member States should be filled in at least up to
80% of their capacity before the winter of 2022-2023 and up to 90% before the beginning of the next winter periods.
Other
The latest tax inspections of the Company were carried out by the tax administration as follows:
• Corporate tax – until 31 December 2020;
Annual Separate Activity Report
31 December 2022
23
Act for 2022 (Prom. SG, issue 104 of 2022) covers the measures on the implementation of Regulation (ЕU) 2022/1854
of the Council of 6 October 2022 with regard to an urgent interference for dealing with the high energy prices.
According to § 8 of the TFP of the Law for Applying the provisions of the State Budget Act of the Republic of Bulgaria
for 2022, the producers of electricity with capacities for production of electricity with installed capacity over 1 МW
whose market revenues are gained from the sale of electricity produced from sources covered in Art. 7 of Regulation
(ЕU) 2022/1854 ; and for energy produced from coals and hydro-power plants according to Art. 8, paragraph 1, letters
“c“ and “e“ of Regulation (ЕU) 2022/1854, should deposit in the Security of the Energy System Fund target
contributions, which are the positive difference between the market revenues, exclusive VAT, and the set cap of the
revenues calculated upon applying the values for the respective type of producer with a period of the supply from 1
December 2022 to 30 June 2023, except for the transactions with balancing energy required for the needs for balancing
the electricity system from ESO EAD.
- Natural gas
The Council of Ministers developed and adopted with its Decisions (DCM) No. 31 of 25.01.2022, No. 93/25.02.2022,
No. 202/ 06.04.2022 and No. 356/01.06.2022 a Program for compensation of household consumers of natural gas and
heat-supplying companies, using natural gas as a main fuel by supporting them with a fixed amount per MWh. The
aim of the Program is to protect and assist the business and the consumers as a whole for dealing with the effects from
the price fluctuations of the natural gas. It has a compensatory effect and supplements other temporary measures at
national level for raising the transparency and improving the functioning of the energy market, as well as strengthening
the regulatory control. Initially the program covered a period of support from 1 December 2021 to 31 January 2022
inclusive, but subsequently the period was extended until 31 May 2022. The adoption of the program intended to keep
the competitiveness of the industry and overcome the further inflation pressure caused by the higher prices of the
natural gas. Thus, the amount due from the household clients was reduced. The compensation measure is in line with
the Communication of the European Commission of 13 October 2021 “ Tackling rising energy prices: a toolbox for
action and support” with regard to the energy prices. There were no adverse effects resulting from the provision of the
assistance on the competitiveness in the electricity market and the trade with electricity.
According to the Program, the amount of the compensation is calculated as 50% of the difference between the price
of a public suppler, approved by EWRC for the respective month, and the estimated price of the natural gas for the
first quarter or respectively the second quarter of 2022.
After the beginning of the war in Ukraine and the terminated natural gas deliveries to Bulgaria, in 2022 orders by the
Minister of Energy of Republic of Bulgaria were issued by which further obligations for serving the public were
assigned to Bulgargaz EAD and Bulgartransgaz ЕАD to ensure the continuity of the natural gas delivery on the
territory of the country by supercharging further natural gas quantities at the underground gas storage of Chiren. The
orders were issued on the grounds of Art. 70, para. 1, para. 2, iitem 1, para. 3 and para. 4 and Art. 71 of the Energy
Act and in relation to the Action Plan in emergency situations. According to the orders, Bulgarian Energy Holding
EAD provided the required financial resource by providing cash under the form of two short-term credit lines in the
total amount of BGN 260 million to Bulgargaz EAD and with a loan agreement to Bulgartransgaz ЕАD in the amount
of BGN 37,864,950 for buying the necessary natural gas quantities.
The military aggression of Russia in Ukraine led to raising energy prices and affected the energy deliveries in the EU.
The security of the energy deliveries and the protection of the citizens against the higher energy prices are priorities
to the EU leaders. One of the immediate measures agreed from the EU countries for dealing with the energy crisis
was to increase the gas reserves in order to ensure natural gas supplies. For that purpose, in June 2022 the EU countries
passed a regulation within the frameworks of the Council, by which to guarantee that the storage capacity in the EU
is filled in before the beginning of the heating season and it may be shared in a spirit of solidarity. The regulation
stipulates that the underground gas storages on the territories of the Member States should be filled in at least up to
80% of their capacity before the winter of 2022-2023 and up to 90% before the beginning of the next winter periods.
Other
The latest tax inspections of the Company were carried out by the tax administration as follows:
• Corporate tax – until 31 December 2020;
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
24
• VAT – until 31 December 2020;
• Natural persons income tax – until 31 December 2008;
• Social security insurance – until 31 December 2008.
The management of the Company does not consider that there are significant risks as a result of the dynamic fiscal
and regulatory environment in Bulgaria, which would require adjustments in the financial statements for the year
ended on 31 December 2022.
Bulgarian Energy Holding EAD does not disclose non-financial declaration together with its separate activity report
because it implements art.50 of the Accountancy Act and publishes a consolidated non-financial information of the
BEH Group together with the consolidated financial statement of the Group.
3. Risk factors
The main elements that pose a risk in the activity of the Company are trade and other receivables and payables, trade
and financial balances with related parties, cash and financial assets available for sale. The types of risks to which the
Company is exposed in the course of its business activity are:
Currency risk
The Company's currency risk is related to the potential negative effect of a change in foreign exchange rates on the
realization of gains or losses from revaluation of assets and liabilities denominated in foreign currencies.
BEH EAD holds EUR securities of Transgaz SA, Romania, which were purchased at the initial public offering of
securities of the Romanian company and are presented in the statement of financial position of BEH EAD as available
for sale financial assets. The Company recognizes the assets at fair value measured at quoted prices on an active
market.
The coupon payments to the bondholders of BEH EAD on the bond issues issued in 2018 and in 2021 are payable in
euros.
Given the fact that the Republic of Bulgaria is in the conditions of the Currency Board and the BGN lev is fixed to
the European currency - the euro, the currency risk may be mainly affected by fluctuations in the US dollar. In 2022,
BEH EAD has no significant transactions in currencies other than BGN and EUR.
Liquidity risk
Liquidity risk, or the risk of financing, is related both to the possibility of difficulties in obtaining funds to meet
commitments and to the inability to quickly sell a financial asset at a value close to its fair value to cover short-term
liabilities.
In relation to liquidity risk management, the Company performs cash flow estimates and forecasts receivables and
payables and monitors its liquidity position on a daily basis in order to provide the necessary cash resources to meet
its current and non-current liabilities.
Credit risk
Credit risk includes the risk of financial loss due to non- payment of the liabilities of the debtor under a contract or а
financial instrument.
To minimize the credit risk, the Company carries out ongoing monitoring of its receivables, monitors the behavior of
its counterparties and reviews in detail the operations of its larger debtors.
The trade and financial relations of BEH EAD are mainly related to its subsidiaries. Accordingly, the credit risk for
the Company is related to the risk that any of the debtor companies will be unable to cover its liabilities and therefore
realize a financial loss. In this regard, control over the revenues, expenses and implementation of the business program
of the subsidiaries is carried out on a monthly basis.
With regard to receivables from third parties, the Company carries out ongoing monitoring of their size and their
maturity so that the Company can take timely actions to collect them.
Business risk
Annual Separate Activity Report
31 December 2022
24
• VAT – until 31 December 2020;
• Natural persons income tax – until 31 December 2008;
• Social security insurance – until 31 December 2008.
The management of the Company does not consider that there are significant risks as a result of the dynamic fiscal
and regulatory environment in Bulgaria, which would require adjustments in the financial statements for the year
ended on 31 December 2022.
Bulgarian Energy Holding EAD does not disclose non-financial declaration together with its separate activity report
because it implements art.50 of the Accountancy Act and publishes a consolidated non-financial information of the
BEH Group together with the consolidated financial statement of the Group.
3. Risk factors
The main elements that pose a risk in the activity of the Company are trade and other receivables and payables, trade
and financial balances with related parties, cash and financial assets available for sale. The types of risks to which the
Company is exposed in the course of its business activity are:
Currency risk
The Company's currency risk is related to the potential negative effect of a change in foreign exchange rates on the
realization of gains or losses from revaluation of assets and liabilities denominated in foreign currencies.
BEH EAD holds EUR securities of Transgaz SA, Romania, which were purchased at the initial public offering of
securities of the Romanian company and are presented in the statement of financial position of BEH EAD as available
for sale financial assets. The Company recognizes the assets at fair value measured at quoted prices on an active
market.
The coupon payments to the bondholders of BEH EAD on the bond issues issued in 2018 and in 2021 are payable in
euros.
Given the fact that the Republic of Bulgaria is in the conditions of the Currency Board and the BGN lev is fixed to
the European currency - the euro, the currency risk may be mainly affected by fluctuations in the US dollar. In 2022,
BEH EAD has no significant transactions in currencies other than BGN and EUR.
Liquidity risk
Liquidity risk, or the risk of financing, is related both to the possibility of difficulties in obtaining funds to meet
commitments and to the inability to quickly sell a financial asset at a value close to its fair value to cover short-term
liabilities.
In relation to liquidity risk management, the Company performs cash flow estimates and forecasts receivables and
payables and monitors its liquidity position on a daily basis in order to provide the necessary cash resources to meet
its current and non-current liabilities.
Credit risk
Credit risk includes the risk of financial loss due to non- payment of the liabilities of the debtor under a contract or а
financial instrument.
To minimize the credit risk, the Company carries out ongoing monitoring of its receivables, monitors the behavior of
its counterparties and reviews in detail the operations of its larger debtors.
The trade and financial relations of BEH EAD are mainly related to its subsidiaries. Accordingly, the credit risk for
the Company is related to the risk that any of the debtor companies will be unable to cover its liabilities and therefore
realize a financial loss. In this regard, control over the revenues, expenses and implementation of the business program
of the subsidiaries is carried out on a monthly basis.
With regard to receivables from third parties, the Company carries out ongoing monitoring of their size and their
maturity so that the Company can take timely actions to collect them.
Business risk
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
25
The business risk is determined by the specificity of the Holding's business and concerns the uncertainty associated
with generating sufficient revenue. There is no business risk for the Company's activity as a whole since the revenue
generated by the Company is mainly from loans and services provided to subsidiaries and dividends.
Cash flows risk
The cash flow risk is related to the uncertainty of cash inflows from an investment and is interrelated to currency risk.
The cash flows of the Company are subject to fluctuations in the amount of expected future cash flows associated with
a monetary financial instrument.
In order to reduce this risk, the Company regularly plans its cash flows and floating rate financial instruments have a
short-term nature with a period of less than one year. In order to achieve greater predictability of the expected cash
inflows, the majority of the loans granted to the companies are with fixed interest rates and annuity installments.
4. Future development, investments, forthcoming significant transactions and other
information under Art. 247 of the Commerce Act
4.1. Future development of Bulgarian Energy Holding EAD
BEH EAD is one of the leading energy companies in the region, with modern management and striving to reap the
benefits of bringing together different in their essence state-owned companies in the energy sector nature.
Independent transmission operators
In implementation of the requirements of the European Union (EU), full compliance with the requirements of the
Third Energy Liberalization Package on the Independent Transmission Operator model has been achieved. In 2014
the restructuring of NEK EAD and ESO EAD was successfully completed. The Energy Act endorsed the separation
of the gas and electricity transmission and distribution system operators and their differentiation into operationally
independent companies. There was expansion of the controlling powers of the Energy and Water Regulatory
Commission (EWRC), which certifies the gas and electricity transmission system operators for compliance with the
independence requirements, monitors their compliance and sends the relevant notifications to the European
Commission.
In 2015, the two transmission operators of BEH EAD, respectively for electricity – ESO EAD, and for natural gas –
Bulgartransgaz EAD, were certified by EWRC as independent transmission operators. The Commission concluded
that the companies have fulfilled all the criteria and have responded to all the requirements reflected in Chapter Eight
“a” of the Energy Act of the Republic of Bulgaria, Directive 2009/72/EC of the European Parliament and of the
Council of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive
2003/54/EC, and Regulation (EC) No 714/2009 of the European Parliament and of the Council of 13 July 2009 on
conditions for access to the network for cross-border exchanges in electricity and repealing Regulation (EC) No
1228/2003, and Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009 concerning
common rules for the internal market in natural gas, Regulation (EC) No 715/2009 of the European Parliament and of
the Council of 13 July 2009 on conditions for access to the natural gas transmission networks.
The certification of the transmission companies as independent transmission operators establishes the companies as
reliable and stable partners in the integrated European energy market. This in turn helps to increase their opportunities
for applying and receiving approval for the Bulgarian project proposals for financial assistance under the Connecting
Europe Facility (CEF), as part of the Projects of common interest.
The National Recovery and Resilience Plan (NRRP) envisages a reform for separating the ownership of the two
operators of natural gas and electricity transmission systems (Bulgartransgaz ЕАD and ESO EAD) from the corporate
structure of Bulgarian Energy Holding EAD and their establishment as individual public enterprises, with 100% state-
owned capital and the Ministry of Energy as principal. With a decision of the National Assembly of the Republic of
Bulgaria dated 12.01.2023, the Council of Ministers was obliged to change the National Recovery and Resilience Plan
Annual Separate Activity Report
31 December 2022
25
The business risk is determined by the specificity of the Holding's business and concerns the uncertainty associated
with generating sufficient revenue. There is no business risk for the Company's activity as a whole since the revenue
generated by the Company is mainly from loans and services provided to subsidiaries and dividends.
Cash flows risk
The cash flow risk is related to the uncertainty of cash inflows from an investment and is interrelated to currency risk.
The cash flows of the Company are subject to fluctuations in the amount of expected future cash flows associated with
a monetary financial instrument.
In order to reduce this risk, the Company regularly plans its cash flows and floating rate financial instruments have a
short-term nature with a period of less than one year. In order to achieve greater predictability of the expected cash
inflows, the majority of the loans granted to the companies are with fixed interest rates and annuity installments.
4. Future development, investments, forthcoming significant transactions and other
information under Art. 247 of the Commerce Act
4.1. Future development of Bulgarian Energy Holding EAD
BEH EAD is one of the leading energy companies in the region, with modern management and striving to reap the
benefits of bringing together different in their essence state-owned companies in the energy sector nature.
Independent transmission operators
In implementation of the requirements of the European Union (EU), full compliance with the requirements of the
Third Energy Liberalization Package on the Independent Transmission Operator model has been achieved. In 2014
the restructuring of NEK EAD and ESO EAD was successfully completed. The Energy Act endorsed the separation
of the gas and electricity transmission and distribution system operators and their differentiation into operationally
independent companies. There was expansion of the controlling powers of the Energy and Water Regulatory
Commission (EWRC), which certifies the gas and electricity transmission system operators for compliance with the
independence requirements, monitors their compliance and sends the relevant notifications to the European
Commission.
In 2015, the two transmission operators of BEH EAD, respectively for electricity – ESO EAD, and for natural gas –
Bulgartransgaz EAD, were certified by EWRC as independent transmission operators. The Commission concluded
that the companies have fulfilled all the criteria and have responded to all the requirements reflected in Chapter Eight
“a” of the Energy Act of the Republic of Bulgaria, Directive 2009/72/EC of the European Parliament and of the
Council of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive
2003/54/EC, and Regulation (EC) No 714/2009 of the European Parliament and of the Council of 13 July 2009 on
conditions for access to the network for cross-border exchanges in electricity and repealing Regulation (EC) No
1228/2003, and Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009 concerning
common rules for the internal market in natural gas, Regulation (EC) No 715/2009 of the European Parliament and of
the Council of 13 July 2009 on conditions for access to the natural gas transmission networks.
The certification of the transmission companies as independent transmission operators establishes the companies as
reliable and stable partners in the integrated European energy market. This in turn helps to increase their opportunities
for applying and receiving approval for the Bulgarian project proposals for financial assistance under the Connecting
Europe Facility (CEF), as part of the Projects of common interest.
The National Recovery and Resilience Plan (NRRP) envisages a reform for separating the ownership of the two
operators of natural gas and electricity transmission systems (Bulgartransgaz ЕАD and ESO EAD) from the corporate
structure of Bulgarian Energy Holding EAD and their establishment as individual public enterprises, with 100% state-
owned capital and the Ministry of Energy as principal. With a decision of the National Assembly of the Republic of
Bulgaria dated 12.01.2023, the Council of Ministers was obliged to change the National Recovery and Resilience Plan
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
26
in its Energy sector, as the reform related to the separation of the ownership of the two operators from the corporate
structure of Bulgarian Energy Holding EAD is about to be repealed.
Reform of the electricity market
Due to their specific nature, the majority of the subsidiaries of BEH EAD perform their activities under the conditions
of a hybrid energy market, consisting of a regulated and unregulated (free) market segment.
The process of liberalization of the electricity market in Bulgaria is still ongoing. Since 1 July 2021, the wholesale
electricity market in the country is completely liberalized and all non-household consumers switched from a regulated
to a free market. The consumers who have not still chosen an electricity supplier until 30 June 2021 are served by a
supplier of last resort (the electricity distribution companies and NEK EAD).
The complete liberalization of the electricity market is planned for 2025. As a part of the liberalization of the retail
market in Bulgaria covering household consumers, it is expected that from July 2023 NEK`s role as a public supplier
to be abolished. In its capacity of a single public supplier, NEK EAD resales the bought energy from the regulated
segment to end suppliers under regulated prices set by EWRC. For the period July 2023-2025, the households shall
continue buying electricity under regulated prices from the end suppliers, which shall buy electricity on the free
market. In this context, prior to the realization of the complete market liberalization, steps have to be undertaken for
defining the energy-poor consumers and for developing adequate mechanisms for their support.
With the amendments to the Amendments and Supplements to the EA, prom. SG, no. 9 of 2021 created the necessary
regulatory prerequisites for the actual participation of producers of renewable energy and WEKP with sites with a
total installed electrical capacity of 500 kW to 1 MW on an organized exchange and balancing electricity market. The
amendments to the Rules for Trade in Electricity PTEE (amended and supplemented, SG No. 110 of 24 December
2021) regulated clear rules and conditions for the participation of these producers in the electricity exchange. Another
important change adapted to the PTEE was the abolition of merging standard and / or combined balancing groups
through a common financial settlement. This aims to facilitate and simplify the work of the independent transmission
operator in the administration of balancing groups, as well as to overcome the complex and often controversial
relationships within such associations. The amendments to the PTEE eliminate the existing in practice controversial
points and ambiguities regarding the rules for supply from a supplier of last resort, regulating the conditions and
manner of initial registration on the market at freely negotiated producer prices, as well as the transfer of balancing
group members from an existing coordinator to a new one, in the case of transformation and transfer of a commercial
enterprise to an existing coordinator.
In compliance with Directive (ЕU) 2018/2001 of the European Parliament and of the Council of 11 December 2018
on the promotion of the use of energy from renewable sources, and in compliance with a measure from the National
Recovery and Resilience Plan, the Law Supplementing the Energy from Renewable Sources Act (ERSA) was
promulgated in State Gazette, issue 42 of 07.06.2022. Supplements to the ERSA and the Spatial Planning Act (SPA)
were also adopted on 07.06.2022. These supplements introduced a significantly facilitated process for building
facilities for the production of renewable energy sources (RES) for own consumption. There is no longer a procedure
for preliminary research on the conditions for joining and issuing an opinion on the client's joining as a producer to
the respective power network. Instead, only a notification regime is implemented. Furthermore, the SPA stipulates
that there is no need for an approved investment design for the issuance of a building lease for the new facility, and
there is also no requirement for putting the regime into operation.
With amendments to the Energy Act (promulgated in the State Gazette, issue 9 of 2021, in force as of 02.02.2012),
the transactions for the purchase of cold reserve to ensure the security of the electricity system were dropped. This
objective will be achieved through the conclusion of competitive bidding deals for the availability of additional
services, namely participation in primary frequency regulation, automatic secondary regulation, and manual secondary
regulation of frequency, as well as exchange capacity, in accordance with the provisions of Commission Regulation
(EC) 2017/1485 of 2 August 2017, establishing guidelines for the operation of the electricity transmission system.
According to the cited Regulation, each transmission system operator manages its control area with sufficient reserves
to increase and decrease active power, allowing it to deal with imbalances caused by supply and demand mismatches
and emergencies in its control area. The legal changes were brought in line with the Regulation, explicitly stipulating
that the operator provides the necessary reserves by concluding contracts for additional services on a market basis
Annual Separate Activity Report
31 December 2022
26
in its Energy sector, as the reform related to the separation of the ownership of the two operators from the corporate
structure of Bulgarian Energy Holding EAD is about to be repealed.
Reform of the electricity market
Due to their specific nature, the majority of the subsidiaries of BEH EAD perform their activities under the conditions
of a hybrid energy market, consisting of a regulated and unregulated (free) market segment.
The process of liberalization of the electricity market in Bulgaria is still ongoing. Since 1 July 2021, the wholesale
electricity market in the country is completely liberalized and all non-household consumers switched from a regulated
to a free market. The consumers who have not still chosen an electricity supplier until 30 June 2021 are served by a
supplier of last resort (the electricity distribution companies and NEK EAD).
The complete liberalization of the electricity market is planned for 2025. As a part of the liberalization of the retail
market in Bulgaria covering household consumers, it is expected that from July 2023 NEK`s role as a public supplier
to be abolished. In its capacity of a single public supplier, NEK EAD resales the bought energy from the regulated
segment to end suppliers under regulated prices set by EWRC. For the period July 2023-2025, the households shall
continue buying electricity under regulated prices from the end suppliers, which shall buy electricity on the free
market. In this context, prior to the realization of the complete market liberalization, steps have to be undertaken for
defining the energy-poor consumers and for developing adequate mechanisms for their support.
With the amendments to the Amendments and Supplements to the EA, prom. SG, no. 9 of 2021 created the necessary
regulatory prerequisites for the actual participation of producers of renewable energy and WEKP with sites with a
total installed electrical capacity of 500 kW to 1 MW on an organized exchange and balancing electricity market. The
amendments to the Rules for Trade in Electricity PTEE (amended and supplemented, SG No. 110 of 24 December
2021) regulated clear rules and conditions for the participation of these producers in the electricity exchange. Another
important change adapted to the PTEE was the abolition of merging standard and / or combined balancing groups
through a common financial settlement. This aims to facilitate and simplify the work of the independent transmission
operator in the administration of balancing groups, as well as to overcome the complex and often controversial
relationships within such associations. The amendments to the PTEE eliminate the existing in practice controversial
points and ambiguities regarding the rules for supply from a supplier of last resort, regulating the conditions and
manner of initial registration on the market at freely negotiated producer prices, as well as the transfer of balancing
group members from an existing coordinator to a new one, in the case of transformation and transfer of a commercial
enterprise to an existing coordinator.
In compliance with Directive (ЕU) 2018/2001 of the European Parliament and of the Council of 11 December 2018
on the promotion of the use of energy from renewable sources, and in compliance with a measure from the National
Recovery and Resilience Plan, the Law Supplementing the Energy from Renewable Sources Act (ERSA) was
promulgated in State Gazette, issue 42 of 07.06.2022. Supplements to the ERSA and the Spatial Planning Act (SPA)
were also adopted on 07.06.2022. These supplements introduced a significantly facilitated process for building
facilities for the production of renewable energy sources (RES) for own consumption. There is no longer a procedure
for preliminary research on the conditions for joining and issuing an opinion on the client's joining as a producer to
the respective power network. Instead, only a notification regime is implemented. Furthermore, the SPA stipulates
that there is no need for an approved investment design for the issuance of a building lease for the new facility, and
there is also no requirement for putting the regime into operation.
With amendments to the Energy Act (promulgated in the State Gazette, issue 9 of 2021, in force as of 02.02.2012),
the transactions for the purchase of cold reserve to ensure the security of the electricity system were dropped. This
objective will be achieved through the conclusion of competitive bidding deals for the availability of additional
services, namely participation in primary frequency regulation, automatic secondary regulation, and manual secondary
regulation of frequency, as well as exchange capacity, in accordance with the provisions of Commission Regulation
(EC) 2017/1485 of 2 August 2017, establishing guidelines for the operation of the electricity transmission system.
According to the cited Regulation, each transmission system operator manages its control area with sufficient reserves
to increase and decrease active power, allowing it to deal with imbalances caused by supply and demand mismatches
and emergencies in its control area. The legal changes were brought in line with the Regulation, explicitly stipulating
that the operator provides the necessary reserves by concluding contracts for additional services on a market basis
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
27
through a tender. ESO EAD has developed tender rules and an electronic platform for conducting electronic tenders
related to the provision of initial frequency regulation, automated and manual secondary frequency regulation, and
exchange capacities. The tender procedures are open to all producers, consumers, and aggregators who have
successfully passed the respective tests for the different kinds of reserves, namely initial frequency regulation activated
within 30 seconds, and secondary automated and manual frequency regulation, as well as exchange capacities,
activated within 15 minutes. These reserves can only be provided from capacities with quick synchronization to the
electricity system, such as HPP, and from thermal capacities that are operational, not non-operational ones.
The process of integrating the Bulgarian electricity market into the Single European market began in November 2019
with the successful establishment of the alliance called "Single Intraday Coupling" (SIDC) at the Bulgarian-Romanian
border. This initial market alliance was implemented as part of the local project LIP, which was part of the second
wave and included a total of nine borders of Romania, Hungary, Croatia, Slovenia, Czech Republic, and Poland.
In 2021, a significant milestone was achieved in the integration of the Bulgarian market into the main market segment,
known as the "Day Ahead" market, through the successful launch on 11 May 2021 of the market alliance at the
Bulgarian-Greek border. This accomplishment was realized as part of the regional project IBWT, which aimed to
establish market alliances at the Italian borders. On 28 October 2021, the Bulgarian Independent Energy Exchange
(IBEX) successfully commenced operations as part of the unified market on the Romanian border within the
framework of the single European market "Day Ahead". The successful unification is the outcome of close cooperation
between Bulgarian and Romanian stock exchange operators, electricity system operators, and energy regulators from
both countries. With the inclusion of the Bulgarian-Romanian border, the Southeast Europe (SEE) region is now fully
integrated into the Day Forward market within the European Union.
The completed market integration enables the simultaneous calculation of electricity prices and cross-border flows
across Europe. The efficient utilization of the energy system and cross-border interconnectors, resulting from
enhanced coordination between energy markets, adds value and benefits all market participants. The integration of
the border between the market zones of Bulgaria and Romania into the single day market is a significant achievement
in the implementation of the European target model. In addition to the interconnector between Greece and Italy, the
Day Forward markets in Greece and Bulgaria are already connected to the European market and to the north via the
Bulgarian-Romanian border.
On 29 November 2022, Bulgaria successfully finalized the integration of its electricity market into the Single
European market by launching the market alliance called "Intra-Day Market" at the Bulgarian-Greek border, as part
of the fourth wave of market integration. This alliance, realized within the framework of the local project LIP 14,
contributes to the integration of Greece into the common European market in the "Intra-Day Market" segment. As
part of the fourth wave, Slovakia also joins the common European "Intra-Day Market." The "Intra-Day Market"
alliance now covers electricity trading in 24 countries of the European Union, including Bulgaria.
With the integration of the Bulgarian-Greek border into the Intra-Day Market, our country is now fully connected to
neighboring EU member states in all short-term market segments of the European single market for electricity.
The complete liberalization of the market, especially the unification of the Bulgarian electricity market with the single
European market, will lead to a partial convergence of prices in Bulgaria with those of neighboring countries. The
expected introduction of "green tariffs" on production from countries outside the EU, which do not adhere to the high
environmental standards of the community, will have a positive impact on the activities of companies. This measure
will help limit the process of carbon leakage. Consequently, this implies higher revenues for producers in the country
and increased demand for electricity, resulting in growth in electricity sales by subsidiaries within the BEH Group.
Given the EU's policy of transitioning to a low-carbon economy and the high share of coal in Bulgaria's energy mix,
this transition will require higher levels of investment and active measures in the social sphere. Therefore, it is crucial
to provide the necessary financial resources and flexibility to ensure a smooth transition at the EU level. To achieve a
fair transition, active involvement of citizens and regions most affected by the transition is essential. Providing
incentives for their active participation in the reforms is a guarantee of their success.
The impact on the energy system of transitioning to a carbon-neutral economy will be analyzed to assess the potential
for replacement capacity while ensuring the country's energy security. In line with this objective, the National
Recovery and Resilience Plan of Bulgaria includes the establishment of a Commission for Energy Transition with
Annual Separate Activity Report
31 December 2022
27
through a tender. ESO EAD has developed tender rules and an electronic platform for conducting electronic tenders
related to the provision of initial frequency regulation, automated and manual secondary frequency regulation, and
exchange capacities. The tender procedures are open to all producers, consumers, and aggregators who have
successfully passed the respective tests for the different kinds of reserves, namely initial frequency regulation activated
within 30 seconds, and secondary automated and manual frequency regulation, as well as exchange capacities,
activated within 15 minutes. These reserves can only be provided from capacities with quick synchronization to the
electricity system, such as HPP, and from thermal capacities that are operational, not non-operational ones.
The process of integrating the Bulgarian electricity market into the Single European market began in November 2019
with the successful establishment of the alliance called "Single Intraday Coupling" (SIDC) at the Bulgarian-Romanian
border. This initial market alliance was implemented as part of the local project LIP, which was part of the second
wave and included a total of nine borders of Romania, Hungary, Croatia, Slovenia, Czech Republic, and Poland.
In 2021, a significant milestone was achieved in the integration of the Bulgarian market into the main market segment,
known as the "Day Ahead" market, through the successful launch on 11 May 2021 of the market alliance at the
Bulgarian-Greek border. This accomplishment was realized as part of the regional project IBWT, which aimed to
establish market alliances at the Italian borders. On 28 October 2021, the Bulgarian Independent Energy Exchange
(IBEX) successfully commenced operations as part of the unified market on the Romanian border within the
framework of the single European market "Day Ahead". The successful unification is the outcome of close cooperation
between Bulgarian and Romanian stock exchange operators, electricity system operators, and energy regulators from
both countries. With the inclusion of the Bulgarian-Romanian border, the Southeast Europe (SEE) region is now fully
integrated into the Day Forward market within the European Union.
The completed market integration enables the simultaneous calculation of electricity prices and cross-border flows
across Europe. The efficient utilization of the energy system and cross-border interconnectors, resulting from
enhanced coordination between energy markets, adds value and benefits all market participants. The integration of
the border between the market zones of Bulgaria and Romania into the single day market is a significant achievement
in the implementation of the European target model. In addition to the interconnector between Greece and Italy, the
Day Forward markets in Greece and Bulgaria are already connected to the European market and to the north via the
Bulgarian-Romanian border.
On 29 November 2022, Bulgaria successfully finalized the integration of its electricity market into the Single
European market by launching the market alliance called "Intra-Day Market" at the Bulgarian-Greek border, as part
of the fourth wave of market integration. This alliance, realized within the framework of the local project LIP 14,
contributes to the integration of Greece into the common European market in the "Intra-Day Market" segment. As
part of the fourth wave, Slovakia also joins the common European "Intra-Day Market." The "Intra-Day Market"
alliance now covers electricity trading in 24 countries of the European Union, including Bulgaria.
With the integration of the Bulgarian-Greek border into the Intra-Day Market, our country is now fully connected to
neighboring EU member states in all short-term market segments of the European single market for electricity.
The complete liberalization of the market, especially the unification of the Bulgarian electricity market with the single
European market, will lead to a partial convergence of prices in Bulgaria with those of neighboring countries. The
expected introduction of "green tariffs" on production from countries outside the EU, which do not adhere to the high
environmental standards of the community, will have a positive impact on the activities of companies. This measure
will help limit the process of carbon leakage. Consequently, this implies higher revenues for producers in the country
and increased demand for electricity, resulting in growth in electricity sales by subsidiaries within the BEH Group.
Given the EU's policy of transitioning to a low-carbon economy and the high share of coal in Bulgaria's energy mix,
this transition will require higher levels of investment and active measures in the social sphere. Therefore, it is crucial
to provide the necessary financial resources and flexibility to ensure a smooth transition at the EU level. To achieve a
fair transition, active involvement of citizens and regions most affected by the transition is essential. Providing
incentives for their active participation in the reforms is a guarantee of their success.
The impact on the energy system of transitioning to a carbon-neutral economy will be analyzed to assess the potential
for replacement capacity while ensuring the country's energy security. In line with this objective, the National
Recovery and Resilience Plan of Bulgaria includes the establishment of a Commission for Energy Transition with
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
28
broad stakeholder participation. This commission will develop scenarios for energy decarbonization and a roadmap
towards climate neutrality.
The National Recovery and Resilience Plan of Bulgaria includes Reform 10: Decarbonization of the energy sector. It
aims to reduce carbon emissions from electricity production by 40% based on reference levels from 2019, to be
achieved by 2025 (measured and confirmed by data in 2026). However, a subsequent decision by the National
Assembly on 12.01.2023 obliged the Council of Ministers to undertake actions to renegotiate the plan, and the
aforementioned target for reducing carbon emissions is expected to be repealed. In the Strategic Vision for the
Development of the Electricity Sector in the Republic of Bulgaria 2023-2025, this goal is considered non-realistic and
challenging to achieve given the current situation and the trends in electricity price levels in the energy markets.
Reform of the natural gas market
In January 2019, Bulgartransgaz EAD established its subsidiary, Balkan Gas Hub EAD (BGH EAD), as the first step
in implementing the concept of constructing a gas distribution center in Bulgaria. Balkan Gas Hub EAD operates
trading platforms to serve the natural gas markets within the Balkan Gas Hub. Through its physical infrastructure, the
company provides the necessary conditions for establishing the first liquid physical and commercial gas hub in the
Southeast Europe region, based in Bulgaria.
Amendments to the Energy Act were adopted in 2019 with the aim of creating conditions for market demonopolization
and establishing a liquid natural gas exchange market. These amendments include measures to overcome the current
low liquidity in the market. The changes allow natural gas traders to conduct transactions in one centralized place,
providing benefits to all market participants. The introduction of stock exchange trading is one of the primary
prerequisites for creating a competitive environment for mining companies, traders, and consumers of natural gas.
These changes also create market opportunities for market makers and liquidity providers.
Bulgargaz EAD will play a central role in this process. The Energy Act also outlines a gradual increase in the quantities
of natural gas that the public provider, Bulgargaz EAD, should sell on the organized stock exchange. The minimum
quantity to be sold on the exchange is specified as follows:
1. 2,220 GWh in 2020;
2. 4,281 GWh in 2021;
3. 6,342 GWh in 2022;
4. 8,720 GWh in 2023;
5. 11,099 GWh in 2024.
Until the end of 2022, these quantities were offered for sale on behalf of Bulgargaz EAD, in compliance with
conditions and under an agreement approved by the EWRC for the implementation of the Natural Gas Release
Programme executed between the operators on the organized stock market of natural gas (Balkan Gas Hub EAD, a
subsidiary of Bulgartransgaz EAD) and the public supplier (Bulgargaz EAD). However, by a decision of the National
Assembly, promulgated in State Gazette, issue 99 of 13.12.2022, the obligation of the public supplier, Bulgargaz
EAD, to sell natural gas quantities on an organized stock market was repealed. This change in the Energy Act has
delayed the liberalization of the gas sector in Bulgaria by a minimum of two years. Starting from January 2023,
Bulgargaz EAD does not include costs for the implementation of the Natural Gas Release Programme in its
applications to the EWRC.
The arguments for suspending the implementation of the Natural Gas Release Programme are that the programme
cannot fulfill its goals, which are to contribute to raising competition and progress in the liberalization process. On
the contrary, it establishes prerequisites for natural gas shortages and higher prices for other clients of the public
supplier. Another argument is that the implementation of the executed contracts for the delivery of the released
quantities, in their present form, leads to a distortion of the natural gas market due to non-market pricing. This includes
creating an opportunity for traders who have bought released quantities at a lower price to sell them back to Bulgargaz
EAD at significantly higher prices through the exchange.
In addition to the reforms adopted in the internal gas market, on 29 June 2022, the EU passed Regulation (EU)
2022/1032, which obliges all EU members to fill their gas storages to at least 80% of their capacity by 01.11.2022.
Annual Separate Activity Report
31 December 2022
28
broad stakeholder participation. This commission will develop scenarios for energy decarbonization and a roadmap
towards climate neutrality.
The National Recovery and Resilience Plan of Bulgaria includes Reform 10: Decarbonization of the energy sector. It
aims to reduce carbon emissions from electricity production by 40% based on reference levels from 2019, to be
achieved by 2025 (measured and confirmed by data in 2026). However, a subsequent decision by the National
Assembly on 12.01.2023 obliged the Council of Ministers to undertake actions to renegotiate the plan, and the
aforementioned target for reducing carbon emissions is expected to be repealed. In the Strategic Vision for the
Development of the Electricity Sector in the Republic of Bulgaria 2023-2025, this goal is considered non-realistic and
challenging to achieve given the current situation and the trends in electricity price levels in the energy markets.
Reform of the natural gas market
In January 2019, Bulgartransgaz EAD established its subsidiary, Balkan Gas Hub EAD (BGH EAD), as the first step
in implementing the concept of constructing a gas distribution center in Bulgaria. Balkan Gas Hub EAD operates
trading platforms to serve the natural gas markets within the Balkan Gas Hub. Through its physical infrastructure, the
company provides the necessary conditions for establishing the first liquid physical and commercial gas hub in the
Southeast Europe region, based in Bulgaria.
Amendments to the Energy Act were adopted in 2019 with the aim of creating conditions for market demonopolization
and establishing a liquid natural gas exchange market. These amendments include measures to overcome the current
low liquidity in the market. The changes allow natural gas traders to conduct transactions in one centralized place,
providing benefits to all market participants. The introduction of stock exchange trading is one of the primary
prerequisites for creating a competitive environment for mining companies, traders, and consumers of natural gas.
These changes also create market opportunities for market makers and liquidity providers.
Bulgargaz EAD will play a central role in this process. The Energy Act also outlines a gradual increase in the quantities
of natural gas that the public provider, Bulgargaz EAD, should sell on the organized stock exchange. The minimum
quantity to be sold on the exchange is specified as follows:
1. 2,220 GWh in 2020;
2. 4,281 GWh in 2021;
3. 6,342 GWh in 2022;
4. 8,720 GWh in 2023;
5. 11,099 GWh in 2024.
Until the end of 2022, these quantities were offered for sale on behalf of Bulgargaz EAD, in compliance with
conditions and under an agreement approved by the EWRC for the implementation of the Natural Gas Release
Programme executed between the operators on the organized stock market of natural gas (Balkan Gas Hub EAD, a
subsidiary of Bulgartransgaz EAD) and the public supplier (Bulgargaz EAD). However, by a decision of the National
Assembly, promulgated in State Gazette, issue 99 of 13.12.2022, the obligation of the public supplier, Bulgargaz
EAD, to sell natural gas quantities on an organized stock market was repealed. This change in the Energy Act has
delayed the liberalization of the gas sector in Bulgaria by a minimum of two years. Starting from January 2023,
Bulgargaz EAD does not include costs for the implementation of the Natural Gas Release Programme in its
applications to the EWRC.
The arguments for suspending the implementation of the Natural Gas Release Programme are that the programme
cannot fulfill its goals, which are to contribute to raising competition and progress in the liberalization process. On
the contrary, it establishes prerequisites for natural gas shortages and higher prices for other clients of the public
supplier. Another argument is that the implementation of the executed contracts for the delivery of the released
quantities, in their present form, leads to a distortion of the natural gas market due to non-market pricing. This includes
creating an opportunity for traders who have bought released quantities at a lower price to sell them back to Bulgargaz
EAD at significantly higher prices through the exchange.
In addition to the reforms adopted in the internal gas market, on 29 June 2022, the EU passed Regulation (EU)
2022/1032, which obliges all EU members to fill their gas storages to at least 80% of their capacity by 01.11.2022.
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
29
To fulfill Bulgaria's commitment to injecting the underground gas storage Chiren, Bulgargaz EAD bought the required
quantities of natural gas, and as of 01.11.2022, the gas storage was filled to approximately 90%.
Measures, undertaken for replacing the suspended natural gas supplies from OOO Gazprom Export
In April 2022, OOO Gazprom Export unilaterally terminated natural gas supplies to Bulgaria. These actions by the
Russian side accelerated the process of diversifying natural gas supplies for the country. The diversification efforts
began with the conclusion of a 25-year contract for the delivery of 1 billion m 3 (approximately 1/3 of Bulgaria's annual
consumption) of natural gas from the Azeri state oil company, SOCAR. In early October, with the launch of the
Interconnector Greece-Bulgaria, the country began receiving the full volumes of natural gas under the contract with
the Azeri company.
To compensate for the remaining part of the country’ s annual consumption, Bulgargaz EAD reserved capacity at the
two Greek liquefied natural gas terminals: Revithoussa and Alexandroupolis. Gas supplies through Revithoussa
started in June 2022 when the first two tankers of liquefied natural gas for Bulgaria were delivered. In September
2022, Bulgargaz EAD signed an agreement with Gastrade S.A., supplementing the initial agreement for the use of the
Alexandroupolis LNG terminal. The reserved capacity was increased to 1 billion m 3 annually (10,600,000 MWh per
year) for a period of 10 years from the year of the terminal’ s commercial operation. This will enable gas traders and
users in the region to fully benefit from the dynamic development and competitive advantages provided by the
liquefied natural gas market. The gas supply sources could come from various parts of the world, and participants in
the tenders are expected to Include countries from the Caspian region, Cyprus, Qatar, Egypt, Israel, the USA, etc.
To ensure further natural gas quantities to meet the country’ s consumption needs, Bulgargaz EAD announced
transparent and non-discriminatory tenders for short-term (2023) and long-term deliveries (2024-2034) of liquefied
natural gas at the end of 2022. These tenders fall within the total reserved capacity of the terminal, and the purchase
prices are competitive compared to most liquefied natural gas hubs worldwide.
The objectives of BEH EAD are focused in the following main directions and priority areas:
Financial sustainability of BEH Group and the electricity sector in the country • Providing funding for key activities and projects:
✓ Effective management of financial assets and instruments;
✓ Participation in capital markets to attract external financing from international financial institutions under
competitive terms;
✓ Utilization of the advantages arising from the holding structure's scale (economies of scale);
✓ Support to independent transmission operators in negotiating the necessary credit resources to finance
projects of particular importance to the companies, in the context of climate change mitigation and
sustainable development of the low-carbon economy. • Cost optimization in BEH Group
✓ Forecasting and planning the costs of BEH Group;
✓ Ensuring transparency and predictability of costs;
✓ Increasing the efficiency of the activities;
Elimination of deficits in BEH Group:
✓ Monitoring and controlling the amount of the generated tariff deficit.
✓ Providing cooperation and support to the Ministry of Energy, EWRC, and the Energy Commission in
developing legal and regulatory changes related to sector reform and compensation for the generated tariff
deficits in the system.
Annual Separate Activity Report
31 December 2022
29
To fulfill Bulgaria's commitment to injecting the underground gas storage Chiren, Bulgargaz EAD bought the required
quantities of natural gas, and as of 01.11.2022, the gas storage was filled to approximately 90%.
Measures, undertaken for replacing the suspended natural gas supplies from OOO Gazprom Export
In April 2022, OOO Gazprom Export unilaterally terminated natural gas supplies to Bulgaria. These actions by the
Russian side accelerated the process of diversifying natural gas supplies for the country. The diversification efforts
began with the conclusion of a 25-year contract for the delivery of 1 billion m 3 (approximately 1/3 of Bulgaria's annual
consumption) of natural gas from the Azeri state oil company, SOCAR. In early October, with the launch of the
Interconnector Greece-Bulgaria, the country began receiving the full volumes of natural gas under the contract with
the Azeri company.
To compensate for the remaining part of the country’ s annual consumption, Bulgargaz EAD reserved capacity at the
two Greek liquefied natural gas terminals: Revithoussa and Alexandroupolis. Gas supplies through Revithoussa
started in June 2022 when the first two tankers of liquefied natural gas for Bulgaria were delivered. In September
2022, Bulgargaz EAD signed an agreement with Gastrade S.A., supplementing the initial agreement for the use of the
Alexandroupolis LNG terminal. The reserved capacity was increased to 1 billion m 3 annually (10,600,000 MWh per
year) for a period of 10 years from the year of the terminal’ s commercial operation. This will enable gas traders and
users in the region to fully benefit from the dynamic development and competitive advantages provided by the
liquefied natural gas market. The gas supply sources could come from various parts of the world, and participants in
the tenders are expected to Include countries from the Caspian region, Cyprus, Qatar, Egypt, Israel, the USA, etc.
To ensure further natural gas quantities to meet the country’ s consumption needs, Bulgargaz EAD announced
transparent and non-discriminatory tenders for short-term (2023) and long-term deliveries (2024-2034) of liquefied
natural gas at the end of 2022. These tenders fall within the total reserved capacity of the terminal, and the purchase
prices are competitive compared to most liquefied natural gas hubs worldwide.
The objectives of BEH EAD are focused in the following main directions and priority areas:
Financial sustainability of BEH Group and the electricity sector in the country • Providing funding for key activities and projects:
✓ Effective management of financial assets and instruments;
✓ Participation in capital markets to attract external financing from international financial institutions under
competitive terms;
✓ Utilization of the advantages arising from the holding structure's scale (economies of scale);
✓ Support to independent transmission operators in negotiating the necessary credit resources to finance
projects of particular importance to the companies, in the context of climate change mitigation and
sustainable development of the low-carbon economy. • Cost optimization in BEH Group
✓ Forecasting and planning the costs of BEH Group;
✓ Ensuring transparency and predictability of costs;
✓ Increasing the efficiency of the activities;
Elimination of deficits in BEH Group:
✓ Monitoring and controlling the amount of the generated tariff deficit.
✓ Providing cooperation and support to the Ministry of Energy, EWRC, and the Energy Commission in
developing legal and regulatory changes related to sector reform and compensation for the generated tariff
deficits in the system.
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
30
Ensuring the security of the energy system
Projects • Diversification of sources:
✓ Projects aimed at guaranteeing natural gas supplies through new sources, with the goal of achieving
independence by ensuring multiple natural gas sources;
✓ Main current investment projects in this area – Gas interconnector Greece-Bulgaria. • Diversification of routes:
✓ Projects aimed at eliminating the risk of relying on a single route for natural gas imports and optimizing
the use of existing gas transmission routes.
✓ Implementation of the concept for development of a regional gas hub on the territory of Bulgaria
✓ Bulgaria's shareholding, through Bulgartransgaz EAD, in the new FSRU liquefied natural gas terminal
(LNG terminal) near Alexandroupolis, Greece.
✓ Reservation of capacity by Bulgargaz EAD from the liquefied natural gas terminal in the city of
Alexandroupolis, Hellenic Republic.
✓ Ensuring capacity for re- gasification and storage of liquefied natural gas to terminals in Türkiye. • Security, reliability, and continuity of the gas supplies
✓ Expansion of Chiren Underground Gas Storage (UGS). • Extending the life of the capacities guaranteeing the security of the system, combined with ensuring long-
term profitability.
✓ Projects aimed at extending the useful life of key capacities in the energy system, contributing to secure
electricity supply, energy system balance, and increasing the value of the services offered.
✓ Main current projects in this direction include: ensuring the long-term operation of the 5th and 6th nuclear
power units beyond their design lifespan for the next 30 years and implementing measures to operate the
units at increased capacity; rehabilitating hydropower capacities, expanding production capacity, and
modernizing facilities to ensure the long-term and efficient operation of our country ’ s hydropower
resources.
✓ Diversification of fresh nuclear fuel supplies. • Regional and European interconnection of the systems.
✓ Projects aimed at optimal connection of the Bulgarian market with regional and European markets,
fulfilling the fundamental European goals of market unification and enhancing energy security.
✓ Main ongoing projects in this area include: gas interconnectors linking Bulgaria with neighboring countries,
such as the Bulgaria-Serbia interconnector, the Bulgaria-Northern Macedonia interconnector, and the
potential for additional interconnectors in this direction. Expansion and capacity increase of the electricity
transmission network, enhancing cross-border capacity between regional countries, and digital
transformation of electricity transmission network management systems.
Liberalization of the electrical power market:
✓ Active participation on:
o electricity exchange market, segment "D ay ahead” market
Annual Separate Activity Report
31 December 2022
30
Ensuring the security of the energy system
Projects • Diversification of sources:
✓ Projects aimed at guaranteeing natural gas supplies through new sources, with the goal of achieving
independence by ensuring multiple natural gas sources;
✓ Main current investment projects in this area – Gas interconnector Greece-Bulgaria. • Diversification of routes:
✓ Projects aimed at eliminating the risk of relying on a single route for natural gas imports and optimizing
the use of existing gas transmission routes.
✓ Implementation of the concept for development of a regional gas hub on the territory of Bulgaria
✓ Bulgaria's shareholding, through Bulgartransgaz EAD, in the new FSRU liquefied natural gas terminal
(LNG terminal) near Alexandroupolis, Greece.
✓ Reservation of capacity by Bulgargaz EAD from the liquefied natural gas terminal in the city of
Alexandroupolis, Hellenic Republic.
✓ Ensuring capacity for re- gasification and storage of liquefied natural gas to terminals in Türkiye. • Security, reliability, and continuity of the gas supplies
✓ Expansion of Chiren Underground Gas Storage (UGS). • Extending the life of the capacities guaranteeing the security of the system, combined with ensuring long-
term profitability.
✓ Projects aimed at extending the useful life of key capacities in the energy system, contributing to secure
electricity supply, energy system balance, and increasing the value of the services offered.
✓ Main current projects in this direction include: ensuring the long-term operation of the 5th and 6th nuclear
power units beyond their design lifespan for the next 30 years and implementing measures to operate the
units at increased capacity; rehabilitating hydropower capacities, expanding production capacity, and
modernizing facilities to ensure the long-term and efficient operation of our country ’ s hydropower
resources.
✓ Diversification of fresh nuclear fuel supplies. • Regional and European interconnection of the systems.
✓ Projects aimed at optimal connection of the Bulgarian market with regional and European markets,
fulfilling the fundamental European goals of market unification and enhancing energy security.
✓ Main ongoing projects in this area include: gas interconnectors linking Bulgaria with neighboring countries,
such as the Bulgaria-Serbia interconnector, the Bulgaria-Northern Macedonia interconnector, and the
potential for additional interconnectors in this direction. Expansion and capacity increase of the electricity
transmission network, enhancing cross-border capacity between regional countries, and digital
transformation of electricity transmission network management systems.
Liberalization of the electrical power market:
✓ Active participation on:
o electricity exchange market, segment "D ay ahead” market
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
31
o electricity exchange market, segment for bilateral contracts
o intraday market balancing market
✓ Realization of pilot projects for market alliances in segments "D ay ahead” and "Intraday" with the markets
in Northern Macedonia and Serbia, as next step after the full alliance of the Bulgarian electricity market
with the Single European market (fully completed in 2022), which shall raise the effectiveness of the
markets for trade with electricity in the process on the successful implementation of the energy transition.
✓ Implementation of Projects envisaged in the draft of the National Recovery and Resilience Plan:
o “Digital transformation and development of information systems and real-time systems of the
Electricity System Operator in a low- carbon economy.” The aim of the project is complete
modernization of the activities for planning, management and maintenance of the electricity
transmission network of the country through the introduction of modern digital tools and methods to
ensure the necessary maneuverability, security, reliability and speed in managing the power system in
low carbon production. , as a result of the tendency to build renewable sources and intermittent
generation, increase the flexibility of operational management and monitoring of the electricity system.
The total value of the investment is BGN 611 million, of which BGN 370 million, or 60%, is planned
to be financed with European funds provided by the Instrument for Recovery and Sustainability.
✓ Introducing the reforms provided for in the National Recovery and Resilience Plan and the adopted
legislative amendments;
o the role of NEK EAD as a public supplier ceases to exist. The contracts for a long-term purchase of
electricity for Maritsa East 1 (AES) and Maritsa East 3 (Contour Global), expiring respectively in 2024
and 2026, are not planned to continue.
o Liberalization of the retail market of electricity in 2025. The national legislation of the country must
establish the criteria for identification of the households in a situation of energy poverty and vulnerable
consumers. The next important moment is the gradual transition to a liberalized market by repealing
the regulated prices for household consumers in the conditions of a liberalized market of wholesale
electricity and termination by the EWRC of the establishment of energy allowances for delivery on a
regulated market. • Liberalization of the gas market:
✓ Development of a competitive natural gas market in the context of the European goals for building an
interconnected and single pan-European gas market by building a gas distribution center (hub) on the
territory of Bulgaria, which will contribute to:
o maintaining the role of Bulgaria as a major country providing input quantities and trade in natural
gas, as well as cross-border transmission to the region and the EU
o ensuring security of natural gas supply not only for Bulgaria, but also for Europe and the region
o development of the natural gas market in Bulgaria and the region
o providing a suitable market environment for organized trade in natural gas on a market basis.
4.2. Investments
The investment priorities of Bulgarian Energy Holding EAD are focused on the successful construction of the Greece-
Bulgaria gas interconnector.
The total estimated value of the project, from the beginning of its implementation, including the design phase, to the
completion of the construction and commissioning phase, is approximately EUR 240 million. At the beginning of
construction in October 2019, the shareholders' own funds, totaling approximately EUR 42 million, were fully
deposited. In 2022, the entire state-guaranteed loan from the ECB, amounting to EUR 109.9 million, was utilized in
four tranches (the first tranche of EUR 30 million in August 2020, the second tranche of EUR 30 million in January
2021, the third tranche of EUR 30 million in December 2021, and the last tranche of EUR 19.9 million in September
2022). Additionally, the grant from OPIC 2014-2020 in the amount of EUR 39 million was utilized, and approval is
Annual Separate Activity Report
31 December 2022
31
o electricity exchange market, segment for bilateral contracts
o intraday market balancing market
✓ Realization of pilot projects for market alliances in segments "D ay ahead” and "Intraday" with the markets
in Northern Macedonia and Serbia, as next step after the full alliance of the Bulgarian electricity market
with the Single European market (fully completed in 2022), which shall raise the effectiveness of the
markets for trade with electricity in the process on the successful implementation of the energy transition.
✓ Implementation of Projects envisaged in the draft of the National Recovery and Resilience Plan:
o “Digital transformation and development of information systems and real-time systems of the
Electricity System Operator in a low- carbon economy.” The aim of the project is complete
modernization of the activities for planning, management and maintenance of the electricity
transmission network of the country through the introduction of modern digital tools and methods to
ensure the necessary maneuverability, security, reliability and speed in managing the power system in
low carbon production. , as a result of the tendency to build renewable sources and intermittent
generation, increase the flexibility of operational management and monitoring of the electricity system.
The total value of the investment is BGN 611 million, of which BGN 370 million, or 60%, is planned
to be financed with European funds provided by the Instrument for Recovery and Sustainability.
✓ Introducing the reforms provided for in the National Recovery and Resilience Plan and the adopted
legislative amendments;
o the role of NEK EAD as a public supplier ceases to exist. The contracts for a long-term purchase of
electricity for Maritsa East 1 (AES) and Maritsa East 3 (Contour Global), expiring respectively in 2024
and 2026, are not planned to continue.
o Liberalization of the retail market of electricity in 2025. The national legislation of the country must
establish the criteria for identification of the households in a situation of energy poverty and vulnerable
consumers. The next important moment is the gradual transition to a liberalized market by repealing
the regulated prices for household consumers in the conditions of a liberalized market of wholesale
electricity and termination by the EWRC of the establishment of energy allowances for delivery on a
regulated market. • Liberalization of the gas market:
✓ Development of a competitive natural gas market in the context of the European goals for building an
interconnected and single pan-European gas market by building a gas distribution center (hub) on the
territory of Bulgaria, which will contribute to:
o maintaining the role of Bulgaria as a major country providing input quantities and trade in natural
gas, as well as cross-border transmission to the region and the EU
o ensuring security of natural gas supply not only for Bulgaria, but also for Europe and the region
o development of the natural gas market in Bulgaria and the region
o providing a suitable market environment for organized trade in natural gas on a market basis.
4.2. Investments
The investment priorities of Bulgarian Energy Holding EAD are focused on the successful construction of the Greece-
Bulgaria gas interconnector.
The total estimated value of the project, from the beginning of its implementation, including the design phase, to the
completion of the construction and commissioning phase, is approximately EUR 240 million. At the beginning of
construction in October 2019, the shareholders' own funds, totaling approximately EUR 42 million, were fully
deposited. In 2022, the entire state-guaranteed loan from the ECB, amounting to EUR 109.9 million, was utilized in
four tranches (the first tranche of EUR 30 million in August 2020, the second tranche of EUR 30 million in January
2021, the third tranche of EUR 30 million in December 2021, and the last tranche of EUR 19.9 million in September
2022). Additionally, the grant from OPIC 2014-2020 in the amount of EUR 39 million was utilized, and approval is
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
32
expected for the refund of the remaining grants under the European Energy Programme for Recovery, totaling EUR
45 million, of which half has already been utilized.
The Greece-Bulgaria gas interconnector was put into operation on 1 October 2022, and in 2023, it is expected to
complete the finishing activities according to the established stages set by MRDPW, including anti-erosion measures,
a spare cable line, and a servicing road to GMS 2 Stara Zagora. ICGB AD, the certified and licensed network operator,
commenced its transmission activities in October 2022. The company reported its first income based on executed
long-term contracts for transmission with Bulgargaz EAD (related to the implementation of a Contract for the delivery
of 1 billion m 3 per year from the 2nd phase of Shah Deniz in Azerbaijan for a period of 25 years), with the Greek
DEPA for 0.3 billion m 3 per year for a period of 20 years, and with the Italian company Edison for 0.1 billion m 3 per
year for a period of 10 years, as well as contracts with other network users on a short-term basis.
According to the business plan of ICGB AD, Bulgarian Energy Holding EAD is expected to start receiving dividends
from its participation in the project in 2024.
4.3. Forthcoming significant transactions
In relation to the adopted policy by BEH EAD for purchasing greenhouse gas emission allowances and based on a
contract concluded in July 2021 between BEH EAD as the seller and TPP Maritsa East 2 EAD as the buyer, the
holding has purchased EUA-type greenhouse gas emission allowances to ensure production activity in 2021 and 2022.
Under the commitment, the company is obligated to currently purchase greenhouse gas emission allowances upon
receiving an order on behalf of TPP Maritsa East 2 EAD. The purchased allowances will be transferred to the buyer's
account after complete payment by the buyer. The goal is to optimize the costs for carbon emissions by implementing
a competitive principle in their purchase, thus reducing brokerage commissions.
In 2023, Bulgarian Energy Holding EAD shall continue implementing the adopted policy of purchasing carbon
allowances to cover the liabilities of TPP Maritsa East 2 EAD in relation to the emitted carbon emissions from the
power plant. The quantity of allowances, which BEH EAD is in the process of buying in 2023, has to cover the
subsidiary's obligation for the emitted carbon for the current year.
In view of a decision of the National Assembly, promulgated in SG issue 11 of 07.02.2020, regarding the Ministry of
Energy’ s policy on the future of coal-fired power plants in Bulgaria and the implied obligations of the Minister of
Energy to take all necessary measures to prevent the long-term cessation of operation and/or limitation of the
production capacity of coal-fired power plants within the Bulgarian Energy Holding EAD group, the holding will
provide the necessary assistance to implement the decision of the National Assembly of the Republic of Bulgaria.
Following a decision of the National Assembly, promulgated in SG issue 6 of 12.01.2023, the Council of Ministers is
obliged to guarantee the implementation of the commitments for decarbonization in Reform 10 of the National
Recovery and Resilience Plan, in accordance with pan-European goals, by ensuring the operation of the coal-fired
power plants without limitation until at least 2038.
5. Post-reporting date events
No adjusting events or significant non-adjusting events occurred between the reporting date of the financial statements
and the date of their authorization for publication, except for the following:
Change in the Management of Bulgarian Energy Holding EAD
With a protocol decision of 19 January 2023, the Minister of Energy, Zheko Mihailov Zhekov, was dismissed as a
member of the Board of Directors of Bulgarian Energy Holding EAD. He was replaced by Andrey Stefanov Zhivkov
until a new competition procedure was conducted. According to the minutes of the Board of Directors' meeting on 21
January 2023, Andrey Stefanov Zhivkov was selected as the second executive director. The change was registered in
the Commercial Register and Register of Non-Profit Legal Entities at the Registry Agency on 26 January 2023.
With a protocol decision of 19 January 2023, the Minister of Energy, Stelyan Penchev Kolev, was dismissed as a
member of the Board of Directors of Bulgarian Energy Holding EAD. He was replaced by Ivo Ivanov Todorov until
Annual Separate Activity Report
31 December 2022
32
expected for the refund of the remaining grants under the European Energy Programme for Recovery, totaling EUR
45 million, of which half has already been utilized.
The Greece-Bulgaria gas interconnector was put into operation on 1 October 2022, and in 2023, it is expected to
complete the finishing activities according to the established stages set by MRDPW, including anti-erosion measures,
a spare cable line, and a servicing road to GMS 2 Stara Zagora. ICGB AD, the certified and licensed network operator,
commenced its transmission activities in October 2022. The company reported its first income based on executed
long-term contracts for transmission with Bulgargaz EAD (related to the implementation of a Contract for the delivery
of 1 billion m 3 per year from the 2nd phase of Shah Deniz in Azerbaijan for a period of 25 years), with the Greek
DEPA for 0.3 billion m 3 per year for a period of 20 years, and with the Italian company Edison for 0.1 billion m 3 per
year for a period of 10 years, as well as contracts with other network users on a short-term basis.
According to the business plan of ICGB AD, Bulgarian Energy Holding EAD is expected to start receiving dividends
from its participation in the project in 2024.
4.3. Forthcoming significant transactions
In relation to the adopted policy by BEH EAD for purchasing greenhouse gas emission allowances and based on a
contract concluded in July 2021 between BEH EAD as the seller and TPP Maritsa East 2 EAD as the buyer, the
holding has purchased EUA-type greenhouse gas emission allowances to ensure production activity in 2021 and 2022.
Under the commitment, the company is obligated to currently purchase greenhouse gas emission allowances upon
receiving an order on behalf of TPP Maritsa East 2 EAD. The purchased allowances will be transferred to the buyer's
account after complete payment by the buyer. The goal is to optimize the costs for carbon emissions by implementing
a competitive principle in their purchase, thus reducing brokerage commissions.
In 2023, Bulgarian Energy Holding EAD shall continue implementing the adopted policy of purchasing carbon
allowances to cover the liabilities of TPP Maritsa East 2 EAD in relation to the emitted carbon emissions from the
power plant. The quantity of allowances, which BEH EAD is in the process of buying in 2023, has to cover the
subsidiary's obligation for the emitted carbon for the current year.
In view of a decision of the National Assembly, promulgated in SG issue 11 of 07.02.2020, regarding the Ministry of
Energy’ s policy on the future of coal-fired power plants in Bulgaria and the implied obligations of the Minister of
Energy to take all necessary measures to prevent the long-term cessation of operation and/or limitation of the
production capacity of coal-fired power plants within the Bulgarian Energy Holding EAD group, the holding will
provide the necessary assistance to implement the decision of the National Assembly of the Republic of Bulgaria.
Following a decision of the National Assembly, promulgated in SG issue 6 of 12.01.2023, the Council of Ministers is
obliged to guarantee the implementation of the commitments for decarbonization in Reform 10 of the National
Recovery and Resilience Plan, in accordance with pan-European goals, by ensuring the operation of the coal-fired
power plants without limitation until at least 2038.
5. Post-reporting date events
No adjusting events or significant non-adjusting events occurred between the reporting date of the financial statements
and the date of their authorization for publication, except for the following:
Change in the Management of Bulgarian Energy Holding EAD
With a protocol decision of 19 January 2023, the Minister of Energy, Zheko Mihailov Zhekov, was dismissed as a
member of the Board of Directors of Bulgarian Energy Holding EAD. He was replaced by Andrey Stefanov Zhivkov
until a new competition procedure was conducted. According to the minutes of the Board of Directors' meeting on 21
January 2023, Andrey Stefanov Zhivkov was selected as the second executive director. The change was registered in
the Commercial Register and Register of Non-Profit Legal Entities at the Registry Agency on 26 January 2023.
With a protocol decision of 19 January 2023, the Minister of Energy, Stelyan Penchev Kolev, was dismissed as a
member of the Board of Directors of Bulgarian Energy Holding EAD. He was replaced by Ivo Ivanov Todorov until
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
33
a new competition procedure was conducted. The change was registered in the Commercial Register and Register of
Non-Profit Legal Entities at the Registry Agency on 27 January 2023.
With a protocol decision of the Minister of Energy dated 24 April 2023, Anton Georgiev Simeonov, Veselina
Lachezarova Kanatova-Buchkova, Angel Emilov Yankov, Andrey Stefanov Zhivkov, and Ivo Ivanov Todorov were
dismissed as members of the Board of Directors of Bulgarian Energy Holding EAD. As representatives of the State
on the Board of Directors of Bulgarian Energy Holding EAD, Angel Emilov Yankov, Andrey Stefanov Zhivkov, and
Ivo Ivanov Todorov were elected for a period of three years. Veselina Lachezarova Kanatova-Buchkova and Kalin
Boyanov Filipov were elected as independent members for a period of three years.
With a protocol decision of the Board of Directors dated 24 April 2023, Andrey Stefanov Zhivkov was chosen as the
second executive officer. The change was registered in the Commercial Register and Register of Non-Profit Legal
Entities at the Registry Agency on 2 May 2023.
Loan agreements with related parties
In January 2023, the subsidiary TPP Maritsa East 2 EAD made an early repayment of its liability under a loan
agreement dated 6 December 2021, in the amount of BGN 82,189 thousand, thereby completing the contract.
In March 2023, the subsidiary Bulgargaz EAD made an early repayment of its liability under a loan agreement dated
25 February 2022, in the amount of BGN 200,000 thousand, resulting in the termination of the contract.
On 3 April 2023, a loan agreement was concluded between Bulgarian Energy Holding EAD and Bulgargaz EAD in
the form of a credit line for the repayment of liabilities under contracts for natural gas delivery concluded between
Bulgargaz EAD and suppliers under the following conditions:
- Limit: BGN 200,000,000 (two hundred million);
- Validity: 12 months from the date of contract execution;
- Interest rate: 3.275% annually on the utilized amount.
As of the date of the financial statement, the funds have not been utilized.
On 17 February 2023, a loan agreement was concluded between Bulgarian Energy Holding EAD and
Bulgartransgaz ЕАD for the financing of the implementation of a public procurement project named “Spatial planning,
investment design, delivery of necessary materials and equipment, construction, and commissioning of the project:
Capacity extension of Underground Gas Storage Chiren - drilling fund.” initiated with a decisi on dated 8 August 2022.
The conditions of the contract are as follows:
Loan amount (principal): BGN 65,156,525 (sixty-five million, one hundred fifty-six thousand, five hundred
twenty-five);
Utilization period: Up to 6 months from the date of the contract, upon submission of a request;
Grace period for payment of the principal: 24 months from the date of utilizing the respective amount;
Repayment term for the utilized amount: 60 months after the expiration of the grace period for principal
payment;
Interest rate: 3.275% per year.
On 10 March 2023, Bulgartransgaz ЕАD raised a request for further financing in the amount of up to BGN 22,370,675.
This amount represents the difference between the initially provided financial resource under the contract of 17
February 2023 and the offered price from the participant ranked second in the public procurement process. The reason
for the request is the refusal of the participant ranked first to enter into a contract with Bulgartransgaz ЕАD due to the
objective impossibility to implement the activities within the specified timeframe in the draft contract. On 7
April 2023, an annex to the contract was executed and the funds were utilized on 26 April 2023.
Credit rating
On 6 February 2023, Moody's upgraded the credit outlook of Bulgarian Energy Holding EAD from stable to positive,
confirming the Group's long-term rating at Ba1 and the rating of the non-subordinated and non-secured bonds of the
holding at Ва2. The credit rating outlook was upgraded to positive due to improved financial indicators, progres s in
Annual Separate Activity Report
31 December 2022
33
a new competition procedure was conducted. The change was registered in the Commercial Register and Register of
Non-Profit Legal Entities at the Registry Agency on 27 January 2023.
With a protocol decision of the Minister of Energy dated 24 April 2023, Anton Georgiev Simeonov, Veselina
Lachezarova Kanatova-Buchkova, Angel Emilov Yankov, Andrey Stefanov Zhivkov, and Ivo Ivanov Todorov were
dismissed as members of the Board of Directors of Bulgarian Energy Holding EAD. As representatives of the State
on the Board of Directors of Bulgarian Energy Holding EAD, Angel Emilov Yankov, Andrey Stefanov Zhivkov, and
Ivo Ivanov Todorov were elected for a period of three years. Veselina Lachezarova Kanatova-Buchkova and Kalin
Boyanov Filipov were elected as independent members for a period of three years.
With a protocol decision of the Board of Directors dated 24 April 2023, Andrey Stefanov Zhivkov was chosen as the
second executive officer. The change was registered in the Commercial Register and Register of Non-Profit Legal
Entities at the Registry Agency on 2 May 2023.
Loan agreements with related parties
In January 2023, the subsidiary TPP Maritsa East 2 EAD made an early repayment of its liability under a loan
agreement dated 6 December 2021, in the amount of BGN 82,189 thousand, thereby completing the contract.
In March 2023, the subsidiary Bulgargaz EAD made an early repayment of its liability under a loan agreement dated
25 February 2022, in the amount of BGN 200,000 thousand, resulting in the termination of the contract.
On 3 April 2023, a loan agreement was concluded between Bulgarian Energy Holding EAD and Bulgargaz EAD in
the form of a credit line for the repayment of liabilities under contracts for natural gas delivery concluded between
Bulgargaz EAD and suppliers under the following conditions:
- Limit: BGN 200,000,000 (two hundred million);
- Validity: 12 months from the date of contract execution;
- Interest rate: 3.275% annually on the utilized amount.
As of the date of the financial statement, the funds have not been utilized.
On 17 February 2023, a loan agreement was concluded between Bulgarian Energy Holding EAD and
Bulgartransgaz ЕАD for the financing of the implementation of a public procurement project named “Spatial planning,
investment design, delivery of necessary materials and equipment, construction, and commissioning of the project:
Capacity extension of Underground Gas Storage Chiren - drilling fund.” initiated with a decisi on dated 8 August 2022.
The conditions of the contract are as follows:
Loan amount (principal): BGN 65,156,525 (sixty-five million, one hundred fifty-six thousand, five hundred
twenty-five);
Utilization period: Up to 6 months from the date of the contract, upon submission of a request;
Grace period for payment of the principal: 24 months from the date of utilizing the respective amount;
Repayment term for the utilized amount: 60 months after the expiration of the grace period for principal
payment;
Interest rate: 3.275% per year.
On 10 March 2023, Bulgartransgaz ЕАD raised a request for further financing in the amount of up to BGN 22,370,675.
This amount represents the difference between the initially provided financial resource under the contract of 17
February 2023 and the offered price from the participant ranked second in the public procurement process. The reason
for the request is the refusal of the participant ranked first to enter into a contract with Bulgartransgaz ЕАD due to the
objective impossibility to implement the activities within the specified timeframe in the draft contract. On 7
April 2023, an annex to the contract was executed and the funds were utilized on 26 April 2023.
Credit rating
On 6 February 2023, Moody's upgraded the credit outlook of Bulgarian Energy Holding EAD from stable to positive,
confirming the Group's long-term rating at Ba1 and the rating of the non-subordinated and non-secured bonds of the
holding at Ва2. The credit rating outlook was upgraded to positive due to improved financial indicators, progres s in
Bulgarian Energy Holding EAD
Annual Separate Activity Report
31 December 2022
34
the liberalization of the electricity market, and the advantages that the BEH Group possesses, including its activities
in electricity production and public supply of natural gas.
On 27 March 2023, Fitch Ratings upgraded the credit rating of Bulgarian Energy Holding EAD from "BB" to "BB+"
with a stable outlook. The rating upgrade was caused by improvements in the company's individual profile, including
stable financial results, significant debt reduction, an improved regulatory framework, and strong support from the
sole shareholder - the state.
Founding a new subsidiary within the BEH Group
As a leading energy company in the country and on the Balkans, BEH Group expanded its portfolio by founding a
new company to support the efforts of the Republic of Bulgaria in reducing exhaust emissions in line with EU climate
policies and the need for investments in sustainable activities.
In accordance with a protocol decision of the Minister of Energy (No. Е - РД -16-8 dated 09.03.2023), BEH EAD
established a subsidiary company named National Energy Operator EAD , with its headquarters located at 16 Veslets
Str., Sofia. The scope of its activities includes the construction and operation of electrical facilities and other activities
not prohibited by law. The sole shareholder of the company's capital is Bulgarian Energy Holding EAD, with equity
of BGN 30,000,000 (thirty million). The equity is divided into 30,000,000 (thirty million) ordinary registered shares,
each with a nominal value of BGN 1 (one), provided through a monetary contribution from BEH EAD. The company
was entered into the Commercial Register of non-profit legal entities on 04.04.2023.
ESG rating
On 6 April 2023, Sustainalytics upgraded the ESG rating of BEH Group, resulting in an improvement in the overall
evaluation from 34.2 points ('high risk') to 33.9 points (“ high risk ” ). According to the rating report dated 6 April 2023,
there were changes in the assessment of BEH Group's exposure to various material risks related to ecological, social,
and managerial aspects. The evaluation of the company ’ s exposure increased from 54.3 points ( “ medium risk ” ) to
56.0 points (“ high risk ” ). Additionally, the assessment of the company's management performance in governing these
aspects improved from 39.9 points (“ average performance ” ) to 42.7 points ( “ average performance ” ).
IVAN ANDREEV ANDREY ZHIVKOV
EXECUTIVE DIRECTOR EXECUTIVE DIRECTOR
BULGARIAN ENERGY HOLDING EAD BULGARIAN ENERGY HOLDING EAD
Sofia, 4 May 2023
Annual Separate Activity Report
31 December 2022
34
the liberalization of the electricity market, and the advantages that the BEH Group possesses, including its activities
in electricity production and public supply of natural gas.
On 27 March 2023, Fitch Ratings upgraded the credit rating of Bulgarian Energy Holding EAD from "BB" to "BB+"
with a stable outlook. The rating upgrade was caused by improvements in the company's individual profile, including
stable financial results, significant debt reduction, an improved regulatory framework, and strong support from the
sole shareholder - the state.
Founding a new subsidiary within the BEH Group
As a leading energy company in the country and on the Balkans, BEH Group expanded its portfolio by founding a
new company to support the efforts of the Republic of Bulgaria in reducing exhaust emissions in line with EU climate
policies and the need for investments in sustainable activities.
In accordance with a protocol decision of the Minister of Energy (No. Е - РД -16-8 dated 09.03.2023), BEH EAD
established a subsidiary company named National Energy Operator EAD , with its headquarters located at 16 Veslets
Str., Sofia. The scope of its activities includes the construction and operation of electrical facilities and other activities
not prohibited by law. The sole shareholder of the company's capital is Bulgarian Energy Holding EAD, with equity
of BGN 30,000,000 (thirty million). The equity is divided into 30,000,000 (thirty million) ordinary registered shares,
each with a nominal value of BGN 1 (one), provided through a monetary contribution from BEH EAD. The company
was entered into the Commercial Register of non-profit legal entities on 04.04.2023.
ESG rating
On 6 April 2023, Sustainalytics upgraded the ESG rating of BEH Group, resulting in an improvement in the overall
evaluation from 34.2 points ('high risk') to 33.9 points (“ high risk ” ). According to the rating report dated 6 April 2023,
there were changes in the assessment of BEH Group's exposure to various material risks related to ecological, social,
and managerial aspects. The evaluation of the company ’ s exposure increased from 54.3 points ( “ medium risk ” ) to
56.0 points (“ high risk ” ). Additionally, the assessment of the company's management performance in governing these
aspects improved from 39.9 points (“ average performance ” ) to 42.7 points ( “ average performance ” ).
IVAN ANDREEV ANDREY ZHIVKOV
EXECUTIVE DIRECTOR EXECUTIVE DIRECTOR
BULGARIAN ENERGY HOLDING EAD BULGARIAN ENERGY HOLDING EAD
Sofia, 4 May 2023
BULGARIAN ENERGY HOLDING EAD
CORPORATE GOVERNANCE STATEMENT
31 December 2022
CORPORATE GOVERNANCE STATEMENT
31 December 2022
Bulgarian Energy Holding EAD
Corporate Governance Statement
31 December 2022
2
1. GENERAL PROVISIONS
This Corporate Governance Statement of Bulgarian Energy Holding EAD (BEH EAD, the Company) was prepared
in compliance with the requirements of Art. 40 para. 1 of the Accountancy Act and according to Art. 100n, para. 8 in
relation to para.7, item 1 of the Public Offering of Securities Act (POSA).
Bulgarian Energy Holding EAD (BEH EAD, the Company) is a company of public interest under §1, item 22 of the
additional provisions of the Accountancy Act and Art. 2 of Directive 2013/34/EU of the European Parliament and of
the Council whose transferable securities are admitted to trading on a regulated market in a Member State of the
European Union.
BEH EAD is a separate legal entity under the Bulgarian law, a sole-owner joint stock company acting in accordance
with the provisions of the Commerce Act, the Public Enterprises Act, the Rules on the application of the Public
Enterprises Act (the Rules) and the other legislative acts of the Republic of Bulgaria. The Sole Owner of the Capital,
who has all the rights of a shareholder under the law and the statutes, is the Bulgarian state through the Minister of
Energy.
The Company is managed by a one-tier management system. The Board of Directors has management, representative
and control functions.
The implementation of the Corporate Governance Code is both a statutory requirement and a result from the
willingness of the management for a constant improvement of the principles and practices for corporate governance
established within the Group.
The efforts of the executive management are focused on work transparency by presenting timely and complete
information, stakeholder consideration, independence, and prevention of conflict of interest.
The Company observes the established principles and norms of corporate governance provided for in the effective
legislative acts, applicable for its activity. Furthermore, the Company is involved in certain actions and policies with
regard to the companies’ sustainable development, including the disclosure of information, related to the climate and
social aspects of their activity. The Board of Directors of BEH EAD encourages the implementation and monitors the
observation on behalf of the subsidiaries of the established principles for sustainable development at a group level, as
well as it contributes to the establishment of sustainable development culture.
The BEH Group places great importance on fostering effective relationships with various stakeholders. These
stakeholders consist of individuals or groups directly impacted by the company's operations who also possess the
ability to influence its activities. This includes suppliers, clients, employees, creditors, advocacy groups, and others.
The BEH Group identifies these stakeholders based on their significance, areas of influence, roles, and commitment
to sustainable development. The Board of Directors of BEH EAD complies with legal requirements when engaging
with stakeholders. Both the holding company and its subsidiaries, as part of their corporate management, ensure the
protection of stakeholder rights as mandated by law or through mutual agreements with the companies. Following
best practices in corporate management, the holding company takes the stakeholders ’ interest into consideration,
complying with principles such as transparency, reporting, and ethical business conduct.
The Corporate Governance Statement is a separate report, which is published along with the activity report. Both
documents are available on the Company`s website www.bgenh.com.
Corporate Governance Statement
31 December 2022
2
1. GENERAL PROVISIONS
This Corporate Governance Statement of Bulgarian Energy Holding EAD (BEH EAD, the Company) was prepared
in compliance with the requirements of Art. 40 para. 1 of the Accountancy Act and according to Art. 100n, para. 8 in
relation to para.7, item 1 of the Public Offering of Securities Act (POSA).
Bulgarian Energy Holding EAD (BEH EAD, the Company) is a company of public interest under §1, item 22 of the
additional provisions of the Accountancy Act and Art. 2 of Directive 2013/34/EU of the European Parliament and of
the Council whose transferable securities are admitted to trading on a regulated market in a Member State of the
European Union.
BEH EAD is a separate legal entity under the Bulgarian law, a sole-owner joint stock company acting in accordance
with the provisions of the Commerce Act, the Public Enterprises Act, the Rules on the application of the Public
Enterprises Act (the Rules) and the other legislative acts of the Republic of Bulgaria. The Sole Owner of the Capital,
who has all the rights of a shareholder under the law and the statutes, is the Bulgarian state through the Minister of
Energy.
The Company is managed by a one-tier management system. The Board of Directors has management, representative
and control functions.
The implementation of the Corporate Governance Code is both a statutory requirement and a result from the
willingness of the management for a constant improvement of the principles and practices for corporate governance
established within the Group.
The efforts of the executive management are focused on work transparency by presenting timely and complete
information, stakeholder consideration, independence, and prevention of conflict of interest.
The Company observes the established principles and norms of corporate governance provided for in the effective
legislative acts, applicable for its activity. Furthermore, the Company is involved in certain actions and policies with
regard to the companies’ sustainable development, including the disclosure of information, related to the climate and
social aspects of their activity. The Board of Directors of BEH EAD encourages the implementation and monitors the
observation on behalf of the subsidiaries of the established principles for sustainable development at a group level, as
well as it contributes to the establishment of sustainable development culture.
The BEH Group places great importance on fostering effective relationships with various stakeholders. These
stakeholders consist of individuals or groups directly impacted by the company's operations who also possess the
ability to influence its activities. This includes suppliers, clients, employees, creditors, advocacy groups, and others.
The BEH Group identifies these stakeholders based on their significance, areas of influence, roles, and commitment
to sustainable development. The Board of Directors of BEH EAD complies with legal requirements when engaging
with stakeholders. Both the holding company and its subsidiaries, as part of their corporate management, ensure the
protection of stakeholder rights as mandated by law or through mutual agreements with the companies. Following
best practices in corporate management, the holding company takes the stakeholders ’ interest into consideration,
complying with principles such as transparency, reporting, and ethical business conduct.
The Corporate Governance Statement is a separate report, which is published along with the activity report. Both
documents are available on the Company`s website www.bgenh.com.
Bulgarian Energy Holding EAD
Corporate Governance Statement
31 December 2022
3
2. INFORMATION PURSUANT TO ARTICLE 100n, paragraph 8, item 1 of POSA
BEH EAD adheres, as appropriate, to the National Corporate Governance Code, established by the Chairperson of the
Financial Supervision C ommission within the meaning of art. 100n, par. 8, i. 1, letter “а“ of POSA by Decision No
850- ККУ of 25.11.2021 and adopted by the National Corporate Governance Committee. The Code is applied on a
“comply or explain” principle, i.e. in case of diversion the management clarifies the reasons for this.
BEH EAD protects the rights of the sole shareholder - the state, described in Chapter third of the National Corporate
Governance Code.
BEH EAD implements a Corporate Governance Policy, adopted by the Board of Directors of BEH EAD by a
Resolution under i.I.2. from Protocol No 27-2018/17.05.2018. The main purpose of the Corporate Governance Policy
is maintaining and improving standards and management quality corresponding to the best world practices for
transparency, stakeholder compliance, independence, and avoidance of conflict of interests in implementing the
Company activity. As a public enterprise in the energy sector, BEH EAD plays a key role for the economy of Bulgaria,
which predetermines the significance of the good corporate governance. BEH EAD is aware of its importance for
maintaining the economic effectiveness and competitiveness of the Republic of Bulgaria. Its implementation raises
the efficiency, transparency, and responsibility of Bulgarian Energy Holding EAD in pursuing its activity at levels,
competitive to the private sector. It is mandatory for all companies within the holding, as their executive managements
develop and apply internal implementing rules, strategies, and policies in conformity with it.
The strategic goals of the Corporate Governance Policy are:
- Balancing the development of the company with the interests of the owner, management, stakeholders, and
existing and potential investors.
- Ensuring a mechanism for an honest, responsible and effective management of the company on behalf of the
management bodies;
- An opportunity for effective supervision on the management on behalf of the principal and the regulatory
bodies;
- Ensuring information security and foreseeability of real and potential investors/bondholders in making
investment decisions.
- Achieving transparency and publicity of the processes for providing information on behalf of the company
to employees, partners, and stakeholders.
- Raising the trust of the owner, existing and potential investors, and stakeholders and maintaining the good
name of BEH EAD to the public.
BEH EAD adheres to an Information Disclosure Policy of BEH EAD adopted with a Decision under i.I.1.10 of
Protocol No 75 from 13 October 2022 of the Board of Directors of BEH EAD. The Policy defines the scope of the
information subject to disclosure by BEH EAD in its capacity as a public enterprise, within the meaning of Art. 2,
para. 1 of the Law on Public Enterprises. BEH EAD discloses and provides easy access to all essential information,
including the financial status of the holding and the companies in BEH Group, as well as its structure. BEH EAD
discloses any essential information regarding the operational activity of the company, regardless of its nature, in
compliance with the principle of equal treatment of the addressees. As soon as possible, the company discloses
publicly internal information in accordance with Regulation (EU) No. 596/2014 of the European Parliament. The
Policy is publicly accessible on the Company`s website: www.bgenh.com.
BEH EAD strictly complies with the requirements for disclosure of information in terms of time and completeness
according to the Bulgarian legislation and instructions of the Minister of Energy. The timely disclosure of information
on the annual, half-yearly, and quarterly reports, as well as activity reports related to BEH EAD, is properly
communicated to the public. This is done through the company's website, the Ministry of Finance's website, and a
web-based electronic information system for public enterprises overseen by the Public Enterprises and Control
Agency.
BEH EAD does not publish non-financial information on an individual basis, because it implements art.50 of the
Accountancy Act. The consolidated non-financial statement provides details on the degree and manner in which the
company's operations can be considered environmentally sustainable. This includes information on the share of their
Corporate Governance Statement
31 December 2022
3
2. INFORMATION PURSUANT TO ARTICLE 100n, paragraph 8, item 1 of POSA
BEH EAD adheres, as appropriate, to the National Corporate Governance Code, established by the Chairperson of the
Financial Supervision C ommission within the meaning of art. 100n, par. 8, i. 1, letter “а“ of POSA by Decision No
850- ККУ of 25.11.2021 and adopted by the National Corporate Governance Committee. The Code is applied on a
“comply or explain” principle, i.e. in case of diversion the management clarifies the reasons for this.
BEH EAD protects the rights of the sole shareholder - the state, described in Chapter third of the National Corporate
Governance Code.
BEH EAD implements a Corporate Governance Policy, adopted by the Board of Directors of BEH EAD by a
Resolution under i.I.2. from Protocol No 27-2018/17.05.2018. The main purpose of the Corporate Governance Policy
is maintaining and improving standards and management quality corresponding to the best world practices for
transparency, stakeholder compliance, independence, and avoidance of conflict of interests in implementing the
Company activity. As a public enterprise in the energy sector, BEH EAD plays a key role for the economy of Bulgaria,
which predetermines the significance of the good corporate governance. BEH EAD is aware of its importance for
maintaining the economic effectiveness and competitiveness of the Republic of Bulgaria. Its implementation raises
the efficiency, transparency, and responsibility of Bulgarian Energy Holding EAD in pursuing its activity at levels,
competitive to the private sector. It is mandatory for all companies within the holding, as their executive managements
develop and apply internal implementing rules, strategies, and policies in conformity with it.
The strategic goals of the Corporate Governance Policy are:
- Balancing the development of the company with the interests of the owner, management, stakeholders, and
existing and potential investors.
- Ensuring a mechanism for an honest, responsible and effective management of the company on behalf of the
management bodies;
- An opportunity for effective supervision on the management on behalf of the principal and the regulatory
bodies;
- Ensuring information security and foreseeability of real and potential investors/bondholders in making
investment decisions.
- Achieving transparency and publicity of the processes for providing information on behalf of the company
to employees, partners, and stakeholders.
- Raising the trust of the owner, existing and potential investors, and stakeholders and maintaining the good
name of BEH EAD to the public.
BEH EAD adheres to an Information Disclosure Policy of BEH EAD adopted with a Decision under i.I.1.10 of
Protocol No 75 from 13 October 2022 of the Board of Directors of BEH EAD. The Policy defines the scope of the
information subject to disclosure by BEH EAD in its capacity as a public enterprise, within the meaning of Art. 2,
para. 1 of the Law on Public Enterprises. BEH EAD discloses and provides easy access to all essential information,
including the financial status of the holding and the companies in BEH Group, as well as its structure. BEH EAD
discloses any essential information regarding the operational activity of the company, regardless of its nature, in
compliance with the principle of equal treatment of the addressees. As soon as possible, the company discloses
publicly internal information in accordance with Regulation (EU) No. 596/2014 of the European Parliament. The
Policy is publicly accessible on the Company`s website: www.bgenh.com.
BEH EAD strictly complies with the requirements for disclosure of information in terms of time and completeness
according to the Bulgarian legislation and instructions of the Minister of Energy. The timely disclosure of information
on the annual, half-yearly, and quarterly reports, as well as activity reports related to BEH EAD, is properly
communicated to the public. This is done through the company's website, the Ministry of Finance's website, and a
web-based electronic information system for public enterprises overseen by the Public Enterprises and Control
Agency.
BEH EAD does not publish non-financial information on an individual basis, because it implements art.50 of the
Accountancy Act. The consolidated non-financial statement provides details on the degree and manner in which the
company's operations can be considered environmentally sustainable. This includes information on the share of their
Bulgarian Energy Holding EAD
Corporate Governance Statement
31 December 2022
4
revenue generated from products and services associated with sustainable activities; the share of capital and
operational expenses, if applicable, allocated to assets or processes linked to sustainable activities.
3. INFORMATION PURSUANT TO ARTICLE 100n, paragraph 8, item 2 of POSA
The number of the companies in which the members of the Board of Directors can hold managerial positions and the
number of successive mandates of the independent members of the Board of Directors is not defined in the regulatory
acts of BEH EAD. However, the Company complies with the good practices, without a formal regulatory requirement
for prevention of high concentration of control functions in individual companies by one single person.
The remuneration of the Board of Directors shall be determined in accordance with the terms and conditions of the
Rules on the application of the Public Enterprises Act. No remuneration other than that specified in the Rules is
allowed. As a public enterprise, BEH EAD complies with the provisions of the Public Enterprises Act and its bylaws,
and does not apply a deliberate Remuneration Policy.
4. INFORMATION PURSUANT TO ARTICLE 100n, paragraph 8, item 3 of POSA
By decision of the Board of Directors dated 28 February 2017, an Internal Audit Unit was established at BEH EAD,
which is a separate department of direct subordination to the Executive Director. The internal audit activities comply
with the requirements of the Public Sector Internal Audit Act. The Status of Internal Audit Department is approved
by the decision of the BD of BEH EAD under item I.2.1. of Record No. 68-2017/31.10.2017. Furthermore, by Record
Resolution No. 31-2022/11.05.2022, the Board of Directors of BEH EAD established internal rules for the
implementation of internal audit activities conducted by the Internal Audit Department. The scope of audit
engagements for assurance and consultation covers BEH EAD and its subsidiaries, excluding the independent
transmission operators.
The internal audit assists the Company 's management and employees to achieve their objectives by:
− Identifying and evaluating the risks in BEH EAD with a view to allocating audit resources to maximize
coverage of the audit environment;
− Assessing the adequacy and effectiveness of the financial management and control system with regard to:
a) identifying, assessing and managing the risk by the Company management;
b) compliance with the legislation, internal acts and contracts;
c) reliability and the comprehensiveness of the financial and operational information;
d) effectiveness, efficiency and economy of the activities;
e) protecting assets and information;
f) performing tasks and achieving goals.
− Providing recommendations to the management of for improvement of D's activities.
On 2 April 2014, a Financial Management and Control System of BEH EAD was approved, which entered into force
on 14 April 2014.
The purpose of the system is to provide reasonable assurance that the objectives of the holding are achieved through:
− compliance with the legislation, the internal acts of the holding and the contracts concluded,
− reliability and comprehensiveness of financial and operational information,
− economy, efficiency and effectiveness of the activities,
− safeguarding of assets and information.
The control environment includes:
− personal integrity and professional ethics of the employees of the holding,
− management philosophy and work style,
− an organizational structure ensuring separation of responsibilities, hierarchy and clear rules, rights, obligations
and reporting levels,
Corporate Governance Statement
31 December 2022
4
revenue generated from products and services associated with sustainable activities; the share of capital and
operational expenses, if applicable, allocated to assets or processes linked to sustainable activities.
3. INFORMATION PURSUANT TO ARTICLE 100n, paragraph 8, item 2 of POSA
The number of the companies in which the members of the Board of Directors can hold managerial positions and the
number of successive mandates of the independent members of the Board of Directors is not defined in the regulatory
acts of BEH EAD. However, the Company complies with the good practices, without a formal regulatory requirement
for prevention of high concentration of control functions in individual companies by one single person.
The remuneration of the Board of Directors shall be determined in accordance with the terms and conditions of the
Rules on the application of the Public Enterprises Act. No remuneration other than that specified in the Rules is
allowed. As a public enterprise, BEH EAD complies with the provisions of the Public Enterprises Act and its bylaws,
and does not apply a deliberate Remuneration Policy.
4. INFORMATION PURSUANT TO ARTICLE 100n, paragraph 8, item 3 of POSA
By decision of the Board of Directors dated 28 February 2017, an Internal Audit Unit was established at BEH EAD,
which is a separate department of direct subordination to the Executive Director. The internal audit activities comply
with the requirements of the Public Sector Internal Audit Act. The Status of Internal Audit Department is approved
by the decision of the BD of BEH EAD under item I.2.1. of Record No. 68-2017/31.10.2017. Furthermore, by Record
Resolution No. 31-2022/11.05.2022, the Board of Directors of BEH EAD established internal rules for the
implementation of internal audit activities conducted by the Internal Audit Department. The scope of audit
engagements for assurance and consultation covers BEH EAD and its subsidiaries, excluding the independent
transmission operators.
The internal audit assists the Company 's management and employees to achieve their objectives by:
− Identifying and evaluating the risks in BEH EAD with a view to allocating audit resources to maximize
coverage of the audit environment;
− Assessing the adequacy and effectiveness of the financial management and control system with regard to:
a) identifying, assessing and managing the risk by the Company management;
b) compliance with the legislation, internal acts and contracts;
c) reliability and the comprehensiveness of the financial and operational information;
d) effectiveness, efficiency and economy of the activities;
e) protecting assets and information;
f) performing tasks and achieving goals.
− Providing recommendations to the management of for improvement of D's activities.
On 2 April 2014, a Financial Management and Control System of BEH EAD was approved, which entered into force
on 14 April 2014.
The purpose of the system is to provide reasonable assurance that the objectives of the holding are achieved through:
− compliance with the legislation, the internal acts of the holding and the contracts concluded,
− reliability and comprehensiveness of financial and operational information,
− economy, efficiency and effectiveness of the activities,
− safeguarding of assets and information.
The control environment includes:
− personal integrity and professional ethics of the employees of the holding,
− management philosophy and work style,
− an organizational structure ensuring separation of responsibilities, hierarchy and clear rules, rights, obligations
and reporting levels,
Bulgarian Energy Holding EAD
Corporate Governance Statement
31 December 2022
5
− human resources management policy,
− competence of staff.
The Risk Management Strategy of BEH EAD for 2019-2021 was adopted by decision under item I.2.3 of Protocol No
71-2018/04.12.2018 of the Board of Directors of BEH EAD.
With the Decision under item I.3. of Protocol No 21-2022 / 06.04.2022 of the Board of Directors of BEH EAD, an
Updated Risk Management Policy has been adopted at BEH EAD in accordance with the Guidelines of the Ministry
of Finance for risk management in public sector organizations. An integral part of it are the rules and procedures for
risk management in BEH EAD.
With the Decision under item I.4. of Protocol No 21-2022 / 06.04.2022 of the Board of Directors of BEH EAD, a Risk
Management Strategy was adopted at BEH EAD for the period 2022 - 2024.
The management of BEH EAD undertakes constant commitment to the processes of identification, assessment,
analysis and management of risks within the holding, as well as commitment to these processes at all management
and expert levels.
The following are determined in the Risk Management Strategy
- the stages of the risk management process and their content;
- the participants in the implementation of the risk management process.
The implementation of the Strategy aims to:
- Identify, analyze, assess and identifying the risks for providing an opportunity for implementation of the
company goals;
- Determine the level of risk appetite and risk response actions (restriction, transfer, acceptance or
termination);
- Establish and implement adequate and effective control mechanisms;
- Identify the roles and responsibilities of participants in the risk management process;
- Protect the company's reputation.
The Risk Management process in the Company comprises the following:
- Defining the main objectives of the Company;
- Identifying the risks;
- Risk control;
- Risk Assessment;
- Documenting the risk;
- Defining the level of risk - Risk Appetite;
- Review and Reporting on Risk.
5. INFORMATION PURSUANT TO ARTICLE 100n, paragraph 8, item 4 of POSA
5.1. Information under Art. 10, paragraph 1 (c) of Directive 2004/25/ЕC of the European Parliament and
the Council of 21 April 2004.
Bulgarian Energy Holding EAD is the owner of an economically related group, which includes the following direct
subsidiaries and joint ventures as at 31 December 2022:
Corporate Governance Statement
31 December 2022
5
− human resources management policy,
− competence of staff.
The Risk Management Strategy of BEH EAD for 2019-2021 was adopted by decision under item I.2.3 of Protocol No
71-2018/04.12.2018 of the Board of Directors of BEH EAD.
With the Decision under item I.3. of Protocol No 21-2022 / 06.04.2022 of the Board of Directors of BEH EAD, an
Updated Risk Management Policy has been adopted at BEH EAD in accordance with the Guidelines of the Ministry
of Finance for risk management in public sector organizations. An integral part of it are the rules and procedures for
risk management in BEH EAD.
With the Decision under item I.4. of Protocol No 21-2022 / 06.04.2022 of the Board of Directors of BEH EAD, a Risk
Management Strategy was adopted at BEH EAD for the period 2022 - 2024.
The management of BEH EAD undertakes constant commitment to the processes of identification, assessment,
analysis and management of risks within the holding, as well as commitment to these processes at all management
and expert levels.
The following are determined in the Risk Management Strategy
- the stages of the risk management process and their content;
- the participants in the implementation of the risk management process.
The implementation of the Strategy aims to:
- Identify, analyze, assess and identifying the risks for providing an opportunity for implementation of the
company goals;
- Determine the level of risk appetite and risk response actions (restriction, transfer, acceptance or
termination);
- Establish and implement adequate and effective control mechanisms;
- Identify the roles and responsibilities of participants in the risk management process;
- Protect the company's reputation.
The Risk Management process in the Company comprises the following:
- Defining the main objectives of the Company;
- Identifying the risks;
- Risk control;
- Risk Assessment;
- Documenting the risk;
- Defining the level of risk - Risk Appetite;
- Review and Reporting on Risk.
5. INFORMATION PURSUANT TO ARTICLE 100n, paragraph 8, item 4 of POSA
5.1. Information under Art. 10, paragraph 1 (c) of Directive 2004/25/ЕC of the European Parliament and
the Council of 21 April 2004.
Bulgarian Energy Holding EAD is the owner of an economically related group, which includes the following direct
subsidiaries and joint ventures as at 31 December 2022:
Bulgarian Energy Holding EAD
Corporate Governance Statement
31 December 2022
6
Enterprise Country of
incorporation Main activity
31 December
2022
31 December
2021
% %
Subsidiaries
Natsionalna Elektricheska
Kompania EAD Bulgaria electricity generation and public
electricity supplier 100% 100%
Bulgargaz EAD Bulgaria public supply of natural gas 100% 100%
Bulgartransgaz ЕАD Bulgaria storage and transmission of natural
gas 100% 100%
Bulgartel EAD Bulgaria telecommunications 100% 100%
Bulgartel Skopje DOOEL Macedonia telecommunications 100% 100%
Balkan Gas Hub EAD Bulgaria
establishment and operation of an
electronic platform for trade with
natural gas, energy products, green
and white certificates, carbon-gas
emissions
100% 100%
NPP Kozloduy EAD Bulgaria electricity and heat generation 100% 100%
HPP Kozloduy EAD Bulgaria generation and distribution of
electricity from a hydropower plant 100% 100%
NPP Kozloduy - New Build EAD Bulgaria
building energy blocks of a nuclear
power plant, assessing the
compliance of
investment projects
100% 100%
NPP Construction Supervision
EOOD Bulgaria exercising construction supervision
in the design and construction 100% 100%
NPP Servicе EOOD Bulgaria Repair of plant and equipment of
general and special designation 100% -
Interpriborservice OOD Bulgaria installation and technical service of
automated systems 63.96% 63.96%
TPP Maritsa East 2 EAD Bulgaria generation of electricity and
thermal energy 100% 100%
PFC Beroe - Stara Zagora EAD Bulgaria football club - 100%
Mini Maritsa Iztok EAD Bulgaria coal extraction and sale 100% 100%
Electroenergien Sistemen
Operator EAD Bulgaria transmission of electricity 100% 100%
ESO Engineering EOOD Bulgaria
development of technologies and
projects for energy sites and
project management
100% 100%
ESO Project EOOD Bulgaria
conceptual designs under the
Spatial Development Act,
consultancy activity
100% -
Joint ventures
ICGB AD Bulgaria construction and operation of gas
transmission system 50% 50%
South Stream - Bulgaria AD Bulgaria construction and operation of gas
transmission system 50% 50%
Trans Balkan Electric Power
Trading С.А. – NECO S.A. Greece sale of electricity 50% 50%
Southeast Electricity Network
Coordination Center (“SEleNe
CC”)
Greece
Regional Security Coordinator for
Southeast Europe with the purpose
to maintaining the electricity system
25% 25%
Gastrade S.A. Greece building a terminal for a liquefied
natural gas 20% 20%
Associated companies
ContourGlobal Maritsa Iztok 3
AD Bulgaria electricity generation 27% 27%
ContourGlobal Operations
Bulgaria AD Bulgaria
operation and maintenance of a
thermal power plant 27% 27%
ZAD Energy AD Bulgaria insurance and reinsurance 48.08% 48.08%
Allianz Bulgaria Pension
Company AD Bulgaria pension company 34% 34%
Hydro Power Company Gorna
Arda AD Bulgaria construction of hydropower plants 24% 24%
Corporate Governance Statement
31 December 2022
6
Enterprise Country of
incorporation Main activity
31 December
2022
31 December
2021
% %
Subsidiaries
Natsionalna Elektricheska
Kompania EAD Bulgaria electricity generation and public
electricity supplier 100% 100%
Bulgargaz EAD Bulgaria public supply of natural gas 100% 100%
Bulgartransgaz ЕАD Bulgaria storage and transmission of natural
gas 100% 100%
Bulgartel EAD Bulgaria telecommunications 100% 100%
Bulgartel Skopje DOOEL Macedonia telecommunications 100% 100%
Balkan Gas Hub EAD Bulgaria
establishment and operation of an
electronic platform for trade with
natural gas, energy products, green
and white certificates, carbon-gas
emissions
100% 100%
NPP Kozloduy EAD Bulgaria electricity and heat generation 100% 100%
HPP Kozloduy EAD Bulgaria generation and distribution of
electricity from a hydropower plant 100% 100%
NPP Kozloduy - New Build EAD Bulgaria
building energy blocks of a nuclear
power plant, assessing the
compliance of
investment projects
100% 100%
NPP Construction Supervision
EOOD Bulgaria exercising construction supervision
in the design and construction 100% 100%
NPP Servicе EOOD Bulgaria Repair of plant and equipment of
general and special designation 100% -
Interpriborservice OOD Bulgaria installation and technical service of
automated systems 63.96% 63.96%
TPP Maritsa East 2 EAD Bulgaria generation of electricity and
thermal energy 100% 100%
PFC Beroe - Stara Zagora EAD Bulgaria football club - 100%
Mini Maritsa Iztok EAD Bulgaria coal extraction and sale 100% 100%
Electroenergien Sistemen
Operator EAD Bulgaria transmission of electricity 100% 100%
ESO Engineering EOOD Bulgaria
development of technologies and
projects for energy sites and
project management
100% 100%
ESO Project EOOD Bulgaria
conceptual designs under the
Spatial Development Act,
consultancy activity
100% -
Joint ventures
ICGB AD Bulgaria construction and operation of gas
transmission system 50% 50%
South Stream - Bulgaria AD Bulgaria construction and operation of gas
transmission system 50% 50%
Trans Balkan Electric Power
Trading С.А. – NECO S.A. Greece sale of electricity 50% 50%
Southeast Electricity Network
Coordination Center (“SEleNe
CC”)
Greece
Regional Security Coordinator for
Southeast Europe with the purpose
to maintaining the electricity system
25% 25%
Gastrade S.A. Greece building a terminal for a liquefied
natural gas 20% 20%
Associated companies
ContourGlobal Maritsa Iztok 3
AD Bulgaria electricity generation 27% 27%
ContourGlobal Operations
Bulgaria AD Bulgaria
operation and maintenance of a
thermal power plant 27% 27%
ZAD Energy AD Bulgaria insurance and reinsurance 48.08% 48.08%
Allianz Bulgaria Pension
Company AD Bulgaria pension company 34% 34%
Hydro Power Company Gorna
Arda AD Bulgaria construction of hydropower plants 24% 24%
Bulgarian Energy Holding EAD
Corporate Governance Statement
31 December 2022
7
5.2. Information under Art. 10, paragraph 1 (d) of Directive 2004/25/EC of the European Parliament and
of the Council of 21 April 2004
BEH EAD has no issued securities with special rights of control.
5.3. Information under art. 10, paragraph 1 (f) of Directive 2004/25/ЕC of the Euro pean Parliament and
the Council of 21 April 2004.
There are no restrictions on voting rights.
5.4. Information under art. 10, paragraph 1 (h) of Directive 2004/25/ЕC of the European Parliament
and the Council of 21 April 2004.
The rules that regulate the appointment and replacement of the board members are described in item5.
The Sole Owner of the Capital amends and supplements the Company`s Statute
5.5. Information under art. 10, paragraph 1 (i) of Directive 2004/25/ЕC of the European Parliament
and the Council of 21 April 2004.
The authority of the members of the Board of Directors are described in item 5.
6. INFORMATION PURSUANT TO ARTICLE 100n, paragraph 8, item 5 of POSA
The governing bodies of the BEH EAD are:
- The Sole Owner of the Capital;
- The Board of Directors.
BEH EAD has an hired an Audit committee under art. 107 of the Independent Financial Audit Act.
6.1. Sole Owner of the Capital
6.1.1. Status
The sole owner of the capital of BEH EAD is the Republic of Bulgaria. The State's rights as the Sole Owner of the
Capital are exercised by the Minister of Energy, who has the capacity of principal of the company, and is the body
empowered to make all decisions passed within the competence of the Sole Owner of the Capital according to the law
or to the Articles of association.
6.1.2. Competence
(1) The Sole Owner of the Capital has all the rights of а shareholder of the BEH EAD according to the law and to the
Articles of Association. The Sole Owner of the Capital decides on all issues, which the law places in the competence
of the Shareholders' General Meeting.
(2) The Sole Owner of the Capital:
- amends and supplements the Articles of Association of BEH EAD;
- increases and decreases the capital of the Company;
- transforms or terminates the company;
- selects and dismisses the members of the Board of Directors and determines their remuneration;
- selects and dismisses the chartered accountant;
- approves the annual individual and consolidated financial statements after verification by the appointed chartered
accountant;
Corporate Governance Statement
31 December 2022
7
5.2. Information under Art. 10, paragraph 1 (d) of Directive 2004/25/EC of the European Parliament and
of the Council of 21 April 2004
BEH EAD has no issued securities with special rights of control.
5.3. Information under art. 10, paragraph 1 (f) of Directive 2004/25/ЕC of the Euro pean Parliament and
the Council of 21 April 2004.
There are no restrictions on voting rights.
5.4. Information under art. 10, paragraph 1 (h) of Directive 2004/25/ЕC of the European Parliament
and the Council of 21 April 2004.
The rules that regulate the appointment and replacement of the board members are described in item5.
The Sole Owner of the Capital amends and supplements the Company`s Statute
5.5. Information under art. 10, paragraph 1 (i) of Directive 2004/25/ЕC of the European Parliament
and the Council of 21 April 2004.
The authority of the members of the Board of Directors are described in item 5.
6. INFORMATION PURSUANT TO ARTICLE 100n, paragraph 8, item 5 of POSA
The governing bodies of the BEH EAD are:
- The Sole Owner of the Capital;
- The Board of Directors.
BEH EAD has an hired an Audit committee under art. 107 of the Independent Financial Audit Act.
6.1. Sole Owner of the Capital
6.1.1. Status
The sole owner of the capital of BEH EAD is the Republic of Bulgaria. The State's rights as the Sole Owner of the
Capital are exercised by the Minister of Energy, who has the capacity of principal of the company, and is the body
empowered to make all decisions passed within the competence of the Sole Owner of the Capital according to the law
or to the Articles of association.
6.1.2. Competence
(1) The Sole Owner of the Capital has all the rights of а shareholder of the BEH EAD according to the law and to the
Articles of Association. The Sole Owner of the Capital decides on all issues, which the law places in the competence
of the Shareholders' General Meeting.
(2) The Sole Owner of the Capital:
- amends and supplements the Articles of Association of BEH EAD;
- increases and decreases the capital of the Company;
- transforms or terminates the company;
- selects and dismisses the members of the Board of Directors and determines their remuneration;
- selects and dismisses the chartered accountant;
- approves the annual individual and consolidated financial statements after verification by the appointed chartered
accountant;
Bulgarian Energy Holding EAD
Corporate Governance Statement
31 December 2022
8
- decides to issue bonds, to distribute the profit, to replenish the Reserve Fund and for payment of dividend;
- appoints the liquidators upon termination of the Company, except in case of insolvency, and concludes a contract
with them;
- dismisses the members of the Board of Directors;
- makes decisions to open, transfer or close branches of the Company;
- determines the amount of compensation to owners of nationalized property, which they receive in cases under Article
18 of the Transformation and Privatization of State and Municipal Enterprises Act (repealed) and the Compensation
of Owners of Nationalized Property Act;
- approves decisions of the Board of Directors for: disposition transactions with fixed assets and for establishment of
real rights over real estate the value of which exceeds the lower value of BGN 500 thousand or 5% of the total book
value of fixed assets to 31 December of the previous year; for use or rental of real estate or assets, the book value of
which exceeds 5% of the total book value of fixed assets as of 31 December of the previous year; for acquisition of
shares and / or stocks in other companies, as well as for disposal of shares and / or stocks - property of the Company
in other companies; to obtain loans or credit; lending; for concluding contracts for joint activity (the so-called joint
venture); to assume bill of exchange obligations; to secure the obligations of the Company by establishing a
mortgage or pledge on fixed assets of the Company; to provide collateral in favor of third parties; for the conclusion
of a court or out-of-court agreement, which recognizes the obligations of the Company or forgives the receivables
of the Company from third parties; for significant change in the activity of the Company; for significant
organizational changes, for long-term cooperation of essential importance for the Company, as well as for the
termination of such cooperation;
- approves the choice of an insurer when concluding compulsory insurance contracts;
- authorizes the conclusion of contracts for the sale, exchange and rental of fixed assets, regardless of their book value,
by direct negotiation, as the starting price is determined by an independent evaluator;
- authorizes the sale and replacement of homes, studios, offices and garages of employees of the Company;
- approves the business program of the Company prepared by the Board of Directors;
- makes a decision on the distribution of the Company's profits and its payment and on the payment of royalties to the
members of the Board of Directors and determines their size;
- decides on other matters provided in its competence by the law and the Statute.
6.1.3. Decision-making
(1) The Sole Owner of the Capital makes decisions in the competence of a regular Annual General Meeting once
a year, and in the competence of an Extraordinary General Meeting – as required. The Sole Owner of the
Capital shall not announce an invitation in the Commercial Register and the Register of Non-profit Legal
Entities for the exercise of the competence of a General Meeting. The Sole Owner of the Capital may make
decisions within the competence of a General Meeting at any time in writing.
(2) The Board of Directors fulfills its obligations under Art. 223, respectively under Art. 251 of the Commerce
Act, by sending a written application to the Sole Owner of the Capital regarding the necessity, respectively
the readiness, to make decisions by the Sole Owner of the Capital. The written application contains
suggestions on the matters on which the Board of Directors proposes to the Sole Owner of the Capital to
make decisions. Proposals do not bind the Sole Owner of the Capital to consider and decide on the questions
raised, nor limit him/her with respect to the range of matters they can decide on.
(3) For their decisions, the Sole Owner of the Capital shall prepare a record in writing, signed by the Principal
of the Company.
(4) If the Sole Owner of the Capital wishes the members of the Board of Directors to be present during the
decision-making process, they are obliged to do so. The Sole Owner of the Capital may require the members
Corporate Governance Statement
31 December 2022
8
- decides to issue bonds, to distribute the profit, to replenish the Reserve Fund and for payment of dividend;
- appoints the liquidators upon termination of the Company, except in case of insolvency, and concludes a contract
with them;
- dismisses the members of the Board of Directors;
- makes decisions to open, transfer or close branches of the Company;
- determines the amount of compensation to owners of nationalized property, which they receive in cases under Article
18 of the Transformation and Privatization of State and Municipal Enterprises Act (repealed) and the Compensation
of Owners of Nationalized Property Act;
- approves decisions of the Board of Directors for: disposition transactions with fixed assets and for establishment of
real rights over real estate the value of which exceeds the lower value of BGN 500 thousand or 5% of the total book
value of fixed assets to 31 December of the previous year; for use or rental of real estate or assets, the book value of
which exceeds 5% of the total book value of fixed assets as of 31 December of the previous year; for acquisition of
shares and / or stocks in other companies, as well as for disposal of shares and / or stocks - property of the Company
in other companies; to obtain loans or credit; lending; for concluding contracts for joint activity (the so-called joint
venture); to assume bill of exchange obligations; to secure the obligations of the Company by establishing a
mortgage or pledge on fixed assets of the Company; to provide collateral in favor of third parties; for the conclusion
of a court or out-of-court agreement, which recognizes the obligations of the Company or forgives the receivables
of the Company from third parties; for significant change in the activity of the Company; for significant
organizational changes, for long-term cooperation of essential importance for the Company, as well as for the
termination of such cooperation;
- approves the choice of an insurer when concluding compulsory insurance contracts;
- authorizes the conclusion of contracts for the sale, exchange and rental of fixed assets, regardless of their book value,
by direct negotiation, as the starting price is determined by an independent evaluator;
- authorizes the sale and replacement of homes, studios, offices and garages of employees of the Company;
- approves the business program of the Company prepared by the Board of Directors;
- makes a decision on the distribution of the Company's profits and its payment and on the payment of royalties to the
members of the Board of Directors and determines their size;
- decides on other matters provided in its competence by the law and the Statute.
6.1.3. Decision-making
(1) The Sole Owner of the Capital makes decisions in the competence of a regular Annual General Meeting once
a year, and in the competence of an Extraordinary General Meeting – as required. The Sole Owner of the
Capital shall not announce an invitation in the Commercial Register and the Register of Non-profit Legal
Entities for the exercise of the competence of a General Meeting. The Sole Owner of the Capital may make
decisions within the competence of a General Meeting at any time in writing.
(2) The Board of Directors fulfills its obligations under Art. 223, respectively under Art. 251 of the Commerce
Act, by sending a written application to the Sole Owner of the Capital regarding the necessity, respectively
the readiness, to make decisions by the Sole Owner of the Capital. The written application contains
suggestions on the matters on which the Board of Directors proposes to the Sole Owner of the Capital to
make decisions. Proposals do not bind the Sole Owner of the Capital to consider and decide on the questions
raised, nor limit him/her with respect to the range of matters they can decide on.
(3) For their decisions, the Sole Owner of the Capital shall prepare a record in writing, signed by the Principal
of the Company.
(4) If the Sole Owner of the Capital wishes the members of the Board of Directors to be present during the
decision-making process, they are obliged to do so. The Sole Owner of the Capital may require the members
Bulgarian Energy Holding EAD
Corporate Governance Statement
31 December 2022
9
of the Board of Directors present or other persons invited by them to re-sign the record containing the
decisions taken.
(5) The application for registration of the decisions of the Sole owner of the capital, when these decisions are
subject to registration shall be assigned to the Executive Director, who in such case has the right to solely
represent the Company or to authorize a person.
6.2. Board of Directors of BEH EAD
6.2.1. Composition
As of 31.12.2022 the company has been managed by a Board of Directors consisting of:
Veselina Lachezarova Kanatova Buchkova
Angel Emilov Yankov
Ivan Todorov Andreev
Zheko Mihaylov Zhekov
Anton Georgiev Simeonov
Stelian Penchev Koev
Diyan Stanimirov Dimitrov
Veselina Lachezarova Kanatova-Buchkova was elected Chairperson of the Board of Directors, and Ivan Todorov
Andreev was elected Representative of the Company, who was appointed Executive Director at a meeting of the Board
of Directors.
As of the date of issuance of the Corporate Governance Statement, the current Board of Directors of the company,
appointed by the relevant protocol decisions of the Minister of Energy, is as follows:
Veselina Lachezarova Kanatova Buchkova
Angel Emilov Yankov
Ivan Todorov Andreev
Anton Georgiev Simeonov
Diyan Stanimirov Dimitrov
Andrey Stephanov Zhivkov
Ivo Ivanov Todorov
Vesselina Lachezarova Kanatova-Buchkova was elected Chairman of the Board of Directors and Ivan Todorov
Andreev and Andrey Stefanov Zhivkov were appointed as executive directors at a meeting of the Board of Directors.
6.2.2. Status
(1) The Board of Directors reports to the Sole Owner of the Capital for the management of the Company. The Board
of Directors holds meetings as necessary but not less than once every three months.
(2) The Board of Directors shall consist of at least five members - natural persons, who shall be elected and appointed
after holding a competition, under conditions and by the order, regulated in the Regulations for application of the
Public Enterprises Act.
(3) The Board of Directors elects one or two of its members for executive members while the others are non-executive
members. The term of the Board of Directors has а duration of 3 (three) years, from the registration of the Board of
Directors in the Commercial Register and the Register of Non-profit Legal Entities, where the Board of Directors
continues to exercise its jurisdiction until the registration of a new Board of Directors even after the expiry of its term.
A member of the Board of Directors cannot be any individual who:
Corporate Governance Statement
31 December 2022
9
of the Board of Directors present or other persons invited by them to re-sign the record containing the
decisions taken.
(5) The application for registration of the decisions of the Sole owner of the capital, when these decisions are
subject to registration shall be assigned to the Executive Director, who in such case has the right to solely
represent the Company or to authorize a person.
6.2. Board of Directors of BEH EAD
6.2.1. Composition
As of 31.12.2022 the company has been managed by a Board of Directors consisting of:
Veselina Lachezarova Kanatova Buchkova
Angel Emilov Yankov
Ivan Todorov Andreev
Zheko Mihaylov Zhekov
Anton Georgiev Simeonov
Stelian Penchev Koev
Diyan Stanimirov Dimitrov
Veselina Lachezarova Kanatova-Buchkova was elected Chairperson of the Board of Directors, and Ivan Todorov
Andreev was elected Representative of the Company, who was appointed Executive Director at a meeting of the Board
of Directors.
As of the date of issuance of the Corporate Governance Statement, the current Board of Directors of the company,
appointed by the relevant protocol decisions of the Minister of Energy, is as follows:
Veselina Lachezarova Kanatova Buchkova
Angel Emilov Yankov
Ivan Todorov Andreev
Anton Georgiev Simeonov
Diyan Stanimirov Dimitrov
Andrey Stephanov Zhivkov
Ivo Ivanov Todorov
Vesselina Lachezarova Kanatova-Buchkova was elected Chairman of the Board of Directors and Ivan Todorov
Andreev and Andrey Stefanov Zhivkov were appointed as executive directors at a meeting of the Board of Directors.
6.2.2. Status
(1) The Board of Directors reports to the Sole Owner of the Capital for the management of the Company. The Board
of Directors holds meetings as necessary but not less than once every three months.
(2) The Board of Directors shall consist of at least five members - natural persons, who shall be elected and appointed
after holding a competition, under conditions and by the order, regulated in the Regulations for application of the
Public Enterprises Act.
(3) The Board of Directors elects one or two of its members for executive members while the others are non-executive
members. The term of the Board of Directors has а duration of 3 (three) years, from the registration of the Board of
Directors in the Commercial Register and the Register of Non-profit Legal Entities, where the Board of Directors
continues to exercise its jurisdiction until the registration of a new Board of Directors even after the expiry of its term.
A member of the Board of Directors cannot be any individual who:
Bulgarian Energy Holding EAD
Corporate Governance Statement
31 December 2022
10
- on their own behalf or on the behalf of a third party performs commercial transactions similar to those of the
Company;
- works under labor employment or under a status of a civil servant;
- is а partner in а general partnership, limited special partnership, or limited liability company, when it
performs an activity similar to that of the Company;
- has been а member of an executive or supervisory body of a company, terminated due to bankruptcy in the
last two years preceding the date of the bankruptcy where there are unsatisfied creditors;
- is declared insolvent as a sole trader or a general partner in a company, which has been declared insolvent, if
there are unsatisfied creditors left;
- is a spouse or a person in a de facto cohabitation, a relative in a straight line, or in a collateral line up to the
fourth degree inclusive, and by matchmaking - up to the second degree inclusive, of a manager or a member of a
collective body for management and control of this public enterprise;
- is a director or member of an executive or supervisory body of another public enterprise;
- holds a senior public office position under Article 6, paragraph 1, items 1 - 38 and 41 - 45 of the Anti-
Corruption and Confiscation of Illegally Acquired Property Act, is a member of a political cabinet and secretary of a
municipality;
- has no university degree;
- does not have at least five years of professional experience;
- has been placed under interdiction or has been convicted of a criminal offense of a general nature;
- is deprived from the right to hold the respective office or does not meet other requirements, provided for in
the law.
(4) The Company may have one or two procurators, eligible persons for this position shall be those who meet the
aforesaid requirements.. The procurators are assigned and empowered by the Sole Owner of the Capital of the
Company. The contracts with the procurator(s) are signed by the Sole Owner of the Capital.
6.2.3. Functions
The Board of Directors is responsible for managing the Company and overseeing the activities of the Executive
Director(s), including the implementation of the Policies. It fulfills all responsibilities and makes decisions on matters
that do not fall under the exclusive jurisdiction of the Sole Owner of the Capital, as mandated by the law or these
Articles of Association. Additionally, the Board of Directors establishes its own Rules to govern its functioning.
The Board of Directors has the authority to establish specialized committees comprised of its members, such as
remuneration or risk management committees. These committees assist in preparing decisions that are ultimately
adopted by the Board of Directors. However, decision-making powers are not delegated to the committees themselves.
An independent board member serves as the chairperson for each committee.
The Board of Directors conducts annual evaluations of its own performance and effectiveness, which are then
presented to the governing body responsible for representing the State and the Public Enterprises and Control Agency.
6.2.4. Competence
(1) The Board of Directors carries out all the responsibilities and authorities of a Board of Directors as defined by
the law and the Articles of Association of BEH EAD.
(2)The Board of Directors:
Corporate Governance Statement
31 December 2022
10
- on their own behalf or on the behalf of a third party performs commercial transactions similar to those of the
Company;
- works under labor employment or under a status of a civil servant;
- is а partner in а general partnership, limited special partnership, or limited liability company, when it
performs an activity similar to that of the Company;
- has been а member of an executive or supervisory body of a company, terminated due to bankruptcy in the
last two years preceding the date of the bankruptcy where there are unsatisfied creditors;
- is declared insolvent as a sole trader or a general partner in a company, which has been declared insolvent, if
there are unsatisfied creditors left;
- is a spouse or a person in a de facto cohabitation, a relative in a straight line, or in a collateral line up to the
fourth degree inclusive, and by matchmaking - up to the second degree inclusive, of a manager or a member of a
collective body for management and control of this public enterprise;
- is a director or member of an executive or supervisory body of another public enterprise;
- holds a senior public office position under Article 6, paragraph 1, items 1 - 38 and 41 - 45 of the Anti-
Corruption and Confiscation of Illegally Acquired Property Act, is a member of a political cabinet and secretary of a
municipality;
- has no university degree;
- does not have at least five years of professional experience;
- has been placed under interdiction or has been convicted of a criminal offense of a general nature;
- is deprived from the right to hold the respective office or does not meet other requirements, provided for in
the law.
(4) The Company may have one or two procurators, eligible persons for this position shall be those who meet the
aforesaid requirements.. The procurators are assigned and empowered by the Sole Owner of the Capital of the
Company. The contracts with the procurator(s) are signed by the Sole Owner of the Capital.
6.2.3. Functions
The Board of Directors is responsible for managing the Company and overseeing the activities of the Executive
Director(s), including the implementation of the Policies. It fulfills all responsibilities and makes decisions on matters
that do not fall under the exclusive jurisdiction of the Sole Owner of the Capital, as mandated by the law or these
Articles of Association. Additionally, the Board of Directors establishes its own Rules to govern its functioning.
The Board of Directors has the authority to establish specialized committees comprised of its members, such as
remuneration or risk management committees. These committees assist in preparing decisions that are ultimately
adopted by the Board of Directors. However, decision-making powers are not delegated to the committees themselves.
An independent board member serves as the chairperson for each committee.
The Board of Directors conducts annual evaluations of its own performance and effectiveness, which are then
presented to the governing body responsible for representing the State and the Public Enterprises and Control Agency.
6.2.4. Competence
(1) The Board of Directors carries out all the responsibilities and authorities of a Board of Directors as defined by
the law and the Articles of Association of BEH EAD.
(2)The Board of Directors:
Bulgarian Energy Holding EAD
Corporate Governance Statement
31 December 2022
11
- organizes, manages and monitors the entire activity of the BEH EAD;
- prepares a business plan of the BEH EAD for the whole term and for each year separately and ensures
its implementation;
- implements the investment policy of the Group and decides on the acquisition of property and other
real estate rights;
- settles the issues related to the movement and the marketing of the equity securities of BEH EAD, the
bonds and the securities in civil turnover, which are not of the exclusive competence of the Sole Owner
of the Capital, or which have been delegated to it by the principal;
- elects one or two of its members as executive directors and authorizes them to manage and represent
the Company before third parties. In case two executive directors are elected, they represent the
Company in a manner determined by the board of directors;
- takes unanimous decisions on all transactions set forth in Art. 236, para. 2 of the Commercial Law;
- adopts Corporate Governance Policy, Financial and Accounting Policy, Information Technology
Policy, Human Resource Management Policy, Investment Management and Projects Policy, Public
Procurement Policy (including Policy for conducting tenders, competitions and direct contracts for the
supply of goods and delivery of works and services), Policy on tenders, competitions and direct
contracts for sale, exchange and leasing of fixed assets, Risk management and internal audit policy,
and other policies that are mandatory for the Company and its subsidiaries; it is also responsible for
implementing those Policies;
- makes proposals to the principal to resolve the issues that are within the competence of the Sole Owner
of the Capital and decides on any matters provided for resolution by the Board of Directors in this
Statute.
(3) With the prior written approval of the Principal, the Board of Directors may change the Executive Director at any
time and replace him/her with another member of the Board of Directors.
6.2.5. Contracts with members of the Board of BEH EAD, Remunerations and Expenses
(1) Each member of the Board of Directors concludes a management contract with the Sole Owner of the Capital. The
contract is concluded for a period until the end of the term of the Board of Directors and contains the rights and
obligations of the parties, the amount of remuneration and payment terms, the liability of the parties in case of default,
the grounds for termination of the contract and the type and amount of the guarantee that members provide for their
management and the amount of the penalty for early termination of the contract not by the fault of the member of the
Board of Directors.
(2) Members of the Board of Directors receive remuneration determined by the terms and conditions of the Rules on
the application of the Public Enterprises Act.
(3) The members of the Board of Directors must guarantee their management with the amount of three monthly
remunerations determined by the Sole Owner of the Capital. The guarantee is returned after termination of the contract
and after the decision of the Sole owner of the Company for discharge.
(4) In case of need for business trips, the members of the Board of Directors are seconded abroad by the Minister of
Energy according to the terms and conditions determined by him/her in compliance with current legislation and in
case of business trips in the country - by the Executive Director(s). The Executive Director(s) shall be seconded by
himself/themselves on behalf of the Company. When conducting meetings of the bodies of the Company, the expenses
for holding the meeting and for seconding the members of the Board of Directors, if the venue differs from the place
of residence of a member of the Board of Directors, shall be borne by the Company.
6.2.6. Statute of the chief (sole) executive member of the Board of Directors.
(1) The Board of Directors entrusts the Executive Director/s to manage and represent the Company. The non-executive
members of the Board of Directors control the activities of the Executive Director/Executive Directors.
(2) The sole Executive Director represents the Company independently and is entitled to perform all actions and
transactions related to the Company's activity, as well as to draw up and sign documents on behalf of the Company
and to authorize other persons to perform single activities and deals.
Corporate Governance Statement
31 December 2022
11
- organizes, manages and monitors the entire activity of the BEH EAD;
- prepares a business plan of the BEH EAD for the whole term and for each year separately and ensures
its implementation;
- implements the investment policy of the Group and decides on the acquisition of property and other
real estate rights;
- settles the issues related to the movement and the marketing of the equity securities of BEH EAD, the
bonds and the securities in civil turnover, which are not of the exclusive competence of the Sole Owner
of the Capital, or which have been delegated to it by the principal;
- elects one or two of its members as executive directors and authorizes them to manage and represent
the Company before third parties. In case two executive directors are elected, they represent the
Company in a manner determined by the board of directors;
- takes unanimous decisions on all transactions set forth in Art. 236, para. 2 of the Commercial Law;
- adopts Corporate Governance Policy, Financial and Accounting Policy, Information Technology
Policy, Human Resource Management Policy, Investment Management and Projects Policy, Public
Procurement Policy (including Policy for conducting tenders, competitions and direct contracts for the
supply of goods and delivery of works and services), Policy on tenders, competitions and direct
contracts for sale, exchange and leasing of fixed assets, Risk management and internal audit policy,
and other policies that are mandatory for the Company and its subsidiaries; it is also responsible for
implementing those Policies;
- makes proposals to the principal to resolve the issues that are within the competence of the Sole Owner
of the Capital and decides on any matters provided for resolution by the Board of Directors in this
Statute.
(3) With the prior written approval of the Principal, the Board of Directors may change the Executive Director at any
time and replace him/her with another member of the Board of Directors.
6.2.5. Contracts with members of the Board of BEH EAD, Remunerations and Expenses
(1) Each member of the Board of Directors concludes a management contract with the Sole Owner of the Capital. The
contract is concluded for a period until the end of the term of the Board of Directors and contains the rights and
obligations of the parties, the amount of remuneration and payment terms, the liability of the parties in case of default,
the grounds for termination of the contract and the type and amount of the guarantee that members provide for their
management and the amount of the penalty for early termination of the contract not by the fault of the member of the
Board of Directors.
(2) Members of the Board of Directors receive remuneration determined by the terms and conditions of the Rules on
the application of the Public Enterprises Act.
(3) The members of the Board of Directors must guarantee their management with the amount of three monthly
remunerations determined by the Sole Owner of the Capital. The guarantee is returned after termination of the contract
and after the decision of the Sole owner of the Company for discharge.
(4) In case of need for business trips, the members of the Board of Directors are seconded abroad by the Minister of
Energy according to the terms and conditions determined by him/her in compliance with current legislation and in
case of business trips in the country - by the Executive Director(s). The Executive Director(s) shall be seconded by
himself/themselves on behalf of the Company. When conducting meetings of the bodies of the Company, the expenses
for holding the meeting and for seconding the members of the Board of Directors, if the venue differs from the place
of residence of a member of the Board of Directors, shall be borne by the Company.
6.2.6. Statute of the chief (sole) executive member of the Board of Directors.
(1) The Board of Directors entrusts the Executive Director/s to manage and represent the Company. The non-executive
members of the Board of Directors control the activities of the Executive Director/Executive Directors.
(2) The sole Executive Director represents the Company independently and is entitled to perform all actions and
transactions related to the Company's activity, as well as to draw up and sign documents on behalf of the Company
and to authorize other persons to perform single activities and deals.
Bulgarian Energy Holding EAD
Corporate Governance Statement
31 December 2022
12
(3) The Executive Director organizes the activities of the Company in compliance with the law, the Statute, the
decisions of the Sole Owner of the Capital, the Policies and the Decisions of the Board of Directors. He/she undertakes
the operational management of the Company activities, concludes and terminates the labor and other contracts of the
employees and the partners of the Company and is responsible for the Company's records and archives The Executive
Director has the authority to take decisions on all matters that do not fall within the exclusive jurisdiction of the Sole
Owner of the Capital or the Board of Directors, as defined by the law, present articles of association, or as delegated
by the decision of the Sole Owner of the Capital.
(4) The management contract with the Executive Director, a member of the Board of Directors, is signed by the
Chairman or, respectively, by the Deputy Chairman of the Board of Directors. The Executive Director signs the
contracts with other members of the Board of Directors unless the representative of the Sole Owner of the Capital
signs these contracts himself/herself.
(5) The Deputy Executive Director in charge of the IGB Project performs, independently, without the need for
decisions or approval of the Board of Directors, аll actions and activities related to the IGB Project, such as:
1. Prepares and submits for approval/permission by the Minister of Energy all issues under Article 20, paragraph
2, item 12а from the Articles of association of the Company;
2. Performs all operational activities necessary for the current work and operational management of the IGB Project
and for the preparation of the documents, which are submitted for approval/permission to the Minister of Energy;
3. Has the ability to autonomously seek expert assistance from all departments within the Holding for the IGB
Project;
4. Carries out communication and approves the work and expenses of all external consultants of the Company
under the IGB Project;
5. Represents the Holding before third parties and signs documents, contracts, agreements, including commitments
on behalf of the Holding on all issues of the IGB Project, upon authorization by the Executive Director and
subject to the prior approval of the Minister of Energy.
6.2.7. Representation of BEH EAD
The Company is represented before third parties by the sole Executive Director, and in case of more than one
Executive Director, they represent the company in manner according to Decision of the Bord of the Directors and in
all matters related to the implementation of the IGB Project, including the state-guaranteed Loan agreement between
BEH EAD and the European Investment Bank that has been concluded for the purposes of financing the IGB Project,
and of the Loan Contract between BEH EAD and ICGB AD that will be concluded based on the Loan Contract
between BEH EAD and the European Investment Bank, for the purpose of financing the IGB Project, by an authorized
Deputy Executive Director, at the discretion of the Sole Owner of the Capital.
6.3. Audit committee
6.3.1. Composition
As of 31.12.2022 the composition of the Audit Committee of BEH EAD, appointed by a decision under Protocol NoE -
РД -21-18 / 28.06.2018 of the Minister of Energy is as follows:
Magdalena Georgieva Lateva – Chairman
Vania Doneva Georgieva – Member
Elena Angelova Stoilova – Member
6.3.2. Status
The committee is a specialized, supervisory, consultative body. The Members of the Committee are appointed by the
Minister of Energy of the Republic of Bulgaria in his/her capacity of the Sole Owner of the Capital of BEH EAD upon
suggestion of the Board of Directors of BEH EAD. The committee consists of 3 to 5 members as one of them is a
chairman.
Corporate Governance Statement
31 December 2022
12
(3) The Executive Director organizes the activities of the Company in compliance with the law, the Statute, the
decisions of the Sole Owner of the Capital, the Policies and the Decisions of the Board of Directors. He/she undertakes
the operational management of the Company activities, concludes and terminates the labor and other contracts of the
employees and the partners of the Company and is responsible for the Company's records and archives The Executive
Director has the authority to take decisions on all matters that do not fall within the exclusive jurisdiction of the Sole
Owner of the Capital or the Board of Directors, as defined by the law, present articles of association, or as delegated
by the decision of the Sole Owner of the Capital.
(4) The management contract with the Executive Director, a member of the Board of Directors, is signed by the
Chairman or, respectively, by the Deputy Chairman of the Board of Directors. The Executive Director signs the
contracts with other members of the Board of Directors unless the representative of the Sole Owner of the Capital
signs these contracts himself/herself.
(5) The Deputy Executive Director in charge of the IGB Project performs, independently, without the need for
decisions or approval of the Board of Directors, аll actions and activities related to the IGB Project, such as:
1. Prepares and submits for approval/permission by the Minister of Energy all issues under Article 20, paragraph
2, item 12а from the Articles of association of the Company;
2. Performs all operational activities necessary for the current work and operational management of the IGB Project
and for the preparation of the documents, which are submitted for approval/permission to the Minister of Energy;
3. Has the ability to autonomously seek expert assistance from all departments within the Holding for the IGB
Project;
4. Carries out communication and approves the work and expenses of all external consultants of the Company
under the IGB Project;
5. Represents the Holding before third parties and signs documents, contracts, agreements, including commitments
on behalf of the Holding on all issues of the IGB Project, upon authorization by the Executive Director and
subject to the prior approval of the Minister of Energy.
6.2.7. Representation of BEH EAD
The Company is represented before third parties by the sole Executive Director, and in case of more than one
Executive Director, they represent the company in manner according to Decision of the Bord of the Directors and in
all matters related to the implementation of the IGB Project, including the state-guaranteed Loan agreement between
BEH EAD and the European Investment Bank that has been concluded for the purposes of financing the IGB Project,
and of the Loan Contract between BEH EAD and ICGB AD that will be concluded based on the Loan Contract
between BEH EAD and the European Investment Bank, for the purpose of financing the IGB Project, by an authorized
Deputy Executive Director, at the discretion of the Sole Owner of the Capital.
6.3. Audit committee
6.3.1. Composition
As of 31.12.2022 the composition of the Audit Committee of BEH EAD, appointed by a decision under Protocol NoE -
РД -21-18 / 28.06.2018 of the Minister of Energy is as follows:
Magdalena Georgieva Lateva – Chairman
Vania Doneva Georgieva – Member
Elena Angelova Stoilova – Member
6.3.2. Status
The committee is a specialized, supervisory, consultative body. The Members of the Committee are appointed by the
Minister of Energy of the Republic of Bulgaria in his/her capacity of the Sole Owner of the Capital of BEH EAD upon
suggestion of the Board of Directors of BEH EAD. The committee consists of 3 to 5 members as one of them is a
chairman.
Bulgarian Energy Holding EAD
Corporate Governance Statement
31 December 2022
13
6.3.3. Remuneration
The remuneration of the members of the audit committee is determined by the Minister of Energy and is at the expense
of BEH EAD b y Protocol No.Е - РД -21-7 of 26.02.2021 the Minister of Energy determines the remuneration of the
members of the Audit Committee as follows:
- A member of the Audit committee shall receive 80 percent from the monthly remuneration of a member of
the Board of Directors of the Company.
- The chairman of the Audit committee shall receive 85 percent from the monthly remuneration of a member
of the Board of Directors of the Company.
By Protocol No.Е - РД -21-25 of 29.08.2017 the Minister of Energy has approved the Statute of the Audit Committee
of BEH EAD.
6.3.4. Duties and authority
(1) The Audit committee implements its activity in accordance with the requirements of the Independent Financial
Audit Act, Regulation (ЕO) No.537/2014 of the European Parliament and of the Council of April 16, 2014 with regard
to specific requirements on the statutory audit of enterprises of public interest and repealing a Decision 2005/909/ЕC
of the Commission (Regulation (ЕU) No.537/2014), Directive 2014/56 and Directive 2006/43 of the European
Parliament and of the Council and the present statute.
(2) The committee shall have the following authority:
- to monitor the financial reporting process and make recommendations or suggestions to ensure its effectiveness;
- to review and upon a discretion to express opinion on the accounting policy of the holding and its implementation
upon the financial reporting;
- to monitor the effectiveness of the adopted current controls upon the monthly review of the financial statement of
BEH EAD;
- to observe the due and reliable submission of financial information from the subsidiary companies upon the drawing
up of the annual consolidated financial statement of BEH EAD;
- to monitor the effectiveness of the internal control system, of the risk management system and the activity on internal
audit with regard to the financial reporting at BEH EAD;
- to review and express opinion on the risk management strategy, the risk-register of the holding and the annual report
on the condition of the financial management and control system;
- to express opinion on the stature and membership of the internal audit unit and on the strategic and annual plans for
the internal audit activity;
- discusses and adopts the Annual report on the internal audit activity and if necessary, makes itself aware of and
provide opinions on individual audit reports from audit commitments made as well as on all significant issues,
related to the internal audit;
- to be in charge for the procedure on selection of the certified auditor, except for in the cases, when the audited
enterprise has a selection committee and recommends its appointment;
- to verify and monitor the independence of the statutory auditor and to take decisions in the cases provided by the
law, in accordance with the requirements of Chapters 6 and 7 of the Independent Financial Audit Act, and with Art.
6 of Regulation (EU) No 537/2014, including the advisability of providing services outside the audit under Art. 5 of
the same Regulation;
- to supervise the statutory audit of annual and consolidated financial statements, including its performance, taking
into account the findings and conclusions of the Commission for Public Oversight on Statutory Auditors regarding
the application of Art. 26, para. 6 of Regulation (EU) No 537/2014;
Corporate Governance Statement
31 December 2022
13
6.3.3. Remuneration
The remuneration of the members of the audit committee is determined by the Minister of Energy and is at the expense
of BEH EAD b y Protocol No.Е - РД -21-7 of 26.02.2021 the Minister of Energy determines the remuneration of the
members of the Audit Committee as follows:
- A member of the Audit committee shall receive 80 percent from the monthly remuneration of a member of
the Board of Directors of the Company.
- The chairman of the Audit committee shall receive 85 percent from the monthly remuneration of a member
of the Board of Directors of the Company.
By Protocol No.Е - РД -21-25 of 29.08.2017 the Minister of Energy has approved the Statute of the Audit Committee
of BEH EAD.
6.3.4. Duties and authority
(1) The Audit committee implements its activity in accordance with the requirements of the Independent Financial
Audit Act, Regulation (ЕO) No.537/2014 of the European Parliament and of the Council of April 16, 2014 with regard
to specific requirements on the statutory audit of enterprises of public interest and repealing a Decision 2005/909/ЕC
of the Commission (Regulation (ЕU) No.537/2014), Directive 2014/56 and Directive 2006/43 of the European
Parliament and of the Council and the present statute.
(2) The committee shall have the following authority:
- to monitor the financial reporting process and make recommendations or suggestions to ensure its effectiveness;
- to review and upon a discretion to express opinion on the accounting policy of the holding and its implementation
upon the financial reporting;
- to monitor the effectiveness of the adopted current controls upon the monthly review of the financial statement of
BEH EAD;
- to observe the due and reliable submission of financial information from the subsidiary companies upon the drawing
up of the annual consolidated financial statement of BEH EAD;
- to monitor the effectiveness of the internal control system, of the risk management system and the activity on internal
audit with regard to the financial reporting at BEH EAD;
- to review and express opinion on the risk management strategy, the risk-register of the holding and the annual report
on the condition of the financial management and control system;
- to express opinion on the stature and membership of the internal audit unit and on the strategic and annual plans for
the internal audit activity;
- discusses and adopts the Annual report on the internal audit activity and if necessary, makes itself aware of and
provide opinions on individual audit reports from audit commitments made as well as on all significant issues,
related to the internal audit;
- to be in charge for the procedure on selection of the certified auditor, except for in the cases, when the audited
enterprise has a selection committee and recommends its appointment;
- to verify and monitor the independence of the statutory auditor and to take decisions in the cases provided by the
law, in accordance with the requirements of Chapters 6 and 7 of the Independent Financial Audit Act, and with Art.
6 of Regulation (EU) No 537/2014, including the advisability of providing services outside the audit under Art. 5 of
the same Regulation;
- to supervise the statutory audit of annual and consolidated financial statements, including its performance, taking
into account the findings and conclusions of the Commission for Public Oversight on Statutory Auditors regarding
the application of Art. 26, para. 6 of Regulation (EU) No 537/2014;
Bulgarian Energy Holding EAD
Corporate Governance Statement
31 December 2022
14
- makes itself aware of the audit strategy and the audit plan of the statutory audit and expresses opinion on them, by
judging the arguments in support of important decisions and a choice made in the stage of planning;
- to perform monitoring on the implementation of the audit plan by giving recommendations to the Holding
management and the auditors for elimination of difficulties.
- reviews the draft audit reports under Art. 59 and Art. 60 of the Independent Financial Audit Act and the identified
key audit issues, the findings and the auditor's opinion, as well as forms an opinion on the annual work of the
statutory auditor, which includes: independence of the auditor; objectivity and professional skepticism; composition
of the audit team; findings from audits by the Commission for Public Oversight on Statutory Auditors;
communication and relationships with BEH EAD's management. The annual opinion is formed on the basis of
criteria adopted by the Audit Committee and communicated in advance with the auditor;
- t o discuss the additional auditor's report (drawn up in accordance with art. 11, i. 2 of Regulation (ЕU) No.537/2014)
and gives recommendations to the management of BEH EAD for removing the significant weaknesses and failures,
found in the report;
- for the purposes of coordinating the relations with the Audit Committees of the subsidiaries of the Holding, the
Committee is entitled, following the approval of the Board of Directors of BEH EAD:
- to request information from the Audit Committees of the subsidiaries in connection with the performance of
its activities and, if necessary, to inform the Board of Directors of BEH EAD when it considers that there are
facts and circumstances that are relevant for the activity of the respective subsidiary;
- to carry out investigations within its powers in the respective subsidiaries of BEH EAD after informing the
management of BEH EAD and the management of the respective subsidiary. The investigations may be
carried out at the proposal of any member of the Committee. The decision to conduct the investigation shall
determine its term and subject, as well as the persons to conduct it.
7. INFORMATION PURSUANT TO ARTICLE 100n, paragraph 8, item 6 of POSA
Being a public enterprise, BEH EAD adheres to the provisions of the Public Enterprises Act and its bylaws,
as it does not implement a specific Remuneration Policy. The Board of Directors of BEH EAD is appointed by official
decision of the Minister of Energy after conducting a competition, under the conditions and order provided for in the
Rules on the Implementation of the Public Enterprises Act, according to which the principles of publicity,
transparency, free and loyal competition, equality and proportionality have to be complied with upon conduction of
the competition procedures, and no discrimination should be allowed.
IVAN ANDREEV ANDREY ZHIVKOV
EXECUTIVE DIRECTOR EXECUTIVE DIRECTOR
BULGARIAN ENERGY HOLDING EAD BULGARIAN ENERGY HOLDING EAD
Corporate Governance Statement
31 December 2022
14
- makes itself aware of the audit strategy and the audit plan of the statutory audit and expresses opinion on them, by
judging the arguments in support of important decisions and a choice made in the stage of planning;
- to perform monitoring on the implementation of the audit plan by giving recommendations to the Holding
management and the auditors for elimination of difficulties.
- reviews the draft audit reports under Art. 59 and Art. 60 of the Independent Financial Audit Act and the identified
key audit issues, the findings and the auditor's opinion, as well as forms an opinion on the annual work of the
statutory auditor, which includes: independence of the auditor; objectivity and professional skepticism; composition
of the audit team; findings from audits by the Commission for Public Oversight on Statutory Auditors;
communication and relationships with BEH EAD's management. The annual opinion is formed on the basis of
criteria adopted by the Audit Committee and communicated in advance with the auditor;
- t o discuss the additional auditor's report (drawn up in accordance with art. 11, i. 2 of Regulation (ЕU) No.537/2014)
and gives recommendations to the management of BEH EAD for removing the significant weaknesses and failures,
found in the report;
- for the purposes of coordinating the relations with the Audit Committees of the subsidiaries of the Holding, the
Committee is entitled, following the approval of the Board of Directors of BEH EAD:
- to request information from the Audit Committees of the subsidiaries in connection with the performance of
its activities and, if necessary, to inform the Board of Directors of BEH EAD when it considers that there are
facts and circumstances that are relevant for the activity of the respective subsidiary;
- to carry out investigations within its powers in the respective subsidiaries of BEH EAD after informing the
management of BEH EAD and the management of the respective subsidiary. The investigations may be
carried out at the proposal of any member of the Committee. The decision to conduct the investigation shall
determine its term and subject, as well as the persons to conduct it.
7. INFORMATION PURSUANT TO ARTICLE 100n, paragraph 8, item 6 of POSA
Being a public enterprise, BEH EAD adheres to the provisions of the Public Enterprises Act and its bylaws,
as it does not implement a specific Remuneration Policy. The Board of Directors of BEH EAD is appointed by official
decision of the Minister of Energy after conducting a competition, under the conditions and order provided for in the
Rules on the Implementation of the Public Enterprises Act, according to which the principles of publicity,
transparency, free and loyal competition, equality and proportionality have to be complied with upon conduction of
the competition procedures, and no discrimination should be allowed.
IVAN ANDREEV ANDREY ZHIVKOV
EXECUTIVE DIRECTOR EXECUTIVE DIRECTOR
BULGARIAN ENERGY HOLDING EAD BULGARIAN ENERGY HOLDING EAD
Annual Separate Financial Statements
Bulgarian Energy Holding EAD
31 December 2022
Bulgarian Energy Holding EAD
31 December 2022
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
1
Separate Statement of Profit or Loss
for the year ended on 31 December
Notes 2022 2021
BGN’000 BGN ’000
Dividend income 5 1,019,414 762,748
Revenue from contracts with customers 6 2,608 1,056
Revenue 1,022,022 763,804
Other income 7 232 2,966
Impairment costs 8 (1,136,343) (527,058)
Cost of materials 9 (230) (99)
Hired services expenses 10 (4,342) (2,631)
Depreciation and amortization charges 19, 20 (447) (455)
Employee benefits expenses 12 (7,792) (5,343)
Expenses for provisions 34 (754) (754)
Other expenses 13 (480) (394)
(Loss)/profit from operating activities (128,134) 230,036
Finance income 14 742,221 216,297
Finance costs 15 (80,547) (174,456)
Profit before tax 533,540 271,877
Income tax income 16 48,521 48,951
Net profit for the year 582,061 320,828
BGN BGN
Earnings per share 17 0.1681 0.0926
Ivan Andreev Andrey Zhivkov Marieta Velikova
Executive Director Executive Director Chief Accountant
Date: 25 March 2023
The separate financial statements were approved for issue by the Board of Directors of BEH EAD on 4 May 2023.
The notes on pages 8 to 67 form an integral part of the separate financial statements.
Auditors’ report issued by:
Grant Thornton Ltd. Zaharinova Nexia EOOD
Audit firm with reg. No .032 Audit firm with reg. No .138
Mariy Apostolov Silvia Dinova Dimitrina Zaharinova Stoycho Milev
Manager Registered Auditor Manager Registered Auditor
Separate Financial Statements
31 December 2022
1
Separate Statement of Profit or Loss
for the year ended on 31 December
Notes 2022 2021
BGN’000 BGN ’000
Dividend income 5 1,019,414 762,748
Revenue from contracts with customers 6 2,608 1,056
Revenue 1,022,022 763,804
Other income 7 232 2,966
Impairment costs 8 (1,136,343) (527,058)
Cost of materials 9 (230) (99)
Hired services expenses 10 (4,342) (2,631)
Depreciation and amortization charges 19, 20 (447) (455)
Employee benefits expenses 12 (7,792) (5,343)
Expenses for provisions 34 (754) (754)
Other expenses 13 (480) (394)
(Loss)/profit from operating activities (128,134) 230,036
Finance income 14 742,221 216,297
Finance costs 15 (80,547) (174,456)
Profit before tax 533,540 271,877
Income tax income 16 48,521 48,951
Net profit for the year 582,061 320,828
BGN BGN
Earnings per share 17 0.1681 0.0926
Ivan Andreev Andrey Zhivkov Marieta Velikova
Executive Director Executive Director Chief Accountant
Date: 25 March 2023
The separate financial statements were approved for issue by the Board of Directors of BEH EAD on 4 May 2023.
The notes on pages 8 to 67 form an integral part of the separate financial statements.
Auditors’ report issued by:
Grant Thornton Ltd. Zaharinova Nexia EOOD
Audit firm with reg. No .032 Audit firm with reg. No .138
Mariy Apostolov Silvia Dinova Dimitrina Zaharinova Stoycho Milev
Manager Registered Auditor Manager Registered Auditor
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
2
Separate Statement of Comprehensive Income
for the year ended on 31 December
Notes 2022 2021
BGN ’000 BGN ’000
Profit for the year 582,061 320,828
Other comprehensive income:
Items that are not reclassified to profit or loss:
Revaluation of property, plant and equipment 19 - 136
Income tax related to items that are not reclassified to profit
or loss - (14)
- 122
Net change in the fair value of equity instruments 24 62 (127)
Income tax related to items that are not reclassified to profit
or loss (6) 13
56 (114)
Remeasurement of defined benefit liability 30 88 (33)
Income tax related to items that are not reclassified to profit
or loss (9) 3
79 (30)
Other comprehensive income for the year, net of tax 135 (22)
Total comprehensive income for the year, net of tax 582,196 320,806
Ivan Andreev Andrey Zhivkov Marieta Velikova
Executive Director Executive Director Chief Accountant
Date: 25 March 2023
The separate financial statements were approved for issue by the Board of Directors of BEH EAD on 4 May 2023.
The notes on pages 8 to 67 form an integral part of the separate financial statements.
Auditors’ report issued by:
Grant Thornton Ltd. Zaharinova Nexia EOOD
Audit firm with reg. No .032 Audit firm with reg. No .138
Mariy Apostolov Silvia Dinova Dimitrina Zaharinova Stoycho Milev
Manager Registered Auditor Manager Registered Auditor
Separate Financial Statements
31 December 2022
2
Separate Statement of Comprehensive Income
for the year ended on 31 December
Notes 2022 2021
BGN ’000 BGN ’000
Profit for the year 582,061 320,828
Other comprehensive income:
Items that are not reclassified to profit or loss:
Revaluation of property, plant and equipment 19 - 136
Income tax related to items that are not reclassified to profit
or loss - (14)
- 122
Net change in the fair value of equity instruments 24 62 (127)
Income tax related to items that are not reclassified to profit
or loss (6) 13
56 (114)
Remeasurement of defined benefit liability 30 88 (33)
Income tax related to items that are not reclassified to profit
or loss (9) 3
79 (30)
Other comprehensive income for the year, net of tax 135 (22)
Total comprehensive income for the year, net of tax 582,196 320,806
Ivan Andreev Andrey Zhivkov Marieta Velikova
Executive Director Executive Director Chief Accountant
Date: 25 March 2023
The separate financial statements were approved for issue by the Board of Directors of BEH EAD on 4 May 2023.
The notes on pages 8 to 67 form an integral part of the separate financial statements.
Auditors’ report issued by:
Grant Thornton Ltd. Zaharinova Nexia EOOD
Audit firm with reg. No .032 Audit firm with reg. No .138
Mariy Apostolov Silvia Dinova Dimitrina Zaharinova Stoycho Milev
Manager Registered Auditor Manager Registered Auditor
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
3
Separate Statement of Financial Position
as at 31 December
Notes 31 December
2022
31 December
2021
BGN ‘000 BGN ‘000
ASSETS
Non-current assets
Investments in subsidiaries, associates and joint ventures 18 3,116,477 3,081,617
Loans granted to related parties 32.1 1.268,430 2,279,532
Trade receivables from related parties 32.3 - 25,880
Receivables from Toplofikatsia Sofia EAD 23 - 51,305
Property, plant and equipment 19 7,627 5,500
Intangible assets 20 270 299
Deferred tax assets 21 232,357 170,919
Trade and other receivables 22 12 1
4,625,173 5,615,053
Current assets
Loans granted to related parties 32.1 369,783 88,891
Receivables from Toplofikatsia Sofia EAD 23 46,292 235,870
Trade receivables from related parties 32.3 12,221 21,287
Trade and other receivables 22 45,182 49,769
Greenhouse gas emission allowances 6 12,645 22,339
Overpaid income tax 2,068 4,600
Financial assets at fair value 24 656 568
Inventory 4 3
Cash and cash equivalents 25 2,289,617 730,011
2,778,468 1,153,338
TOTAL ASSETS 7,403,641 6,768,391
Ivan Andreev Andrey Zhivkov Marieta Velikova
Executive Director Executive Director Chief Accountant
Date: 25 March 2023
The separate financial statements were approved for issue by the Board of Directors of BEH EAD on 4 May 2023.
The notes on pages 8 to 67 form an integral part of the separate financial statements.
Auditors’ report issued by:
Grant Thornton Ltd. Zaharinova Nexia EOOD
Audit firm with reg. No 032 Audit firm with reg. No 138
Mariy Apostolov Silvia Dinova Dimitrina Zaharinova Stoycho Milev
Manager Registered Auditor Manager Registered Auditor
Separate Financial Statements
31 December 2022
3
Separate Statement of Financial Position
as at 31 December
Notes 31 December
2022
31 December
2021
BGN ‘000 BGN ‘000
ASSETS
Non-current assets
Investments in subsidiaries, associates and joint ventures 18 3,116,477 3,081,617
Loans granted to related parties 32.1 1.268,430 2,279,532
Trade receivables from related parties 32.3 - 25,880
Receivables from Toplofikatsia Sofia EAD 23 - 51,305
Property, plant and equipment 19 7,627 5,500
Intangible assets 20 270 299
Deferred tax assets 21 232,357 170,919
Trade and other receivables 22 12 1
4,625,173 5,615,053
Current assets
Loans granted to related parties 32.1 369,783 88,891
Receivables from Toplofikatsia Sofia EAD 23 46,292 235,870
Trade receivables from related parties 32.3 12,221 21,287
Trade and other receivables 22 45,182 49,769
Greenhouse gas emission allowances 6 12,645 22,339
Overpaid income tax 2,068 4,600
Financial assets at fair value 24 656 568
Inventory 4 3
Cash and cash equivalents 25 2,289,617 730,011
2,778,468 1,153,338
TOTAL ASSETS 7,403,641 6,768,391
Ivan Andreev Andrey Zhivkov Marieta Velikova
Executive Director Executive Director Chief Accountant
Date: 25 March 2023
The separate financial statements were approved for issue by the Board of Directors of BEH EAD on 4 May 2023.
The notes on pages 8 to 67 form an integral part of the separate financial statements.
Auditors’ report issued by:
Grant Thornton Ltd. Zaharinova Nexia EOOD
Audit firm with reg. No 032 Audit firm with reg. No 138
Mariy Apostolov Silvia Dinova Dimitrina Zaharinova Stoycho Milev
Manager Registered Auditor Manager Registered Auditor
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
4
Separate Statement of Financial Position
as at 31 December (continued)
Notes 31 December
2022
31 December
2021
BGN ’000 BGN ’000
EQUITY AND LIABILITIES
Equity
Share capital 27.1 3,462,942 3,462,942
Other reserves 27.2 380,491 380,491
Reserve from revaluation of financial assets at fair value
through other comprehensive income 27.3 267 188
Revaluation reserve of non-financial assets 27.4 770 770
Reserve from remeasurement of defined benefit plans 27.5 (240) (296)
Retained earnings 639,859 248,509
Total equity 4,484,089 4,092,604
Non-current liabilities
Issued bonds 28 2,341,888 2,340,556
Long-term borrowings 29 214,946 176,025
Long-term borrowings from related parties 32.2 27,270 -
Long-term related party payables 32.3 - 2.914
Trade and other payables 31 395 23
Pension and other employee obligations 30 755 721
Provisions 34 53,100 52,346
2,638,354 2,572,585
Current liabilities
Issued bonds 28 33,691 33,691
Short-term borrowings 29 433 149
Short-term borrowings from related parties 32.2 185,958 -
Trade and other payables 31 3,432 3,519
Short-term related party payables 32.3 57,481 65,650
Pension and other employee obligations 30 203 193
281,198 103,202
Total liabilities 2,919,552 2,675,787
TOTAL EQUITY AND LIABILITIES 7,403,641 6,768,391
Ivan Andreev Andrey Zhivkov Marieta Velikova
Executive Director Executive Director Chief Accountant
Date: 25 March 2023
The separate financial statements were approved for issue by the Board of Directors of BEH EAD on 4 May 2023.
The notes on pages 8 to 67 form an integral part of the separate financial statements.
Auditors’ report issued by:
Grant Thornton Ltd. Zaharinova Nexia EOOD
Audit firm with reg. No .032 Audit firm with reg. No .138
Mariy Apostolov Silvia Dinova Dimitrina Zaharinova Stoycho Milev
Manager Registered Auditor Manager Registered Auditor
Separate Financial Statements
31 December 2022
4
Separate Statement of Financial Position
as at 31 December (continued)
Notes 31 December
2022
31 December
2021
BGN ’000 BGN ’000
EQUITY AND LIABILITIES
Equity
Share capital 27.1 3,462,942 3,462,942
Other reserves 27.2 380,491 380,491
Reserve from revaluation of financial assets at fair value
through other comprehensive income 27.3 267 188
Revaluation reserve of non-financial assets 27.4 770 770
Reserve from remeasurement of defined benefit plans 27.5 (240) (296)
Retained earnings 639,859 248,509
Total equity 4,484,089 4,092,604
Non-current liabilities
Issued bonds 28 2,341,888 2,340,556
Long-term borrowings 29 214,946 176,025
Long-term borrowings from related parties 32.2 27,270 -
Long-term related party payables 32.3 - 2.914
Trade and other payables 31 395 23
Pension and other employee obligations 30 755 721
Provisions 34 53,100 52,346
2,638,354 2,572,585
Current liabilities
Issued bonds 28 33,691 33,691
Short-term borrowings 29 433 149
Short-term borrowings from related parties 32.2 185,958 -
Trade and other payables 31 3,432 3,519
Short-term related party payables 32.3 57,481 65,650
Pension and other employee obligations 30 203 193
281,198 103,202
Total liabilities 2,919,552 2,675,787
TOTAL EQUITY AND LIABILITIES 7,403,641 6,768,391
Ivan Andreev Andrey Zhivkov Marieta Velikova
Executive Director Executive Director Chief Accountant
Date: 25 March 2023
The separate financial statements were approved for issue by the Board of Directors of BEH EAD on 4 May 2023.
The notes on pages 8 to 67 form an integral part of the separate financial statements.
Auditors’ report issued by:
Grant Thornton Ltd. Zaharinova Nexia EOOD
Audit firm with reg. No .032 Audit firm with reg. No .138
Mariy Apostolov Silvia Dinova Dimitrina Zaharinova Stoycho Milev
Manager Registered Auditor Manager Registered Auditor
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
5
Separate Statement of Changes in Equity
for the year ended on 31 December
Share
capital
Other
reserves
Reserve from
revaluation of
financial assets at fair
value through other
comprehensive income
Revaluation
reserve of
non-financial
assets
Reserve from
revaluation of
defined benefit
plans
Retained
earnings
Total
equity
BGN ’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
Balance as at 1 January 2022 3,462,942 380,491 188 770 (296) 248,509 4,092,604
Dividends - - - - - (190,711) (190,711)
Transactions with the sole owner - - - - - (190,711) (190,711)
Profit for the year - - - - - 582,061 582,061
Other comprehensive income - - 79 - 56 - 135
Total comprehensive income for the year - - 79 - 56 582,061 582,196
Balance as at 31 December 2022 3,462,942 380,491 267 770 (240) 639,859 4,484,089
Ivan Andreev Andrey Zhivkov Marieta Velikova
Executive Director Executive Director Chief Accountant
Date: 25 March 2023
The separate financial statements were approved for issue by the Board of Directors of BEH EAD on 4 May 2023.
The notes on pages 8 to 67 form an integral part of the separate financial statements.
Auditors’ report issued by:
Grant Thornton Ltd. Zaharinova Nexia EOOD
Audit firm with reg. No .032 Audit firm with reg. No .138
Mariy Apostolov Silvia Dinova Dimitrina Zaharinova Stoycho Milev
Manager Registered Auditor Manager Registered Auditor
Separate Financial Statements
31 December 2022
5
Separate Statement of Changes in Equity
for the year ended on 31 December
Share
capital
Other
reserves
Reserve from
revaluation of
financial assets at fair
value through other
comprehensive income
Revaluation
reserve of
non-financial
assets
Reserve from
revaluation of
defined benefit
plans
Retained
earnings
Total
equity
BGN ’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
Balance as at 1 January 2022 3,462,942 380,491 188 770 (296) 248,509 4,092,604
Dividends - - - - - (190,711) (190,711)
Transactions with the sole owner - - - - - (190,711) (190,711)
Profit for the year - - - - - 582,061 582,061
Other comprehensive income - - 79 - 56 - 135
Total comprehensive income for the year - - 79 - 56 582,061 582,196
Balance as at 31 December 2022 3,462,942 380,491 267 770 (240) 639,859 4,484,089
Ivan Andreev Andrey Zhivkov Marieta Velikova
Executive Director Executive Director Chief Accountant
Date: 25 March 2023
The separate financial statements were approved for issue by the Board of Directors of BEH EAD on 4 May 2023.
The notes on pages 8 to 67 form an integral part of the separate financial statements.
Auditors’ report issued by:
Grant Thornton Ltd. Zaharinova Nexia EOOD
Audit firm with reg. No .032 Audit firm with reg. No .138
Mariy Apostolov Silvia Dinova Dimitrina Zaharinova Stoycho Milev
Manager Registered Auditor Manager Registered Auditor
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
6
Separate Statement of Changes in Equity
for the year ended on 31 December (continued)
Share capital Other
reserves
Reserve from
revaluation t of
financial assets at fair
value through other
comprehensive income
Revaluation
reserve of
non-financial
assets
Reserve from
revaluation of
defined benefit
plans
Retained
earnings /
(accumulated
loss)
Total equity
BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
Balance as of 1 January 2021 3,462,942 380,491 302 648 (266) (72,319) 3,771,798
Profit for the year - - - - - 320,828 320,828
Other comprehensive loss - - (114) 122 (30) - (22)
Total comprehensive income for the
year - - (114) 122 (30) 320,828 320,806
Balance as of 31 December 2021 3,462,942 380,491 188 770 (296) 248,509 4,092,604
Ivan Andreev Andrey Zhivkov Marieta Velikova
Executive Director Executive Director Chief Accountant
Date: 25 March 2023
The separate financial statements were approved for issue by the Board of Directors of BEH EAD on 4 May 2023.
The notes on pages 8 to 67 form an integral part of the separate financial statements.
Auditors’ report issued by:
Grant Thornton Ltd. Zaharinova Nexia EOOD
Audit firm with reg. No .032 Audit firm with reg. No .138
Mariy Apostolov Silvia Dinova Dimitrina Zaharinova Stoycho Milev
Manager Registered Auditor Manager Registered Auditor
Separate Financial Statements
31 December 2022
6
Separate Statement of Changes in Equity
for the year ended on 31 December (continued)
Share capital Other
reserves
Reserve from
revaluation t of
financial assets at fair
value through other
comprehensive income
Revaluation
reserve of
non-financial
assets
Reserve from
revaluation of
defined benefit
plans
Retained
earnings /
(accumulated
loss)
Total equity
BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
Balance as of 1 January 2021 3,462,942 380,491 302 648 (266) (72,319) 3,771,798
Profit for the year - - - - - 320,828 320,828
Other comprehensive loss - - (114) 122 (30) - (22)
Total comprehensive income for the
year - - (114) 122 (30) 320,828 320,806
Balance as of 31 December 2021 3,462,942 380,491 188 770 (296) 248,509 4,092,604
Ivan Andreev Andrey Zhivkov Marieta Velikova
Executive Director Executive Director Chief Accountant
Date: 25 March 2023
The separate financial statements were approved for issue by the Board of Directors of BEH EAD on 4 May 2023.
The notes on pages 8 to 67 form an integral part of the separate financial statements.
Auditors’ report issued by:
Grant Thornton Ltd. Zaharinova Nexia EOOD
Audit firm with reg. No .032 Audit firm with reg. No .138
Mariy Apostolov Silvia Dinova Dimitrina Zaharinova Stoycho Milev
Manager Registered Auditor Manager Registered Auditor
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
7
Separate Statement of Cash Flow
for the year ended on 31 December Notes 2022 2021
BGN’000 BGN’000
Operating activities
Dividends received 961,897 727,283
Cash paid to suppliers 6 (2,100,595) (1,242,396)
Cash paid to employees and social security institutions (7,779) (5,173)
Proceeds from related parties, net 2,105,083 826,972
Payments to related parties for purchase of receivables from
Toplofikatsia Sofia EAD - (206,327)
Loans granted to related parties (1,279,295) (137,350)
Proceeds from loans granted to related parties 2,027,503 337,888
Interest received on loans granted to related parties 189,806 102,378
Proceeds from Toplofikatsia Sofia” EAD 51,542 41,090
Cash proceeds from customers 13 -
Cash flows from main activity 1,948,175 444,365
Interest received on current and deposit accounts 36 76
Fees and commissions paid (3,610) (1,128)
Foreign exchange losses (39) (28)
Cash received according to Decision of the Council of Ministers under
Energy Act 26 3,181,011 -
Cash paid according to Decision of the Council of Ministers under the
Energy Act 26 (3,181,011) -
Income tax paid (15,000) (4,854)
Income tax refunded 4,600 -
Other taxes refunded/(paid), net 650 (659)
Other cash proceeds from operating activities 80 752
Net cash flows from operating activities 1,934,892 438,524
Investing activities
Payments for property, plant and equipment (127) (55)
Payments for property, plant and equipment from related parties (5,508) -
Net cash flows from investing activities (5,635) (55)
Financing activities
Bond issue 29, 28 - 1,173,498
Payments under bond issue 29 - (1,075,707)
Proceeds from granted loans 29 38,921 117,350
Proceeds from loans granted from related parties 37,865 -
Loan payments to related parties (174,637)
Interest paid on bond issue 28, 28 (69,823) (93,513)
Interest paid on loans 29 (650) (221)
Interests paid on loans taken from related parties (4,180) -
Payments on issued bank guarantee (1,060) (1,044)
Lease payments to related parties (290) (342)
Lease payments (90) (53)
Dividends paid (190,711) -
Net cash flows from financing activities (364,655) 119,968
Net change in cash and cash equivalents 1,564,602 558,437
Cash and cash equivalents, beginning of year 732,443 174,006
Cash and cash equivalents, end of year 2,297,045 732,443
Effect from expected credit losses (7,428) (2,432)
Cash and cash equivalents as of 31 December 25 2,289,617 730,011
Ivan Andreev Andrey Zhivkov Marieta Velikova
Executive Director Executive Director Chief Accountant
Date: 25 March 2023
The separate financial statements were approved for issue by the Board of Directors of BEH EAD on 4 May 2023.
The notes on pages 8 to 67 form an integral part of the separate financial statements.
Auditors’ report issued by:
Grant Thornton Ltd. Zaharinova Nexia EOOD
Audit firm with reg. No 032 Audit firm with reg. No 138
Mariy Apostolov Silvia Dinova Dimitrina Zaharinova Stoycho Milev
Manager Registered Auditor Manager Registered Auditor
Separate Financial Statements
31 December 2022
7
Separate Statement of Cash Flow
for the year ended on 31 December Notes 2022 2021
BGN’000 BGN’000
Operating activities
Dividends received 961,897 727,283
Cash paid to suppliers 6 (2,100,595) (1,242,396)
Cash paid to employees and social security institutions (7,779) (5,173)
Proceeds from related parties, net 2,105,083 826,972
Payments to related parties for purchase of receivables from
Toplofikatsia Sofia EAD - (206,327)
Loans granted to related parties (1,279,295) (137,350)
Proceeds from loans granted to related parties 2,027,503 337,888
Interest received on loans granted to related parties 189,806 102,378
Proceeds from Toplofikatsia Sofia” EAD 51,542 41,090
Cash proceeds from customers 13 -
Cash flows from main activity 1,948,175 444,365
Interest received on current and deposit accounts 36 76
Fees and commissions paid (3,610) (1,128)
Foreign exchange losses (39) (28)
Cash received according to Decision of the Council of Ministers under
Energy Act 26 3,181,011 -
Cash paid according to Decision of the Council of Ministers under the
Energy Act 26 (3,181,011) -
Income tax paid (15,000) (4,854)
Income tax refunded 4,600 -
Other taxes refunded/(paid), net 650 (659)
Other cash proceeds from operating activities 80 752
Net cash flows from operating activities 1,934,892 438,524
Investing activities
Payments for property, plant and equipment (127) (55)
Payments for property, plant and equipment from related parties (5,508) -
Net cash flows from investing activities (5,635) (55)
Financing activities
Bond issue 29, 28 - 1,173,498
Payments under bond issue 29 - (1,075,707)
Proceeds from granted loans 29 38,921 117,350
Proceeds from loans granted from related parties 37,865 -
Loan payments to related parties (174,637)
Interest paid on bond issue 28, 28 (69,823) (93,513)
Interest paid on loans 29 (650) (221)
Interests paid on loans taken from related parties (4,180) -
Payments on issued bank guarantee (1,060) (1,044)
Lease payments to related parties (290) (342)
Lease payments (90) (53)
Dividends paid (190,711) -
Net cash flows from financing activities (364,655) 119,968
Net change in cash and cash equivalents 1,564,602 558,437
Cash and cash equivalents, beginning of year 732,443 174,006
Cash and cash equivalents, end of year 2,297,045 732,443
Effect from expected credit losses (7,428) (2,432)
Cash and cash equivalents as of 31 December 25 2,289,617 730,011
Ivan Andreev Andrey Zhivkov Marieta Velikova
Executive Director Executive Director Chief Accountant
Date: 25 March 2023
The separate financial statements were approved for issue by the Board of Directors of BEH EAD on 4 May 2023.
The notes on pages 8 to 67 form an integral part of the separate financial statements.
Auditors’ report issued by:
Grant Thornton Ltd. Zaharinova Nexia EOOD
Audit firm with reg. No 032 Audit firm with reg. No 138
Mariy Apostolov Silvia Dinova Dimitrina Zaharinova Stoycho Milev
Manager Registered Auditor Manager Registered Auditor
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
8
Notes to the Separate Financial Statements
1. Scope of activity
Bulgarian Energy Holding EAD is a sole-owner joint-stock company registered in Bulgaria, UIC 831373560. The
company is the successor of the State company Oil and Gas founded in 1973 and renamed to Gas Supply
(Gazosnabdyavane) in December 1975. In accordance with the Decree on Business Activities, in the beginning of
1990, the company was renamed to Bulgargaz. Pursuant to an order of the Council of Ministers, dated 12 May 1993,
Bulgargaz was transformed into a sole-owner joint stock company. With a transformation plan dated 27 October 2006
and its annexes, Bulgargaz EAD was transformed into Bulgargaz Holding EAD by the separation of two separate sole
joint-stock companies – Bulgartransgaz EAD and Bulgargaz EAD under the terms of Article 262 (d) of the
Commercial Act. Bulgartransgaz EAD and Bulgargaz EAD are legal successors of the respective portion of the
property (rights and obligations) of Bulgargaz Holding EAD. By virtue of Decision No. 45 dated 15 January 2007 the
transformation was registered in the Sofia City Court.
By virtue of Protocol No RD-21- 305 dated 18.09.2008 of the Minister of Economy and Energy, the Company’s name
was changed from Bulgargaz Holding EAD to Bulgarian Energy Holding EAD, and the capital was increased through
an in-kind contribution at nominal value of all the shares in the capital of the Natsionalna Elektricheska Kompania
EAD, NPP Kozloduy EAD, TPP Maritsa East 2 EAD, and Mini Maritsa Iztok EAD.
The Company’s registered office and headquarters are loca ted in Sofia, 1000, Oborishte District, 16 Veslets Str.
Bulgarian Energy Holding EAD has a scope of activity: Acquisition, evaluation and sale of participations in trading
companies operating in the fields of production, extraction, transmission, transit, storage, management, distribution,
sale and/or purchase of natural gas, electricity, thermal power, coal, as well as any other types of energy and raw
materials for the production and participation in the management of such companies, their financing, acquisition,
evaluation, issuance and sale of bonds, acquisition, evaluation and sale of patents, concession of licenses for use of
the above companies as well as performance of own production or trade activity.
As of 31 December 2022, Bulgarian Energy Holding EAD is managed by a Board of Directors (BD), which consists
of the following members: Veselina Lachezarova Kanatova-Buchkova - chairman of the Board of Directors, Angel
Emilov Yankov - deputy chairman of the Board of Directors, Ivan Todorov Andreev – Executive member, Diyan
Stanimirov Dimitrov - member of the Board of Directors, Anton Georgiev Simeonov - member of the Board of
Directors, Zheko Mihaylov Zhekov - member of the Board of Directors, and Stelian Penchev Koev - member of the
Board of Directors.
The sole and ultimate owner of the Company is the Republic of Bulgaria through the Minister of Energy.
As of 31 December 2022, the total number of employees of the Company hired with an employment contract is 94
people (31 December 2021: 80 people)
2.Basis for the preparation of the separate financial statements
The separate financial statements were prepared on a historical cost basis, except for property, plant and equipment,
which are presented under revalued amount, as well as of the capital instruments, designated for a fair value
measurement through other comprehensive income.
The separate financial statements are presented in Bulgarian Lev (BGN), which is also the functional currency of the
Company. All amounts are presented in thousand Bulgarian leva (BGN‘000) (including comparative information for
2021) unless otherwise stated.
The Company maintains its current accounting and prepares its financial statements in accordance with the
requirements of all the International Financial Reporting Standards (IFRS) which consist of: Financial Reporting
Standards, and of interpretations by the International Financial Reporting Interpretations Committee (IFRIC),
approved by the International Accounting Standards Board (IASB) and the International Accounting Standards and
the interpretations thereto of the Standing Interpretations Committee (SIC), approved by the International Accounting
Standards Board (IASB), which have been effectively in force since 1 January 2022 and have been adopted by the
European Commission.
These financial statements are the separate financial statements of Bulgarian Energy Holding EAD, where investments
in subsidiaries and jointly controlled entities are presented at acquisition price. In compliance with the requirements
of IFRS 10 Consolidated Financial Statements and the Accountancy Act, the Company also prepares and presents
consolidated financial statements.
Separate Financial Statements
31 December 2022
8
Notes to the Separate Financial Statements
1. Scope of activity
Bulgarian Energy Holding EAD is a sole-owner joint-stock company registered in Bulgaria, UIC 831373560. The
company is the successor of the State company Oil and Gas founded in 1973 and renamed to Gas Supply
(Gazosnabdyavane) in December 1975. In accordance with the Decree on Business Activities, in the beginning of
1990, the company was renamed to Bulgargaz. Pursuant to an order of the Council of Ministers, dated 12 May 1993,
Bulgargaz was transformed into a sole-owner joint stock company. With a transformation plan dated 27 October 2006
and its annexes, Bulgargaz EAD was transformed into Bulgargaz Holding EAD by the separation of two separate sole
joint-stock companies – Bulgartransgaz EAD and Bulgargaz EAD under the terms of Article 262 (d) of the
Commercial Act. Bulgartransgaz EAD and Bulgargaz EAD are legal successors of the respective portion of the
property (rights and obligations) of Bulgargaz Holding EAD. By virtue of Decision No. 45 dated 15 January 2007 the
transformation was registered in the Sofia City Court.
By virtue of Protocol No RD-21- 305 dated 18.09.2008 of the Minister of Economy and Energy, the Company’s name
was changed from Bulgargaz Holding EAD to Bulgarian Energy Holding EAD, and the capital was increased through
an in-kind contribution at nominal value of all the shares in the capital of the Natsionalna Elektricheska Kompania
EAD, NPP Kozloduy EAD, TPP Maritsa East 2 EAD, and Mini Maritsa Iztok EAD.
The Company’s registered office and headquarters are loca ted in Sofia, 1000, Oborishte District, 16 Veslets Str.
Bulgarian Energy Holding EAD has a scope of activity: Acquisition, evaluation and sale of participations in trading
companies operating in the fields of production, extraction, transmission, transit, storage, management, distribution,
sale and/or purchase of natural gas, electricity, thermal power, coal, as well as any other types of energy and raw
materials for the production and participation in the management of such companies, their financing, acquisition,
evaluation, issuance and sale of bonds, acquisition, evaluation and sale of patents, concession of licenses for use of
the above companies as well as performance of own production or trade activity.
As of 31 December 2022, Bulgarian Energy Holding EAD is managed by a Board of Directors (BD), which consists
of the following members: Veselina Lachezarova Kanatova-Buchkova - chairman of the Board of Directors, Angel
Emilov Yankov - deputy chairman of the Board of Directors, Ivan Todorov Andreev – Executive member, Diyan
Stanimirov Dimitrov - member of the Board of Directors, Anton Georgiev Simeonov - member of the Board of
Directors, Zheko Mihaylov Zhekov - member of the Board of Directors, and Stelian Penchev Koev - member of the
Board of Directors.
The sole and ultimate owner of the Company is the Republic of Bulgaria through the Minister of Energy.
As of 31 December 2022, the total number of employees of the Company hired with an employment contract is 94
people (31 December 2021: 80 people)
2.Basis for the preparation of the separate financial statements
The separate financial statements were prepared on a historical cost basis, except for property, plant and equipment,
which are presented under revalued amount, as well as of the capital instruments, designated for a fair value
measurement through other comprehensive income.
The separate financial statements are presented in Bulgarian Lev (BGN), which is also the functional currency of the
Company. All amounts are presented in thousand Bulgarian leva (BGN‘000) (including comparative information for
2021) unless otherwise stated.
The Company maintains its current accounting and prepares its financial statements in accordance with the
requirements of all the International Financial Reporting Standards (IFRS) which consist of: Financial Reporting
Standards, and of interpretations by the International Financial Reporting Interpretations Committee (IFRIC),
approved by the International Accounting Standards Board (IASB) and the International Accounting Standards and
the interpretations thereto of the Standing Interpretations Committee (SIC), approved by the International Accounting
Standards Board (IASB), which have been effectively in force since 1 January 2022 and have been adopted by the
European Commission.
These financial statements are the separate financial statements of Bulgarian Energy Holding EAD, where investments
in subsidiaries and jointly controlled entities are presented at acquisition price. In compliance with the requirements
of IFRS 10 Consolidated Financial Statements and the Accountancy Act, the Company also prepares and presents
consolidated financial statements.
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
9
The separate financial statements were approved for issue by the Board of Directors of BEH EAD via Decision No 32-
2023 dated 4 May 2023.
The Russia-Ukraine war
The Company has no investments or outstanding balances with clients or suppliers from Russia or Ukraine and due
to the nature of its business, namely holding activities, related to investment management and rendering of services,
as well as due to the lack of dependence on raw materials and other supplies, the management ’s assessment is that
there are no circumstances and factors, which may question the validity of the going concern principle or which have
a direct and adverse effect on the activity of the Company as a result of the military conflict between Ukraine and
Russia in 2022.
Meanwhile, the increasing costs of raw materials and energy sources led to significant inflation in the Eurozone and
USA, as a result of which the Federal Reserve of USA, the European Central Bank and Bulgarian National Bank
raised their interest rates several times, trying to cope with the increasing consumer prices. The Company has no major
interest-bearing loans with floating interest rates, but it is possible for the interest expense on loans to rise in the future
as a result of the increasing interest rates.
In addition, some of the activities of the subsidiaries may be directly affected in the mid-term or long-term period in
relation to contracts for purchase of raw materials, supplies and equipment from Russian suppliers. Actions are
undertaken for negotiating and signing contacts with alternative suppliers as well as for obtaining a derogation from
the sanctions of the European Union in relation to imports of certain spare parts, materials, and receipt of services.
Climate-related matters
In 2022, the Company presents information on climate-related matters, and considers such reporting as a long-term
commitment, which will be further developed and broadened in the future. The legislation, the regulatory bodies, the
partners of the Company and the users of non-financial information draw great attention to the climate change. The
European Union adopted the European Green Deal as a transition to more sustainable economic and financial system
and in the following years the detailed requirements for reporting the climate change shall become applicable as a part
of the European standards for reporting sustainability. The Company is under a process of analysis of the business and
implemented activities and their extent of impact, the possible risks and ways for active participation in the adoption
of decisions, related to the climate changes. As of 31 December 2022 the Company has not identified any major risks
caused by the climate changes, which could affect directly and significantly its financial statements, but in a long-
term context they could affect its investments and their profitability.
Ecological, Social and Governance Rating (ESG Rating);
For a public company actively participating in raising funds through the capital markets, such as Bulgarian Energy
Holding EAD, attracting investors’ interest relates to a strict observance of the social, governance, and ecological
aspects of the activities within the frameworks of the holding. The ESG rating is awarded after thorough analysis of
the rules and policies of a particular company, related to the ecological, social, and governance aspects of its business
after assessing the overall impact and the footprint on the surrounding environment, which the company leaves upon
realization of its business activities, as well as following a thorough review of the available public information from
the corporate website, articles and news about the Company.
On 16 December 2021, BEH Group was assigned ESG rating of 34.2 points (“high risk”) . The rating was assigned by
Sustainalytics – a company, part of the Morningstar structure, which is a globally recognized supplier of ESG research,
ratings, and data. The corporate ESG assessment of Bulgarian Energy Holding EAD is a one-off assessment, valid at
the moment of its award and it is drawn based on the information provided by Bulgarian Energy Holding EAD. The
assessment report of the ESG risk includes a general ESG risk rating, exposition assessment of the Company, and
assessment of its governance. The exposition concerns the extent, to which the Company is exposed to different
material risks, related to the ecological, social, and governance aspects. The management assessment shows to what
extent the Company governs these aspects. The evaluation of the exposition of BEH is 54.3 points (“medium risk”)
and the evaluation of the management is 39.9 points (“average performance”). As of 31 December 2022, there is no
change in the assigned ESG rating.
Going concern principle
Т aking into consideration the above circumstances, the management has made assessment on the ability of the
Company to continue functioning as a going concern in the foreseeable future and it has found that the principle –
assumption of a going concern is applicable in the course of preparation of the separate financial statements. The
available information about the foreseeable future, the military conflict between the Russian Federation and the
Separate Financial Statements
31 December 2022
9
The separate financial statements were approved for issue by the Board of Directors of BEH EAD via Decision No 32-
2023 dated 4 May 2023.
The Russia-Ukraine war
The Company has no investments or outstanding balances with clients or suppliers from Russia or Ukraine and due
to the nature of its business, namely holding activities, related to investment management and rendering of services,
as well as due to the lack of dependence on raw materials and other supplies, the management ’s assessment is that
there are no circumstances and factors, which may question the validity of the going concern principle or which have
a direct and adverse effect on the activity of the Company as a result of the military conflict between Ukraine and
Russia in 2022.
Meanwhile, the increasing costs of raw materials and energy sources led to significant inflation in the Eurozone and
USA, as a result of which the Federal Reserve of USA, the European Central Bank and Bulgarian National Bank
raised their interest rates several times, trying to cope with the increasing consumer prices. The Company has no major
interest-bearing loans with floating interest rates, but it is possible for the interest expense on loans to rise in the future
as a result of the increasing interest rates.
In addition, some of the activities of the subsidiaries may be directly affected in the mid-term or long-term period in
relation to contracts for purchase of raw materials, supplies and equipment from Russian suppliers. Actions are
undertaken for negotiating and signing contacts with alternative suppliers as well as for obtaining a derogation from
the sanctions of the European Union in relation to imports of certain spare parts, materials, and receipt of services.
Climate-related matters
In 2022, the Company presents information on climate-related matters, and considers such reporting as a long-term
commitment, which will be further developed and broadened in the future. The legislation, the regulatory bodies, the
partners of the Company and the users of non-financial information draw great attention to the climate change. The
European Union adopted the European Green Deal as a transition to more sustainable economic and financial system
and in the following years the detailed requirements for reporting the climate change shall become applicable as a part
of the European standards for reporting sustainability. The Company is under a process of analysis of the business and
implemented activities and their extent of impact, the possible risks and ways for active participation in the adoption
of decisions, related to the climate changes. As of 31 December 2022 the Company has not identified any major risks
caused by the climate changes, which could affect directly and significantly its financial statements, but in a long-
term context they could affect its investments and their profitability.
Ecological, Social and Governance Rating (ESG Rating);
For a public company actively participating in raising funds through the capital markets, such as Bulgarian Energy
Holding EAD, attracting investors’ interest relates to a strict observance of the social, governance, and ecological
aspects of the activities within the frameworks of the holding. The ESG rating is awarded after thorough analysis of
the rules and policies of a particular company, related to the ecological, social, and governance aspects of its business
after assessing the overall impact and the footprint on the surrounding environment, which the company leaves upon
realization of its business activities, as well as following a thorough review of the available public information from
the corporate website, articles and news about the Company.
On 16 December 2021, BEH Group was assigned ESG rating of 34.2 points (“high risk”) . The rating was assigned by
Sustainalytics – a company, part of the Morningstar structure, which is a globally recognized supplier of ESG research,
ratings, and data. The corporate ESG assessment of Bulgarian Energy Holding EAD is a one-off assessment, valid at
the moment of its award and it is drawn based on the information provided by Bulgarian Energy Holding EAD. The
assessment report of the ESG risk includes a general ESG risk rating, exposition assessment of the Company, and
assessment of its governance. The exposition concerns the extent, to which the Company is exposed to different
material risks, related to the ecological, social, and governance aspects. The management assessment shows to what
extent the Company governs these aspects. The evaluation of the exposition of BEH is 54.3 points (“medium risk”)
and the evaluation of the management is 39.9 points (“average performance”). As of 31 December 2022, there is no
change in the assigned ESG rating.
Going concern principle
Т aking into consideration the above circumstances, the management has made assessment on the ability of the
Company to continue functioning as a going concern in the foreseeable future and it has found that the principle –
assumption of a going concern is applicable in the course of preparation of the separate financial statements. The
available information about the foreseeable future, the military conflict between the Russian Federation and the
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
10
Republic of Ukraine, the Bulgarian Recovery and Resilience Plan, approved by the EU, the unstable macro-economic
situation and the dynamics on the energy market worldwide and in Bulgaria are taken into account. Following the
review of the Company’s operations, the Board of Directors expects the Company to have sufficient financial
resources to continue its operations in the near future and shall continue applying the going concern principle upon
the preparation of the Separate Financial Statements.
3.Changes in the accounting policy
3.1 General provisions
For the current financial year the Company has adopted all new and/or revised standards and amendmends, issued by
the International Accounting Standards Committee (IASC) and adopted by the EU and respectively by the IFRS
Interpretations Committee, effective from 1 January 2022, but they do not have a significant effect on the separate
financial statements of the Company. The Company has not adopted standards, interpretations or amendments, which
are published, but still not effective.
3.2. New standards, amendments and interpretations to IFRS, effective from 1 January 2022.
The Company implements the following new standards, amendments and interpretations to IFRS, developed and
published by the International Accounting Standards Committee, which affect the financial statements of the Company
and are mandatory for implementation from the annual period, effective from 1 January 2022:
- Property, plant and equipment: Proceeds before intended use (Amendments to IAS 16) - effective date: 1 January
2022
- A reference to the Conceptual framework - Amendments to IFRS 3 - effective date: 1 January 2022
- Onerous Contracts — Cost of Fulfilling a Contract (Amendments to IAS 37) - effective date: 1 January 2022
- Annual improvements of the IFRSs 2018 – 2020 cycle - effective date: 1 January 2022
3.3. Standards, amendments and interpretations, that have not yet entered into force and are not applied from
an earlier date by the Company
The following standards and interpretations were issued, but were not mandatory for the annual reporting periods,
ending on 31 December 2022.
- IFRS 17 Insurance Contracts and its amendments, in effect since 1 January 2021, adopted by the EU
- Classification of the liabilities as current and non-current - Amendments to IAS 1 - effective date: 1 January
2023
- Disclosure of accounting polices (Amendments to IAS 1 and Statement for the practice 2 of IFRS) for annual
reporting periods, starting on or after 1 January 2023.
- Definition of the accounting estimates (Amendments to IAS 8) for annual reporting periods, starting on or after
1 January 2023.
- Deferred tax, related to assets and liabilities, resulting from a single transaction – Amendments to IAS 12, for
annual reporting periods, starting on or after 1 January 2023.
They are not expected to have a material effect on the Company's financial statements. The management expects all
standards and amendments to be adopted in the Company's accounting policy in the first period beginning after the
date of their entry into force.
4.Accounting policy
4.1 General provisions
The most significant accounting policies applied in the preparation of these separate financial statements, are presented
below.
The separate financial statements were prepared in accordance with the principles for evaluation of all types of assets,
liabilities, income and expenses under the IFRS. The evaluation bases are disclosed in detail further in the accounting
policies to the separate financial statements.
It should be noted that accounting estimates and assumptions were used to prepare the presented separate financial
statements. Although they are based on information provided to the management at the date of preparation of the
separate financial statements, the actual results may differ from the estimates and assumptions made.
Separate Financial Statements
31 December 2022
10
Republic of Ukraine, the Bulgarian Recovery and Resilience Plan, approved by the EU, the unstable macro-economic
situation and the dynamics on the energy market worldwide and in Bulgaria are taken into account. Following the
review of the Company’s operations, the Board of Directors expects the Company to have sufficient financial
resources to continue its operations in the near future and shall continue applying the going concern principle upon
the preparation of the Separate Financial Statements.
3.Changes in the accounting policy
3.1 General provisions
For the current financial year the Company has adopted all new and/or revised standards and amendmends, issued by
the International Accounting Standards Committee (IASC) and adopted by the EU and respectively by the IFRS
Interpretations Committee, effective from 1 January 2022, but they do not have a significant effect on the separate
financial statements of the Company. The Company has not adopted standards, interpretations or amendments, which
are published, but still not effective.
3.2. New standards, amendments and interpretations to IFRS, effective from 1 January 2022.
The Company implements the following new standards, amendments and interpretations to IFRS, developed and
published by the International Accounting Standards Committee, which affect the financial statements of the Company
and are mandatory for implementation from the annual period, effective from 1 January 2022:
- Property, plant and equipment: Proceeds before intended use (Amendments to IAS 16) - effective date: 1 January
2022
- A reference to the Conceptual framework - Amendments to IFRS 3 - effective date: 1 January 2022
- Onerous Contracts — Cost of Fulfilling a Contract (Amendments to IAS 37) - effective date: 1 January 2022
- Annual improvements of the IFRSs 2018 – 2020 cycle - effective date: 1 January 2022
3.3. Standards, amendments and interpretations, that have not yet entered into force and are not applied from
an earlier date by the Company
The following standards and interpretations were issued, but were not mandatory for the annual reporting periods,
ending on 31 December 2022.
- IFRS 17 Insurance Contracts and its amendments, in effect since 1 January 2021, adopted by the EU
- Classification of the liabilities as current and non-current - Amendments to IAS 1 - effective date: 1 January
2023
- Disclosure of accounting polices (Amendments to IAS 1 and Statement for the practice 2 of IFRS) for annual
reporting periods, starting on or after 1 January 2023.
- Definition of the accounting estimates (Amendments to IAS 8) for annual reporting periods, starting on or after
1 January 2023.
- Deferred tax, related to assets and liabilities, resulting from a single transaction – Amendments to IAS 12, for
annual reporting periods, starting on or after 1 January 2023.
They are not expected to have a material effect on the Company's financial statements. The management expects all
standards and amendments to be adopted in the Company's accounting policy in the first period beginning after the
date of their entry into force.
4.Accounting policy
4.1 General provisions
The most significant accounting policies applied in the preparation of these separate financial statements, are presented
below.
The separate financial statements were prepared in accordance with the principles for evaluation of all types of assets,
liabilities, income and expenses under the IFRS. The evaluation bases are disclosed in detail further in the accounting
policies to the separate financial statements.
It should be noted that accounting estimates and assumptions were used to prepare the presented separate financial
statements. Although they are based on information provided to the management at the date of preparation of the
separate financial statements, the actual results may differ from the estimates and assumptions made.
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
11
The presentation of the separate financial statements in accordance with International Financial Reporting Standards
requires management to make the best estimates, accruals and reasonable assumptions that affect the reported amounts
of assets and liabilities, income and expenses, and the disclosure of contingent assets and contingent liabilities at the
end of the reporting period. These estimates, accruals and assumptions are based on information available at the end
of the reporting period, so future actual results may differ. Items that involve a higher degree of subjective judgment
or complexity of calculations, or where assumptions and estimates are material to the financial statements are disclosed
in Note 4.22.
4.2 Presentation of the separate financial statement, comparative information
The separate financial statements are presented in accordance with IAS 1 Presentation of Financial Statements. The
Company agreed to present the profit or loss and the other comprehensive income in two separate statements: a profit
or loss statement and a statement of comprehensive income.
Two comparative periods are presented in the statement of financial position, when the Company applies accounting
policies retrospectively, restates retrospectively positions in the financial statements, or reclassifies positions in the
financial statements, and it has a significant effect on the information in the statement of financial position at the
beginning of the previous period.
4.3 Consolidated financial statement of the Company
The Company has begun the process of preparing its consolidated annual financial statements for 2022 in accordance
with IFRS, effective for 2022. According to the planned dates, the management expects the consolidated financial
statements to be approved for issuance not later than 30 June 2023 by the Board of Directors of the Company, after
which date the statement shall be publicly available to third parties.
4.4 Transactions in foreign currency
Transactions in foreign currency are reported in the functional currency of the Company at the official exchange rate
at the date of the transaction (the Bulgarian National Bank’s fixed exchange rate). The profits and losses from foreign
exchange rate variations, arising in the settlement of those transactions and the revaluation of foreign currency
monetary items at the end of the reporting period, are recognized in the profit or loss.
Non-monetary items valued at historical cost in foreign currency are reported at the exchange rate at the date of the
transaction (they are not revalued). Non-monetary items valued at fair value in foreign currency are reported at the
exchange rate at the date when the fair value is determined.
4.5 Revenue recognition
Recognizing and evaluating revenue from contracts with customers
Revenue from contracts with customers is recognized when the control of the goods and / or services promised in the
contract, is transferred to the customer in an amount that reflects the remuneration the Company expects to be entitled
to in exchange for those goods or services.
Control is transferred to the customer when (or as) the customer meets the obligation to perform, under the terms of
the contract, by transferring the promised product or service to the customer. An asset (product or service) is
transferred when (or as) a customer has control over such asset.
In the initial evaluation of its contracts with customers, the Company assesses whether two or more contracts must be
considered in their combination and accounted for as one, and whether the promised goods and / or services in each
separate and / or combined contract have to be accounted for as one and / or more performance obligations.
Any obligation to transfer goods and / or services that are identifiable (on their own and in the context of the contract)
is reported as a performance obligation.
The Company recognizes revenue for each separate performance obligation at the level of an individual contract with
a customer by analyzing the type, timing and terms of each particular contract. For contracts with similar
characteristics, revenues are recognized on a portfolio basis only if their grouping in a portfolio would not have a
materially different effect on the financial statements.
Contracts with customers typically include a single performance obligation.
Separate Financial Statements
31 December 2022
11
The presentation of the separate financial statements in accordance with International Financial Reporting Standards
requires management to make the best estimates, accruals and reasonable assumptions that affect the reported amounts
of assets and liabilities, income and expenses, and the disclosure of contingent assets and contingent liabilities at the
end of the reporting period. These estimates, accruals and assumptions are based on information available at the end
of the reporting period, so future actual results may differ. Items that involve a higher degree of subjective judgment
or complexity of calculations, or where assumptions and estimates are material to the financial statements are disclosed
in Note 4.22.
4.2 Presentation of the separate financial statement, comparative information
The separate financial statements are presented in accordance with IAS 1 Presentation of Financial Statements. The
Company agreed to present the profit or loss and the other comprehensive income in two separate statements: a profit
or loss statement and a statement of comprehensive income.
Two comparative periods are presented in the statement of financial position, when the Company applies accounting
policies retrospectively, restates retrospectively positions in the financial statements, or reclassifies positions in the
financial statements, and it has a significant effect on the information in the statement of financial position at the
beginning of the previous period.
4.3 Consolidated financial statement of the Company
The Company has begun the process of preparing its consolidated annual financial statements for 2022 in accordance
with IFRS, effective for 2022. According to the planned dates, the management expects the consolidated financial
statements to be approved for issuance not later than 30 June 2023 by the Board of Directors of the Company, after
which date the statement shall be publicly available to third parties.
4.4 Transactions in foreign currency
Transactions in foreign currency are reported in the functional currency of the Company at the official exchange rate
at the date of the transaction (the Bulgarian National Bank’s fixed exchange rate). The profits and losses from foreign
exchange rate variations, arising in the settlement of those transactions and the revaluation of foreign currency
monetary items at the end of the reporting period, are recognized in the profit or loss.
Non-monetary items valued at historical cost in foreign currency are reported at the exchange rate at the date of the
transaction (they are not revalued). Non-monetary items valued at fair value in foreign currency are reported at the
exchange rate at the date when the fair value is determined.
4.5 Revenue recognition
Recognizing and evaluating revenue from contracts with customers
Revenue from contracts with customers is recognized when the control of the goods and / or services promised in the
contract, is transferred to the customer in an amount that reflects the remuneration the Company expects to be entitled
to in exchange for those goods or services.
Control is transferred to the customer when (or as) the customer meets the obligation to perform, under the terms of
the contract, by transferring the promised product or service to the customer. An asset (product or service) is
transferred when (or as) a customer has control over such asset.
In the initial evaluation of its contracts with customers, the Company assesses whether two or more contracts must be
considered in their combination and accounted for as one, and whether the promised goods and / or services in each
separate and / or combined contract have to be accounted for as one and / or more performance obligations.
Any obligation to transfer goods and / or services that are identifiable (on their own and in the context of the contract)
is reported as a performance obligation.
The Company recognizes revenue for each separate performance obligation at the level of an individual contract with
a customer by analyzing the type, timing and terms of each particular contract. For contracts with similar
characteristics, revenues are recognized on a portfolio basis only if their grouping in a portfolio would not have a
materially different effect on the financial statements.
Contracts with customers typically include a single performance obligation.
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
12
Measurement
Revenue is measured on the basis of the transaction price specified for each contract.
In determining the transaction price, the Company takes into account the terms and conditions of the contract and its
usual business practices.
The transaction price is the amount of the remuneration the Company expects to be entitled to in exchange for the
transfer of the promised goods or services to the customer, except for amounts collected on behalf of third parties (e.g.
value added tax). The remuneration promised in the contract with the customer may include fixed amounts, variable
amounts, or both.
When (or as) a performance obligation is met, the Company recognizes as income the cost of the transaction (which
excludes estimates of variable remuneration containing limitations), that is attributable to that obligation to perform.
The Company examines whether there are other promises in the contract that are separate performance obligations,
for which part of the transaction price should be allocated.
When determining the transaction price, account is taken of the impact of variable remuneration, the existence of
significant components of funding, non-monetary remuneration, and remuneration owed to the customer (if any).
Performance obligations and recognition approach of main types of revenue under contracts with customers
Revenues from services
Revenue from provision of services is recognized in the accounting period in which the services are provided. The
Company transfers control of the services over time and therefore satisfies the obligation to perform and recognizes
revenue over time. If, as at the end of the reporting period, the service under the contract has not been fully performed,
revenue is recognized on the basis of the actual service provided until the end of the reporting period, as a proportion
of the total services to be provided, since the customer receives and consumes the benefits simultaneously. This is
determined on the basis of actual time spent on work, in relation to the total expected time of service performance.
The customer pays for the services provided on the basis of the clauses stipulated in the specific contract. The ordinary
credit period is from 10 to 30 days after the provision of the services. In cases where the services provided by the
Company exceed the payment, an asset under the contract is recognized. If payments exceed the services provided, a
liability under a contract is recognized.
Revenue from sales of short-term assets
Revenues from sales of short-term assets and materials are recognized when the control of the assets sold is transferred.
Delivery occurs when the assets have been shipped to the customer, the risks of potential losses are passed on to the
buyer, and/or they have accepted the assets in accordance with the sales contract. The usual payment term is within
30 days after delivery.
Principal or agent
When a third party participates in the provision of goods or services to a customer, the Company determines whether
the nature of their promise is an obligation to perform, related to the provision of the particular goods or services
(principal), or to arrange for the third party to provide those goods or services (agent).
The Company is the principal when it controls the promised commodity or service before transferring it to the
customer. Nevertheless, the Company does not necessarily act as the principal if it receives the ownership of an asset
only temporarily, before the ownership right is transferred to the customer.
The Company is an agent if the Company’s obligation to perform is to arrange the delivery of the goods or services
from a third party. When an agent company fulfils an obligation to perform, it recognizes revenue at the amount of a
fee or commission it expects to be entitled to in exchange for arranging for the goods and services to be provided by
another party. The fee or commission of the Company may be the net amount of remuneration the Company retains
after paying to the other party the consideration received in exchange for the goods or services to be provided by that
party.
The Company is an agent in its contracts for the sale of greenhouse gas emission allowances with the subsidiary TPP
Maritsa East 2 EAD.
Significant accounting assessments, estimates and assumptions relating to income from contracts with customers, are
presented in note 4.22.
Separate Financial Statements
31 December 2022
12
Measurement
Revenue is measured on the basis of the transaction price specified for each contract.
In determining the transaction price, the Company takes into account the terms and conditions of the contract and its
usual business practices.
The transaction price is the amount of the remuneration the Company expects to be entitled to in exchange for the
transfer of the promised goods or services to the customer, except for amounts collected on behalf of third parties (e.g.
value added tax). The remuneration promised in the contract with the customer may include fixed amounts, variable
amounts, or both.
When (or as) a performance obligation is met, the Company recognizes as income the cost of the transaction (which
excludes estimates of variable remuneration containing limitations), that is attributable to that obligation to perform.
The Company examines whether there are other promises in the contract that are separate performance obligations,
for which part of the transaction price should be allocated.
When determining the transaction price, account is taken of the impact of variable remuneration, the existence of
significant components of funding, non-monetary remuneration, and remuneration owed to the customer (if any).
Performance obligations and recognition approach of main types of revenue under contracts with customers
Revenues from services
Revenue from provision of services is recognized in the accounting period in which the services are provided. The
Company transfers control of the services over time and therefore satisfies the obligation to perform and recognizes
revenue over time. If, as at the end of the reporting period, the service under the contract has not been fully performed,
revenue is recognized on the basis of the actual service provided until the end of the reporting period, as a proportion
of the total services to be provided, since the customer receives and consumes the benefits simultaneously. This is
determined on the basis of actual time spent on work, in relation to the total expected time of service performance.
The customer pays for the services provided on the basis of the clauses stipulated in the specific contract. The ordinary
credit period is from 10 to 30 days after the provision of the services. In cases where the services provided by the
Company exceed the payment, an asset under the contract is recognized. If payments exceed the services provided, a
liability under a contract is recognized.
Revenue from sales of short-term assets
Revenues from sales of short-term assets and materials are recognized when the control of the assets sold is transferred.
Delivery occurs when the assets have been shipped to the customer, the risks of potential losses are passed on to the
buyer, and/or they have accepted the assets in accordance with the sales contract. The usual payment term is within
30 days after delivery.
Principal or agent
When a third party participates in the provision of goods or services to a customer, the Company determines whether
the nature of their promise is an obligation to perform, related to the provision of the particular goods or services
(principal), or to arrange for the third party to provide those goods or services (agent).
The Company is the principal when it controls the promised commodity or service before transferring it to the
customer. Nevertheless, the Company does not necessarily act as the principal if it receives the ownership of an asset
only temporarily, before the ownership right is transferred to the customer.
The Company is an agent if the Company’s obligation to perform is to arrange the delivery of the goods or services
from a third party. When an agent company fulfils an obligation to perform, it recognizes revenue at the amount of a
fee or commission it expects to be entitled to in exchange for arranging for the goods and services to be provided by
another party. The fee or commission of the Company may be the net amount of remuneration the Company retains
after paying to the other party the consideration received in exchange for the goods or services to be provided by that
party.
The Company is an agent in its contracts for the sale of greenhouse gas emission allowances with the subsidiary TPP
Maritsa East 2 EAD.
Significant accounting assessments, estimates and assumptions relating to income from contracts with customers, are
presented in note 4.22.
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
13
Contractual balances
Trade receivables and assets under contracts
The receivable is the right of the Company to receive remuneration of a certain amount, which is unconditional (i.e.
before the payment of the remuneration becomes due, it is only necessary that a certain period of time expires).
The asset under a contract is the right of the company to receive remuneration in return for the goods or services it
has transferred to the customer, but which is not unconditional (the accrual of the receivable). If, through the transfer
of the goods and / or the provision of the services, the Company fulfils its obligation before the customer pays the
relevant remuneration and / or before the payment becomes due, a contract asset is recognized for the earned
remuneration (which is conditional). Recognized contract assets are reclassified as a trade receivable when the right
to remuneration becomes unconditional.
Liabilities under contracts
As a liability under a contract, the Company presents the payments received from the customer and / or an
unconditional right to receive a payment before fulfilling its contractual obligations. Contract liabilities are recognized
as income when (or as) the obligations to perform have been met.
Assets and liabilities arising from a contract are presented net in the statement of financial position, even if they are
the result of different contractual obligations for performance of the contract.
After initial recognition, trade receivables and contract assets are subject to impairment testing in accordance with
IFRS 9 Financial Instruments.
Dividend income
The dividend income is recognized when the right for its receipt is established.
Interest income
Interest income is calculated by applying the effective interest rate on the gross carrying amount of financial assets
except for financial assets which are impaired (Phase 3) for which interest income is calculated by applying the
effective interest rate on their amortized value (i.e. the gross book value adjusted for the loss provision).
Net profit from the sale of property, plant and equipment
Profit or losses arising upon the disposal of a property, plant, equipment or intangible asset as a result of a sale, are
included in profit or loss when the asset is derecognized. The asset is derecognized at the time the control of the asset
that is being sold is transferred.
4.6 Expenses
Expenses are recognized as they are incurred and based on accrual and comparability principles and to the extent that
it would not result in the recognition of assets / liabilities that do not qualify under the IFRS.
Prepayments for future periods are deferred for recognition as current expense for the period to which they refer.
4.7 Taxes
Current income tax
Current taxes on Company profits are determined in accordance with the requirements of the Bulgarian tax legislation
– the Corporate Income Tax Act. The nominal tax rate in Bulgaria for 2022 is 10% (2021: 10%). Current tax assets
and liabilities for the current and prior periods are recognized as per the amount expected to be recovered from or paid
to the tax authorities.
Deferred tax
Deferred tax is recognized using the balance sheet method for all temporary differences as at the reporting date that
arise between the tax bases of assets and liabilities and their carrying amounts.
Deferred tax liabilities are recognized for all taxable temporary differences:
• except to the extent that a deferred tax liability arises from the initial recognition of an asset or liability in a
transaction that is not a business combination and does not affect either the accounting profit or tax profit or
loss at the time of the transaction; and
Separate Financial Statements
31 December 2022
13
Contractual balances
Trade receivables and assets under contracts
The receivable is the right of the Company to receive remuneration of a certain amount, which is unconditional (i.e.
before the payment of the remuneration becomes due, it is only necessary that a certain period of time expires).
The asset under a contract is the right of the company to receive remuneration in return for the goods or services it
has transferred to the customer, but which is not unconditional (the accrual of the receivable). If, through the transfer
of the goods and / or the provision of the services, the Company fulfils its obligation before the customer pays the
relevant remuneration and / or before the payment becomes due, a contract asset is recognized for the earned
remuneration (which is conditional). Recognized contract assets are reclassified as a trade receivable when the right
to remuneration becomes unconditional.
Liabilities under contracts
As a liability under a contract, the Company presents the payments received from the customer and / or an
unconditional right to receive a payment before fulfilling its contractual obligations. Contract liabilities are recognized
as income when (or as) the obligations to perform have been met.
Assets and liabilities arising from a contract are presented net in the statement of financial position, even if they are
the result of different contractual obligations for performance of the contract.
After initial recognition, trade receivables and contract assets are subject to impairment testing in accordance with
IFRS 9 Financial Instruments.
Dividend income
The dividend income is recognized when the right for its receipt is established.
Interest income
Interest income is calculated by applying the effective interest rate on the gross carrying amount of financial assets
except for financial assets which are impaired (Phase 3) for which interest income is calculated by applying the
effective interest rate on their amortized value (i.e. the gross book value adjusted for the loss provision).
Net profit from the sale of property, plant and equipment
Profit or losses arising upon the disposal of a property, plant, equipment or intangible asset as a result of a sale, are
included in profit or loss when the asset is derecognized. The asset is derecognized at the time the control of the asset
that is being sold is transferred.
4.6 Expenses
Expenses are recognized as they are incurred and based on accrual and comparability principles and to the extent that
it would not result in the recognition of assets / liabilities that do not qualify under the IFRS.
Prepayments for future periods are deferred for recognition as current expense for the period to which they refer.
4.7 Taxes
Current income tax
Current taxes on Company profits are determined in accordance with the requirements of the Bulgarian tax legislation
– the Corporate Income Tax Act. The nominal tax rate in Bulgaria for 2022 is 10% (2021: 10%). Current tax assets
and liabilities for the current and prior periods are recognized as per the amount expected to be recovered from or paid
to the tax authorities.
Deferred tax
Deferred tax is recognized using the balance sheet method for all temporary differences as at the reporting date that
arise between the tax bases of assets and liabilities and their carrying amounts.
Deferred tax liabilities are recognized for all taxable temporary differences:
• except to the extent that a deferred tax liability arises from the initial recognition of an asset or liability in a
transaction that is not a business combination and does not affect either the accounting profit or tax profit or
loss at the time of the transaction; and
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
14
• for taxable temporary differences related to investments in subsidiaries, associates and interests in joint
ventures, except to the extent that the Company is able to control the timing of the reversal of the temporary
difference and the temporary difference is unlikely to reverse in the foreseeable future.
Deferred tax assets are recognized for all deductible temporary differences, unused tax credits and unused tax losses
carried forward to the extent that it is probable that taxable profit will be available against which deductible temporary
differences, unused tax credits carried forward and unused tax losses will be used:
• unless the deferred tax asset arises from the initial recognition of an asset or liability in a transaction that is
not a business combination and does not affect either the accounting profit or the tax profit or loss at the
time of the transaction; and
• for deductible temporary differences related to investments in subsidiaries, associates and interests in joint
ventures, a deferred tax asset is recognized only to the extent that it is probable that the temporary difference
will reverse for the foreseeable future, and the taxable profit will be realized against which the temporary
difference can be utilized.
The Company reviews the carrying amount of deferred tax assets at each reporting date and reduces it to the extent
that it is no longer probable that sufficient taxable profit will be available allowing for all or part of the deferred tax
asset to be recovered. Unrecognized deferred tax assets are reviewed at each reporting date and recognized to the
extent that future taxable profit is likely to be realized to allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to be in force for the period in which
the asset is realized or the liability is settled, based on the tax rates (and tax laws) that are in force or enacted, to a
significant extent, at the date of the statement of financial position. As at 31 December 2022, the deferred taxes on the
Company’s profit are measured at a rate valid for 2022, which amounts to 10% (2021 : 10%)
Deferred tax relating to items that are accounted for as other components of the comprehensive income or equity
position in the statement of financial position, is also reported directly to the relevant component of the comprehensive
income or the balance sheet equity position.
The Company offsets deferred tax assets and liabilities only when it has the legal right to deduct current tax assets
from current tax liabilities and the deferred tax assets and liabilities relate to income taxes levied by the same tax
authority on the same taxable entity.
Value added tax (VAT)
Revenue, expenses and assets are recognized net of VAT, except when:
• VAT arising from the purchase of assets or services is not refundable by the tax authorities, in which case
VAT is recognized as part of the cost of acquisition of the asset or as part of the relevant item of expenditure,
as appropriate; and
• receivables and payables are reported with VAT included.
The net amount of VAT recoverable from or payable to the taxation authority, is included as part of receivables or
payables in the statement of financial position.
4.8 Pension and other liabilities to employees
Short-term compensation
The short-term compensation for employees the form of remunerations, bonuses and social complements and benefits
(due for settlement within 12 months after the end of the period, in which the personnel has rendered work for them
or has met the required conditions) are recognized as a cost in the separate profit or loss statement, except if a particular
IFRS requires this amount to be capitalized in the cost of a particular asset, for the period, in which was rendered the
work for them and/or have been met the requirements for their obtaining as a current obligation (after deducting all
amounts already paid and deductions due).The Company recognizes short-term liabilities on paid leaves based on
unused paid annual leave in the cases, in which is expected the leaves to arise within 12 months following the date of
the reporting period, during which the hired individuals have rendered the labor, related to these leaves. At the date
of each financial statement, the Company makes assessment of the amount of the expected costs under the accruing
compensable leaves, which is expected to be paid as a result of unused right of accrued leave. The assessment
comprises the estimate for the amount for the remunerations themselves and of the contributions under the mandatory
public and health insurance, which the employer owes on these amount.
Separate Financial Statements
31 December 2022
14
• for taxable temporary differences related to investments in subsidiaries, associates and interests in joint
ventures, except to the extent that the Company is able to control the timing of the reversal of the temporary
difference and the temporary difference is unlikely to reverse in the foreseeable future.
Deferred tax assets are recognized for all deductible temporary differences, unused tax credits and unused tax losses
carried forward to the extent that it is probable that taxable profit will be available against which deductible temporary
differences, unused tax credits carried forward and unused tax losses will be used:
• unless the deferred tax asset arises from the initial recognition of an asset or liability in a transaction that is
not a business combination and does not affect either the accounting profit or the tax profit or loss at the
time of the transaction; and
• for deductible temporary differences related to investments in subsidiaries, associates and interests in joint
ventures, a deferred tax asset is recognized only to the extent that it is probable that the temporary difference
will reverse for the foreseeable future, and the taxable profit will be realized against which the temporary
difference can be utilized.
The Company reviews the carrying amount of deferred tax assets at each reporting date and reduces it to the extent
that it is no longer probable that sufficient taxable profit will be available allowing for all or part of the deferred tax
asset to be recovered. Unrecognized deferred tax assets are reviewed at each reporting date and recognized to the
extent that future taxable profit is likely to be realized to allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to be in force for the period in which
the asset is realized or the liability is settled, based on the tax rates (and tax laws) that are in force or enacted, to a
significant extent, at the date of the statement of financial position. As at 31 December 2022, the deferred taxes on the
Company’s profit are measured at a rate valid for 2022, which amounts to 10% (2021 : 10%)
Deferred tax relating to items that are accounted for as other components of the comprehensive income or equity
position in the statement of financial position, is also reported directly to the relevant component of the comprehensive
income or the balance sheet equity position.
The Company offsets deferred tax assets and liabilities only when it has the legal right to deduct current tax assets
from current tax liabilities and the deferred tax assets and liabilities relate to income taxes levied by the same tax
authority on the same taxable entity.
Value added tax (VAT)
Revenue, expenses and assets are recognized net of VAT, except when:
• VAT arising from the purchase of assets or services is not refundable by the tax authorities, in which case
VAT is recognized as part of the cost of acquisition of the asset or as part of the relevant item of expenditure,
as appropriate; and
• receivables and payables are reported with VAT included.
The net amount of VAT recoverable from or payable to the taxation authority, is included as part of receivables or
payables in the statement of financial position.
4.8 Pension and other liabilities to employees
Short-term compensation
The short-term compensation for employees the form of remunerations, bonuses and social complements and benefits
(due for settlement within 12 months after the end of the period, in which the personnel has rendered work for them
or has met the required conditions) are recognized as a cost in the separate profit or loss statement, except if a particular
IFRS requires this amount to be capitalized in the cost of a particular asset, for the period, in which was rendered the
work for them and/or have been met the requirements for their obtaining as a current obligation (after deducting all
amounts already paid and deductions due).The Company recognizes short-term liabilities on paid leaves based on
unused paid annual leave in the cases, in which is expected the leaves to arise within 12 months following the date of
the reporting period, during which the hired individuals have rendered the labor, related to these leaves. At the date
of each financial statement, the Company makes assessment of the amount of the expected costs under the accruing
compensable leaves, which is expected to be paid as a result of unused right of accrued leave. The assessment
comprises the estimate for the amount for the remunerations themselves and of the contributions under the mandatory
public and health insurance, which the employer owes on these amount.
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
15
Long-term retirement benefits
The Company owes retirement benefits to its employees under defined benefit plans and defined contribution plans.
Defined contribution plans
Defined contribution plans are retirement plans under which the Company pays fixed contributions into state funds.
The main obligation of the employer is to provide mandatory insurance to the employees for the Pensions Fund,
Supplementary Mandatory Pension Insurance (SMPI), General Sickness and Maternity (GSM) Fund, Unemployment
Fund, Labour Accident and Occupational Disease (LAOD) Fund and Health Insurance (HI).
The amounts of the social security contributions are approved in particular by the Budget of State Social Security Act
and the Budget of the National Health Insurance Fund Act for the respective year. Contributions are distributed
between the employer and the insured person in accordance with the rules of the Social Security Code (SSC).
These retirement benefit plans applied by the Company as an employer are defined contribution plans. Employers pay
monthly contributions to state funds as well as to universal and professional pension funds – based on statutory rates
– and there is no legal or constructive obligation to make additional contributions to the funds in cases where they
have insufficient funds to pay to the persons who have earned them during the period of their service. The obligations
in relation to health insurance are similar.
The Company’s obligations under defined contribution plans for social and health insurance are recognized as a
current expense in the statement of profit or loss unless certain IFRS require that amount to be capitalized in the cost
of an asset also as a current liability.
Defined benefit plans
Under the Bulgarian labour legislation and the Internal Rules for the determination of the salary, the Company as an
employer is obliged to pay from five to ten gross monthly salaries to its employees upon retirement, depending on the
length of service. If the employee has worked with the same employer for the past 10 years of their service, they are
to receive ten gross monthly salaries on retirement, and if they have worked for less than 10 years with the same
employer, five gross monthly salaries. The retirement benefit plan is not funded.
The Company determines its retirement benefit obligations by using an actuarial valuation method. The management
of the Company assesses the defined benefit obligation once a year with the assistance of an independent actuary. The
assessment of liabilities is based on standard rates of inflation, expected changes in medical service costs and
mortality. Future salary increases are also taken into account. Discount factors are determined at the end of each year,
taking into account the yield of high-quality corporate bonds denominated in the currency in which the earnings will
be paid and maturing close to that of the respective pension liabilities.
The cost of retirement benefits to employees associated with the current service, are included in “Employee expenses”
and the amount of discounting the liabilities is included as interest expense in the “Financial expenses”. The effects
of subsequent estimates of liabilities that are, in essence, actuarial gains and losses, are recognized immediately in the
period in which they arise and are presented under other components of comprehensive income in the item
“Revaluation of liabilities under defined benefit plans”.
The retirement benefit obligation presented in the statement of financial position consists of the present value of the
obligation to pay that benefit.
4.9 Financial instruments
A financial instrument is any contract that generates a financial asset of an entity and a financial liability or an equity
instrument of another entity.
A financial asset is any asset that is: cash, an equity instrument of another entity, a contractual right to acquire or
exchange cash or financial instruments with another entity under potentially favourable terms, and a contract that will
be settled by the equity of the Company and is a non-derivative in which it may or will receive a variable number of
its equity instruments, or a derivative that can or will be settled by exchanging a fixed amount of cash or another
financial asset, for a fixed number of equity instruments.
A financial liability is any liability that is: a contractual right to provide or exchange cash or financial instruments
with another entity under potentially unfavourable terms, as well as a contract that will be settled by equity instruments
of the issuer and is a non- derivative one in which the Company may or will obtain a variable number of an entity’s
equity instruments, or a derivative that may or will be settled in a manner different from the exchange of a fixed
amount of cash or other financial assets, against a fixed number of equity instruments of the entity.
Separate Financial Statements
31 December 2022
15
Long-term retirement benefits
The Company owes retirement benefits to its employees under defined benefit plans and defined contribution plans.
Defined contribution plans
Defined contribution plans are retirement plans under which the Company pays fixed contributions into state funds.
The main obligation of the employer is to provide mandatory insurance to the employees for the Pensions Fund,
Supplementary Mandatory Pension Insurance (SMPI), General Sickness and Maternity (GSM) Fund, Unemployment
Fund, Labour Accident and Occupational Disease (LAOD) Fund and Health Insurance (HI).
The amounts of the social security contributions are approved in particular by the Budget of State Social Security Act
and the Budget of the National Health Insurance Fund Act for the respective year. Contributions are distributed
between the employer and the insured person in accordance with the rules of the Social Security Code (SSC).
These retirement benefit plans applied by the Company as an employer are defined contribution plans. Employers pay
monthly contributions to state funds as well as to universal and professional pension funds – based on statutory rates
– and there is no legal or constructive obligation to make additional contributions to the funds in cases where they
have insufficient funds to pay to the persons who have earned them during the period of their service. The obligations
in relation to health insurance are similar.
The Company’s obligations under defined contribution plans for social and health insurance are recognized as a
current expense in the statement of profit or loss unless certain IFRS require that amount to be capitalized in the cost
of an asset also as a current liability.
Defined benefit plans
Under the Bulgarian labour legislation and the Internal Rules for the determination of the salary, the Company as an
employer is obliged to pay from five to ten gross monthly salaries to its employees upon retirement, depending on the
length of service. If the employee has worked with the same employer for the past 10 years of their service, they are
to receive ten gross monthly salaries on retirement, and if they have worked for less than 10 years with the same
employer, five gross monthly salaries. The retirement benefit plan is not funded.
The Company determines its retirement benefit obligations by using an actuarial valuation method. The management
of the Company assesses the defined benefit obligation once a year with the assistance of an independent actuary. The
assessment of liabilities is based on standard rates of inflation, expected changes in medical service costs and
mortality. Future salary increases are also taken into account. Discount factors are determined at the end of each year,
taking into account the yield of high-quality corporate bonds denominated in the currency in which the earnings will
be paid and maturing close to that of the respective pension liabilities.
The cost of retirement benefits to employees associated with the current service, are included in “Employee expenses”
and the amount of discounting the liabilities is included as interest expense in the “Financial expenses”. The effects
of subsequent estimates of liabilities that are, in essence, actuarial gains and losses, are recognized immediately in the
period in which they arise and are presented under other components of comprehensive income in the item
“Revaluation of liabilities under defined benefit plans”.
The retirement benefit obligation presented in the statement of financial position consists of the present value of the
obligation to pay that benefit.
4.9 Financial instruments
A financial instrument is any contract that generates a financial asset of an entity and a financial liability or an equity
instrument of another entity.
A financial asset is any asset that is: cash, an equity instrument of another entity, a contractual right to acquire or
exchange cash or financial instruments with another entity under potentially favourable terms, and a contract that will
be settled by the equity of the Company and is a non-derivative in which it may or will receive a variable number of
its equity instruments, or a derivative that can or will be settled by exchanging a fixed amount of cash or another
financial asset, for a fixed number of equity instruments.
A financial liability is any liability that is: a contractual right to provide or exchange cash or financial instruments
with another entity under potentially unfavourable terms, as well as a contract that will be settled by equity instruments
of the issuer and is a non- derivative one in which the Company may or will obtain a variable number of an entity’s
equity instruments, or a derivative that may or will be settled in a manner different from the exchange of a fixed
amount of cash or other financial assets, against a fixed number of equity instruments of the entity.
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
16
4.9.1. Financial assets
Initial recognition and classification
The Company initially recognizes a financial asset at the time it becomes a party to a contractual agreement, and
classifies it according to the business model for managing financial assets and the characteristics of the contracted
cash flows.
The Company classifies its financial assets according to their subsequent measurement in three categories: “financial
assets measured at amortized cost”, “financial assets measured at fair value through other comprehensive income”, or
“financial assets at fair value through profit or loss”, as appropriate, under the contractual terms of the instruments
and established business models in the Company in accordance with IFRS 9.
The business model of the Company for management of financial assets refers to the way in which it manages its
financial assets to generate cash flows. The business model determines whether cash flows will result from the
collection of contractual cash flows, the sale of financial assets, or both.
The management of the Company has determined that the financial assets which are cash in banks, trade receivables,
other receivables, judicial and adjudicated receivables and receivables from related parties, are held by the Company
in order to obtain the agreed cash flows and are expected to generate cash flows, which are only payments of principal
and interest (applied business model). These financial assets are classified and subsequently measured at amortized
cost.
Initial evaluation
Initially, all financial assets, with the exception of trade receivables, are measured at their fair value plus direct
transaction costs if they are not carried at fair value through profit or loss when initially recognized as net of transaction
costs. Trade receivables that do not have a significant component of financing, and for which the Company applies
the practically feasible measure under IFRS 15 in this respect, are initially measured at the transaction price in
accordance with IFRS 15 (note 0).
Subsequent evaluation and presentation
For the purposes of subsequent measurement and presentation, financial assets are classified in one of the following
categories: “financial assets measured at amortized cost” (debt instruments), “financial assets measured a t fair value
through other comprehensive income with reclassification of accrued profit and losses” (debt instruments), “financial
assets assessed at fair value through other comprehensive income, without reclassifying accumulated profit and loss
upon derecognition” (equity instruments) or “financial assets measured at fair value through profit or loss” (debt and
equity instruments).
Financial assets at amortized cost (debt instruments)
This category includes cash in banks, trade receivables, other receivables, judicial and adjudicated receivables and
related party receivables and loans granted. This category of financial assets is the most significant for the Company.
The Company evaluates and measures financial assets at amortized cost if both of the following conditions are met:
• The financial asset is held within a business model in order to hold financial assets for the purpose of
collecting contractual cash flows;
• The agreed terms of the financial asset result in certain dates of cash flows, which are only principal payments
and interest on the outstanding principal.
Subsequent measurement is carried out using the “effective interest” method, through which interest income is
calculated using the effective interest rate applied to the gross carrying amount of the instruments. For purchased or
created assets with initial credit impairment and those with a subsequently recognized credit impairment, the effective
interest rate adjusted for credit losses is respectively applied and the effective interest rate but as per the amortized
cost of the asset.
Financial assets in this category are subject to impairment testing at the date of each financial statement of the
Company, the changes being reflected in profit or loss.
Profit and losses are recognized in profit or loss when the asset is derecognized, changed or impaired.
Financial assets measured at fair value through other comprehensive income (equity instruments)
Upon initial recognition, the Company classifies the investments in equity instruments in this category when they
meet the definition of equity under IAS 32 Financial Instruments: Presentation and are not held for trading.
Separate Financial Statements
31 December 2022
16
4.9.1. Financial assets
Initial recognition and classification
The Company initially recognizes a financial asset at the time it becomes a party to a contractual agreement, and
classifies it according to the business model for managing financial assets and the characteristics of the contracted
cash flows.
The Company classifies its financial assets according to their subsequent measurement in three categories: “financial
assets measured at amortized cost”, “financial assets measured at fair value through other comprehensive income”, or
“financial assets at fair value through profit or loss”, as appropriate, under the contractual terms of the instruments
and established business models in the Company in accordance with IFRS 9.
The business model of the Company for management of financial assets refers to the way in which it manages its
financial assets to generate cash flows. The business model determines whether cash flows will result from the
collection of contractual cash flows, the sale of financial assets, or both.
The management of the Company has determined that the financial assets which are cash in banks, trade receivables,
other receivables, judicial and adjudicated receivables and receivables from related parties, are held by the Company
in order to obtain the agreed cash flows and are expected to generate cash flows, which are only payments of principal
and interest (applied business model). These financial assets are classified and subsequently measured at amortized
cost.
Initial evaluation
Initially, all financial assets, with the exception of trade receivables, are measured at their fair value plus direct
transaction costs if they are not carried at fair value through profit or loss when initially recognized as net of transaction
costs. Trade receivables that do not have a significant component of financing, and for which the Company applies
the practically feasible measure under IFRS 15 in this respect, are initially measured at the transaction price in
accordance with IFRS 15 (note 0).
Subsequent evaluation and presentation
For the purposes of subsequent measurement and presentation, financial assets are classified in one of the following
categories: “financial assets measured at amortized cost” (debt instruments), “financial assets measured a t fair value
through other comprehensive income with reclassification of accrued profit and losses” (debt instruments), “financial
assets assessed at fair value through other comprehensive income, without reclassifying accumulated profit and loss
upon derecognition” (equity instruments) or “financial assets measured at fair value through profit or loss” (debt and
equity instruments).
Financial assets at amortized cost (debt instruments)
This category includes cash in banks, trade receivables, other receivables, judicial and adjudicated receivables and
related party receivables and loans granted. This category of financial assets is the most significant for the Company.
The Company evaluates and measures financial assets at amortized cost if both of the following conditions are met:
• The financial asset is held within a business model in order to hold financial assets for the purpose of
collecting contractual cash flows;
• The agreed terms of the financial asset result in certain dates of cash flows, which are only principal payments
and interest on the outstanding principal.
Subsequent measurement is carried out using the “effective interest” method, through which interest income is
calculated using the effective interest rate applied to the gross carrying amount of the instruments. For purchased or
created assets with initial credit impairment and those with a subsequently recognized credit impairment, the effective
interest rate adjusted for credit losses is respectively applied and the effective interest rate but as per the amortized
cost of the asset.
Financial assets in this category are subject to impairment testing at the date of each financial statement of the
Company, the changes being reflected in profit or loss.
Profit and losses are recognized in profit or loss when the asset is derecognized, changed or impaired.
Financial assets measured at fair value through other comprehensive income (equity instruments)
Upon initial recognition, the Company classifies the investments in equity instruments in this category when they
meet the definition of equity under IAS 32 Financial Instruments: Presentation and are not held for trading.
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
17
Subsequent valuation of this instrument category is carried out at fair value and changes are recognized in another
comprehensive income. Fair values are determined on the basis of quoted prices in an active market, and when there
is no such market, based on valuation techniques, usually a discounted cash flow analysis.
Profit and losses on these financial assets are never reclassified to profit or loss. Dividends are recognized in the item
“financial income” in the statement of profit or loss and the other comprehensive income when the payment
entitlement is established.
The Company has made an irrevocable choice to classify in this category its minority equity investments that it holds
in the long term and in relation to its business interests in these companies. They are traded on capital markets.
Financial assets at fair value through the profit or loss
The Company estimates all other financial assets other than those that are measured at amortized cost or at fair value
through other comprehensive income at fair value through profit or loss.
If this eliminates or reduces significantly the inconsistency in the measurement or recognition of a financial asset, that
would result from recognition of results and changes by virtue of different bases, the Company may apply the
exceptions, in accordance with IFRS 9 and, upon initial recognition, irrevocably designate a financial asset as
measured at fair value through profit or loss, including contracts for delivery of a non-financial item. Such financial
assets are presented in the explanatory notes to the financial statements separately from the other instruments for
which this valuation approach is mandatory.
Derecognition
A financial asset (or, where applicable, part of a financial asset or part of a group of similar financial assets) is
derecognized when the contractual rights to the cash flows of the asset have expired, or the Company has transferred
its rights to receive cash flows from the asset or it has undertaken to pay all the cash flows received without significant
delay to a third party under a “transfer” arrangement.
When a financial asset is derecognized in its entirety, the difference between (1) the carrying amount (measured at the
date of derecognition) and (2) the consideration received (including any new asset received without the new
assumption of a new liability) is recognized in profit or loss.
When the Company has transferred its rights to receive cash flows from an asset, or has entered into a transfer
agreement, it assesses whether and to what extent the risks and rewards of ownership are preserved. When the
Company neither transfers nor substantially retains all the risks and rewards of the asset, nor transfers control over the
asset, it continues to recognize the transferred asset to the extent of its continuing involvement. In this case the
Company recognizes a related liability. The transferred asset and the related liability are measured on a basis that
reflects the rights and obligations that the Company has retained.
Impairment of financial assets
The Company recognizes provisions for expected credit losses for all debt instruments that are not carried at fair value
through profit or loss, using the approach presented in the table below:
Type of financial asset Category under IFRS 9 Impairment approach
1 Short-term trade receivables Debt instruments measured at
amortized cost
Simplified approach
2 Trade receivables with a financing
component
Debt instruments measured at
amortized cost
Standardized approach
3 Short-term receivables from related
parties
Debt instruments measured at
amortized cost
Simplified approach
4 Receivables from related parties
with a financing component
Debt instruments measured at
amortized cost
Standardized approach
5 Loans receivable Debt instruments measured at
amortized cost
Standardized approach
6 Cash and cash equivalents Debt instruments measured at
amortized cost
Standardized approach
7 Other financial, judicial and
adjudicated claims
Debt instruments measured at
amortized cost
Simplified approach
Expected credit losses are a probability-weighted estimate of credit losses (i.e. the present value of each shortage of
money) over the expected term of the financial instrument. Cash deficit is the difference between the cash flows
payable to the Company in accordance with the contract, and the cash flows that the Company expects to receive.
Because the expected credit losses account for the amount and timing of payments, an expected credit loss is
recognized even if the Company expects the asset to be fully paid, but later than the due date.
Separate Financial Statements
31 December 2022
17
Subsequent valuation of this instrument category is carried out at fair value and changes are recognized in another
comprehensive income. Fair values are determined on the basis of quoted prices in an active market, and when there
is no such market, based on valuation techniques, usually a discounted cash flow analysis.
Profit and losses on these financial assets are never reclassified to profit or loss. Dividends are recognized in the item
“financial income” in the statement of profit or loss and the other comprehensive income when the payment
entitlement is established.
The Company has made an irrevocable choice to classify in this category its minority equity investments that it holds
in the long term and in relation to its business interests in these companies. They are traded on capital markets.
Financial assets at fair value through the profit or loss
The Company estimates all other financial assets other than those that are measured at amortized cost or at fair value
through other comprehensive income at fair value through profit or loss.
If this eliminates or reduces significantly the inconsistency in the measurement or recognition of a financial asset, that
would result from recognition of results and changes by virtue of different bases, the Company may apply the
exceptions, in accordance with IFRS 9 and, upon initial recognition, irrevocably designate a financial asset as
measured at fair value through profit or loss, including contracts for delivery of a non-financial item. Such financial
assets are presented in the explanatory notes to the financial statements separately from the other instruments for
which this valuation approach is mandatory.
Derecognition
A financial asset (or, where applicable, part of a financial asset or part of a group of similar financial assets) is
derecognized when the contractual rights to the cash flows of the asset have expired, or the Company has transferred
its rights to receive cash flows from the asset or it has undertaken to pay all the cash flows received without significant
delay to a third party under a “transfer” arrangement.
When a financial asset is derecognized in its entirety, the difference between (1) the carrying amount (measured at the
date of derecognition) and (2) the consideration received (including any new asset received without the new
assumption of a new liability) is recognized in profit or loss.
When the Company has transferred its rights to receive cash flows from an asset, or has entered into a transfer
agreement, it assesses whether and to what extent the risks and rewards of ownership are preserved. When the
Company neither transfers nor substantially retains all the risks and rewards of the asset, nor transfers control over the
asset, it continues to recognize the transferred asset to the extent of its continuing involvement. In this case the
Company recognizes a related liability. The transferred asset and the related liability are measured on a basis that
reflects the rights and obligations that the Company has retained.
Impairment of financial assets
The Company recognizes provisions for expected credit losses for all debt instruments that are not carried at fair value
through profit or loss, using the approach presented in the table below:
Type of financial asset Category under IFRS 9 Impairment approach
1 Short-term trade receivables Debt instruments measured at
amortized cost
Simplified approach
2 Trade receivables with a financing
component
Debt instruments measured at
amortized cost
Standardized approach
3 Short-term receivables from related
parties
Debt instruments measured at
amortized cost
Simplified approach
4 Receivables from related parties
with a financing component
Debt instruments measured at
amortized cost
Standardized approach
5 Loans receivable Debt instruments measured at
amortized cost
Standardized approach
6 Cash and cash equivalents Debt instruments measured at
amortized cost
Standardized approach
7 Other financial, judicial and
adjudicated claims
Debt instruments measured at
amortized cost
Simplified approach
Expected credit losses are a probability-weighted estimate of credit losses (i.e. the present value of each shortage of
money) over the expected term of the financial instrument. Cash deficit is the difference between the cash flows
payable to the Company in accordance with the contract, and the cash flows that the Company expects to receive.
Because the expected credit losses account for the amount and timing of payments, an expected credit loss is
recognized even if the Company expects the asset to be fully paid, but later than the due date.
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
18
Impairment and losses on financial instruments are dealt with in three stages, the first two being the expected credit
losses for losses that may arise as a result of a default, and the third – as credit impairment (loss), based on evidence
of potential or actual default under the instruments.
Estimated credit losses for exposures for which there is no significant increase in credit risk relative to initial
recognition, are recognized as credit losses that may arise as a result of events of default over the next 12 months. For
credit exposures for which there is a significant increase in credit risk after initial recognition, a loss adjustment for
the expected credit losses over the remaining life of the exposure is required, regardless of the time of default
(estimated credit losses over the lifetime of the instrument).
Receivables from loans to related parties and receivables with a financing element – For the calculation of the
expected credit losses on loans granted to related parties and long-term receivables with a financing element, the
Company applies a standardized approach for impairment. Under this approach, the Company applies a “three - tier”
impairment model based on changes from the initial recognition of the credit quality of the financial instrument (asset).
Expected credit losses are recognized in three stages:
а. A financial asset that is not impaired at its initial origination / acquisition is classified in Phase 1. Since its initia l
recognition, its credit risk and qualities have been subject to continuous monitoring and analyses. Expected credit
losses on financial assets classified in Phase 1, are determined on the basis of credit losses that are the result of possible
events of default, which could occur within the next 12 months of the life of the asset (12-month expected credit loss
for the instrument).
b. In case where after the initial recognition of a financial asset its credit risk increases significantly and, as a result,
its performance deteriorates, it is classified in Phase 2. The expected credit losses of the financial assets classified in
Phase 2 are determined over the remaining life (term) of the asset, regardless of the time of the default (expected credit
losses over the lifetime (term) of the instrument).
c. In cases where the credit risk of a financial asset increases to a level that indicates that an event of default has
occurred, the financial asset is considered impaired and is classified in Phase 3. At this stage the losses incurred under
the relevant asset for all of its remaining life (term) are established and calculated.
The management of the Company has developed a policy and a set of criteria for analysing, identifying and assessing
the occurrence of a “significant increase in credit risk”.
For trade receivables and contract assets arising from transactions in the scope of IFRS 15 that do not contain a
significant financing component, the Company applies a simplified approach in accordance with IFRS 9, by
recognizing an impairment loss for expected credit losses based on the expected credit loss for the entire term of the
receivables at each reporting date. The Company applies a matrix that calculates the expected credit losses on trade
receivables. Receivables are classified as per the time they are overdue and are grouped by type and client segments
with different credit loss models.
For baseline data on trade receivables, the Company uses its accumulated experience of credit losses on such
instruments to measure expected credit losses. The historical data used is for periods of 3 to 5 years back, grouped by
type and corresponding client segment models, and adjusted by estimated factors specific to debtors and the industry
concerned.
For cash at banks, the Company recognizes impairment for expected credit losses by applying the standardized
approach, and the credit rating of the financial institutions in which the Company has deposited its cash is used to
determine the loss from default in the model parameters.
At each reporting date, the Company evaluates the impairment for each instrument at an amount equal to the expected
lifetime losses, if the credit risk for that instrument has increased significantly since the initial recognition.
In the event that, at the reporting date, the credit risk on a financial instrument has not increased significantly from the
time of initial recognition, the impairment for that financial instrument is equal to the expected 12-month credit losses.
Additional disclosures relating to the impairment of financial assets are also disclosed in the following notes:
➢ Disclosures of significant assessments and assumptions, note 4.22
➢ Trade and other receivables, note 22
➢ Receivables from related parties, note 32.3
➢ Cash, note 25
➢ Credit risk, note 35.5
Separate Financial Statements
31 December 2022
18
Impairment and losses on financial instruments are dealt with in three stages, the first two being the expected credit
losses for losses that may arise as a result of a default, and the third – as credit impairment (loss), based on evidence
of potential or actual default under the instruments.
Estimated credit losses for exposures for which there is no significant increase in credit risk relative to initial
recognition, are recognized as credit losses that may arise as a result of events of default over the next 12 months. For
credit exposures for which there is a significant increase in credit risk after initial recognition, a loss adjustment for
the expected credit losses over the remaining life of the exposure is required, regardless of the time of default
(estimated credit losses over the lifetime of the instrument).
Receivables from loans to related parties and receivables with a financing element – For the calculation of the
expected credit losses on loans granted to related parties and long-term receivables with a financing element, the
Company applies a standardized approach for impairment. Under this approach, the Company applies a “three - tier”
impairment model based on changes from the initial recognition of the credit quality of the financial instrument (asset).
Expected credit losses are recognized in three stages:
а. A financial asset that is not impaired at its initial origination / acquisition is classified in Phase 1. Since its initia l
recognition, its credit risk and qualities have been subject to continuous monitoring and analyses. Expected credit
losses on financial assets classified in Phase 1, are determined on the basis of credit losses that are the result of possible
events of default, which could occur within the next 12 months of the life of the asset (12-month expected credit loss
for the instrument).
b. In case where after the initial recognition of a financial asset its credit risk increases significantly and, as a result,
its performance deteriorates, it is classified in Phase 2. The expected credit losses of the financial assets classified in
Phase 2 are determined over the remaining life (term) of the asset, regardless of the time of the default (expected credit
losses over the lifetime (term) of the instrument).
c. In cases where the credit risk of a financial asset increases to a level that indicates that an event of default has
occurred, the financial asset is considered impaired and is classified in Phase 3. At this stage the losses incurred under
the relevant asset for all of its remaining life (term) are established and calculated.
The management of the Company has developed a policy and a set of criteria for analysing, identifying and assessing
the occurrence of a “significant increase in credit risk”.
For trade receivables and contract assets arising from transactions in the scope of IFRS 15 that do not contain a
significant financing component, the Company applies a simplified approach in accordance with IFRS 9, by
recognizing an impairment loss for expected credit losses based on the expected credit loss for the entire term of the
receivables at each reporting date. The Company applies a matrix that calculates the expected credit losses on trade
receivables. Receivables are classified as per the time they are overdue and are grouped by type and client segments
with different credit loss models.
For baseline data on trade receivables, the Company uses its accumulated experience of credit losses on such
instruments to measure expected credit losses. The historical data used is for periods of 3 to 5 years back, grouped by
type and corresponding client segment models, and adjusted by estimated factors specific to debtors and the industry
concerned.
For cash at banks, the Company recognizes impairment for expected credit losses by applying the standardized
approach, and the credit rating of the financial institutions in which the Company has deposited its cash is used to
determine the loss from default in the model parameters.
At each reporting date, the Company evaluates the impairment for each instrument at an amount equal to the expected
lifetime losses, if the credit risk for that instrument has increased significantly since the initial recognition.
In the event that, at the reporting date, the credit risk on a financial instrument has not increased significantly from the
time of initial recognition, the impairment for that financial instrument is equal to the expected 12-month credit losses.
Additional disclosures relating to the impairment of financial assets are also disclosed in the following notes:
➢ Disclosures of significant assessments and assumptions, note 4.22
➢ Trade and other receivables, note 22
➢ Receivables from related parties, note 32.3
➢ Cash, note 25
➢ Credit risk, note 35.5
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
19
4.9.2. Financial liabilities
Initial recognition, classification and evaluation
The Company recognizes a financial liability in the statement of financial position only when it becomes a party to
the contractual terms of the financial instrument.
Upon initial recognition, financial liabilities are classified as “financial liabilities subsequently measured at amortized
cost” (loans and borrowings, trade and other payables), or “financial liabilities at fair value through profit or loss”.
Initial recognition occurs at the settlement date and is carried out at fair value plus, in the case of financial liabilities
that are not carried at fair value through profit or loss, costs directly attributable to the acquisition or issue of the
financial liability. Loan management fees are deferred over the borrowing period using the effective interest method,
and are included in the amortized cost of the loans.
The financial liabilities of the Company include bank loans, trade and other payables and finance lease liabilities.
According to their repayment term, financial liabilities are classified as long-term and short-term ones.
Subsequent measurement
The subsequent measurement of financial liabilities depends on their classification as described below:
Financial liabilities measured at fair value in the profit or loss
Financial liabilities measured at fair value in the profit or loss, include financial liabilities held for trading, and
financial liabilities determined at their initial recognition at fair value through profit or loss.
Financial liabilities are classified as held for trading if they are incurred for redemption purposes in the near future.
Profit or losses on liabilities held for trading are recognized in profit or loss and other comprehensive income.
Financial liabilities determined at their initial recognition at fair value through profit or loss, are determined at the
initial recognition date and only if the criteria in IFRS 9 are met.
The Company has not designated financial liabilities as measured at fair value through profit or loss.
Financial liabilities evaluated at amortized cost
The category of “financial liabilities reported at amortized cost” includes borrowings, trade payables and other
payables where the Company has become a party to a contract or arrangement and which should be settled in net cash.
This category has the most significant share for the Company’s financial instruments and for it as a whole.
Granted loans are temporarily attracted funds against consideration from Bulgarian or foreign banks and other
financial institutions, commercial loans, etc.
Bank loans are taken to provide long- term support to the Company’s business. They are reflected in the statement of
financial position of the Company, net of loan costs. Direct transaction costs are reported in the profit or loss and other
comprehensive income on the accrual basis, using the effective interest method and added to the carrying amount of
the financial liability to the extent that they are not settled at the end of the period in which they occurred.
Financial liabilities are subsequently evaluated at amortized cost using the effective interest method. The amortized
cost is calculated taking into account any discount or premium on acquisition, also charges or expenses that are an
integral part of the effective interest rate. Expenses (calculated using the effective interest method) are included as
financial expense in the profit or loss statement and other comprehensive income in the line “Financial expenses”.
For financial liabilities that are measured at amortized cost, profit or loss is recognized in profit or loss for the period
when the financial asset or financial liability is derecognized or impaired also through the amortization process.
Trade payables are initially recognized at their nominal value and are subsequently measured at amortized cost less
payments to settle the liability.
Dividends payable to the sole shareholder are recognized when the dividends are approved at the General Meeting.
Derecognition
The Company derecognizes a financial liability only when the liability is settled (fulfilled), the liability expires, or the
creditor waives their rights.
Where an existing financial liability has been replaced by another one by the same lender under substantially different
conditions, or the terms of an existing payable have been materially changed, such an exchange or change is treated
Separate Financial Statements
31 December 2022
19
4.9.2. Financial liabilities
Initial recognition, classification and evaluation
The Company recognizes a financial liability in the statement of financial position only when it becomes a party to
the contractual terms of the financial instrument.
Upon initial recognition, financial liabilities are classified as “financial liabilities subsequently measured at amortized
cost” (loans and borrowings, trade and other payables), or “financial liabilities at fair value through profit or loss”.
Initial recognition occurs at the settlement date and is carried out at fair value plus, in the case of financial liabilities
that are not carried at fair value through profit or loss, costs directly attributable to the acquisition or issue of the
financial liability. Loan management fees are deferred over the borrowing period using the effective interest method,
and are included in the amortized cost of the loans.
The financial liabilities of the Company include bank loans, trade and other payables and finance lease liabilities.
According to their repayment term, financial liabilities are classified as long-term and short-term ones.
Subsequent measurement
The subsequent measurement of financial liabilities depends on their classification as described below:
Financial liabilities measured at fair value in the profit or loss
Financial liabilities measured at fair value in the profit or loss, include financial liabilities held for trading, and
financial liabilities determined at their initial recognition at fair value through profit or loss.
Financial liabilities are classified as held for trading if they are incurred for redemption purposes in the near future.
Profit or losses on liabilities held for trading are recognized in profit or loss and other comprehensive income.
Financial liabilities determined at their initial recognition at fair value through profit or loss, are determined at the
initial recognition date and only if the criteria in IFRS 9 are met.
The Company has not designated financial liabilities as measured at fair value through profit or loss.
Financial liabilities evaluated at amortized cost
The category of “financial liabilities reported at amortized cost” includes borrowings, trade payables and other
payables where the Company has become a party to a contract or arrangement and which should be settled in net cash.
This category has the most significant share for the Company’s financial instruments and for it as a whole.
Granted loans are temporarily attracted funds against consideration from Bulgarian or foreign banks and other
financial institutions, commercial loans, etc.
Bank loans are taken to provide long- term support to the Company’s business. They are reflected in the statement of
financial position of the Company, net of loan costs. Direct transaction costs are reported in the profit or loss and other
comprehensive income on the accrual basis, using the effective interest method and added to the carrying amount of
the financial liability to the extent that they are not settled at the end of the period in which they occurred.
Financial liabilities are subsequently evaluated at amortized cost using the effective interest method. The amortized
cost is calculated taking into account any discount or premium on acquisition, also charges or expenses that are an
integral part of the effective interest rate. Expenses (calculated using the effective interest method) are included as
financial expense in the profit or loss statement and other comprehensive income in the line “Financial expenses”.
For financial liabilities that are measured at amortized cost, profit or loss is recognized in profit or loss for the period
when the financial asset or financial liability is derecognized or impaired also through the amortization process.
Trade payables are initially recognized at their nominal value and are subsequently measured at amortized cost less
payments to settle the liability.
Dividends payable to the sole shareholder are recognized when the dividends are approved at the General Meeting.
Derecognition
The Company derecognizes a financial liability only when the liability is settled (fulfilled), the liability expires, or the
creditor waives their rights.
Where an existing financial liability has been replaced by another one by the same lender under substantially different
conditions, or the terms of an existing payable have been materially changed, such an exchange or change is treated
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
20
as a write-off of the original liability and recognition of a new liability. The difference in the appropriate carrying
amounts is recognized in the profit or loss.
The difference between the carrying amount of the financial liability settled or transferred to another party and the
consideration paid for the settlement, including money and the transfer of non-monetary assets, is recognized in profit
or loss for the period.
4.9.3 Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is presented in the statement of financial position
when there is a legally enforceable right to offset the amounts recognized and the Company intends to settle on a net
basis or to simultaneously realize the assets and settle the liabilities.
4.9.4 Fair value of financial instruments
At each reporting date, the fair value of financial instruments that are actively traded on the markets, is determined
on the basis of quoted market prices or dealer quotations (purchase prices for long positions and sale prices for short
positions) without deducting transaction costs.
The fair value of financial instruments for which there is no active market, is determined using measurement
techniques. These techniques include the use of recent direct market transactions; references to the current fair value
of another instrument that is substantially the same; discounted cash flow analysis and other measurement models.
An analysis of the fair values of the financial instruments and further details of how they are measured is given in note
36.
4.10 Equity, reserves and dividend payments
The registered capital of the Company reflects the nominal value of the issued shares. Other reserves include general
reserves and additional reserves. Revaluation reserves include a revaluation reserve of property, plant and equipment,
a revaluation reserve for available-for-sale financial assets, and a revaluation reserve for defined benefit plans.
Retained earnings include the current financial result and accumulated profits and uncovered losses from previous
years.
Dividend liabilities of the sole shareholder are included in the line “Payables to related parties” in the statement of
financial position, when the dividends are approved for distribution by the General Meeting before the end of the
reporting period.
All transactions with the Company’s sole shareholder are presented separately in the statement of equity .
4.11 Property, plant and equipment
Property, plant and equipment is initially measured at cost, including the purchase price and all direct costs of bringing
the asset to working condition. Their subsequent measurement after initial recognition is applied to the entire class of
identical assets as follows:
No. Property, plant and equipment Model for a subsequent
assessment
1 Land Revaluation model
2 Improvements on land and plots Revaluation model
3 Buildings and constructions
• massive Revaluation model
• non-massive Acquisition price
4 Machinery, plant and equipment Revaluation model
5 Computer systems Acquisition price
6 Vehicles
• freight vehicles Revaluation model
• passenger cars Acquisition price
• specialized motor vehicles Revaluation model
7 Furniture and fixtures and fittings Acquisition price
8 Spare parts, reported as property, plant and equipment Revaluation model
9 Other property, plant and equipment Acquisition price
Separate Financial Statements
31 December 2022
20
as a write-off of the original liability and recognition of a new liability. The difference in the appropriate carrying
amounts is recognized in the profit or loss.
The difference between the carrying amount of the financial liability settled or transferred to another party and the
consideration paid for the settlement, including money and the transfer of non-monetary assets, is recognized in profit
or loss for the period.
4.9.3 Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is presented in the statement of financial position
when there is a legally enforceable right to offset the amounts recognized and the Company intends to settle on a net
basis or to simultaneously realize the assets and settle the liabilities.
4.9.4 Fair value of financial instruments
At each reporting date, the fair value of financial instruments that are actively traded on the markets, is determined
on the basis of quoted market prices or dealer quotations (purchase prices for long positions and sale prices for short
positions) without deducting transaction costs.
The fair value of financial instruments for which there is no active market, is determined using measurement
techniques. These techniques include the use of recent direct market transactions; references to the current fair value
of another instrument that is substantially the same; discounted cash flow analysis and other measurement models.
An analysis of the fair values of the financial instruments and further details of how they are measured is given in note
36.
4.10 Equity, reserves and dividend payments
The registered capital of the Company reflects the nominal value of the issued shares. Other reserves include general
reserves and additional reserves. Revaluation reserves include a revaluation reserve of property, plant and equipment,
a revaluation reserve for available-for-sale financial assets, and a revaluation reserve for defined benefit plans.
Retained earnings include the current financial result and accumulated profits and uncovered losses from previous
years.
Dividend liabilities of the sole shareholder are included in the line “Payables to related parties” in the statement of
financial position, when the dividends are approved for distribution by the General Meeting before the end of the
reporting period.
All transactions with the Company’s sole shareholder are presented separately in the statement of equity .
4.11 Property, plant and equipment
Property, plant and equipment is initially measured at cost, including the purchase price and all direct costs of bringing
the asset to working condition. Their subsequent measurement after initial recognition is applied to the entire class of
identical assets as follows:
No. Property, plant and equipment Model for a subsequent
assessment
1 Land Revaluation model
2 Improvements on land and plots Revaluation model
3 Buildings and constructions
• massive Revaluation model
• non-massive Acquisition price
4 Machinery, plant and equipment Revaluation model
5 Computer systems Acquisition price
6 Vehicles
• freight vehicles Revaluation model
• passenger cars Acquisition price
• specialized motor vehicles Revaluation model
7 Furniture and fixtures and fittings Acquisition price
8 Spare parts, reported as property, plant and equipment Revaluation model
9 Other property, plant and equipment Acquisition price
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
21
Property, plant and equipment that is reported under the revaluation model, is subsequently measured at a revalued
amount equal to fair value at the revaluation date, less subsequently accumulated depreciation and impairment losses.
The revaluations made are presented in the statement of comprehensive income and are recognized in equity
(revaluation reserve) if they are not preceded by previously recognized expenses. Upon sale or derecognition of the
revalued asset, the remaining revaluation reserve is recognized in retained earnings.
The revaluations are performed in the following time intervals:
• when the fair value of assets undergoes only minor changes, the revaluation is made every three years;
• when the fair value of property, plant and equipment changes substantially in shorter time intervals, the revaluation
is carried out at shorter time intervals so that the carrying amount of the asset does not differ materially from its
fair value.
The frequency of subsequent revaluation of property, plant and equipment when applying the revaluation model,
depends on whether the carrying amount materially differs from the fair value of a revalued asset at the end of the
reporting period.
In this regard, when performing the annual stock-taking at the end of the reporting period (end of the financial year),
the Company reviews property, plant and equipment for indications whether their carrying amount is significantly
different from their fair value. A significant deviation is considered a deviation of the carrying amount from the fair
value of the asset by the date of preparation of the financial statement by more than 5%. The deviation is significant
also if it is below 5%, but the difference between the carrying amount and the fair value as a cumulative amount of
property, plant and equipment, is significant for the purpose of preparation of the financial statements.
Property, plant and equipment reported using the acquisition price model is subsequently measured at cost less
accumulated depreciation and impairment losses. Impairments are reported as an expense and recognized in the
statement of profit or loss for the period.
Subsequent costs associated with certain property, plant and equipment are added to the carrying amount of the asset,
when it is probable that the Company will have economic benefits that exceed the initially estimated effectiveness of
an existing asset. All other subsequent costs are recognized as an expense for the period in which they are incurred.
Depreciation of property, plant and equipment is calculated using the straight-line method over the estimated useful
lives of the individual asset groups as follows:
Machinery, plant and equipment 3-30 years
Vehicles 2-12 years
Fixtures and fittings 5-10 years
Property, plant and equipment is derecognized upon sale or when no future economic benefits are expected from its
use or at its disposal. Profit or losses arising on derecognition of the asset, representing the difference between the net
sales proceeds, if any, and the carrying amount of the asset, are recognized in the statement of profit or loss when the
asset is derecognized.
At the end of each financial year, residual values, useful lives and depreciation methods are reviewed and if
expectations differ from previous estimates, they are revised in future periods.
The materiality threshold chosen for the Company’s property, plant and equipment amounts to BGN 500.
4.12 Leasing
The Company as a lessee
The Company estimates whether the contract is or contains a lease. Lease is defined as “a contract or a part thereof,
which bears the right to use an asset (the main asset) for a period of time in return for payment”. The Company, in
order to apply this definition, estimates whether the contract complies with three key evaluations, which are whether:
∙ The contract comprises a certain asset that is either explicitly identified in the contract, or is indicated
implicitly, which will be identified when the asset is made available to the Company;
∙ The Company is entitled to obtain essentially all economic benefits derived from the use of such an asset
during the entire period of use, taking into consideration its rights within the defined scope of the contract;
Separate Financial Statements
31 December 2022
21
Property, plant and equipment that is reported under the revaluation model, is subsequently measured at a revalued
amount equal to fair value at the revaluation date, less subsequently accumulated depreciation and impairment losses.
The revaluations made are presented in the statement of comprehensive income and are recognized in equity
(revaluation reserve) if they are not preceded by previously recognized expenses. Upon sale or derecognition of the
revalued asset, the remaining revaluation reserve is recognized in retained earnings.
The revaluations are performed in the following time intervals:
• when the fair value of assets undergoes only minor changes, the revaluation is made every three years;
• when the fair value of property, plant and equipment changes substantially in shorter time intervals, the revaluation
is carried out at shorter time intervals so that the carrying amount of the asset does not differ materially from its
fair value.
The frequency of subsequent revaluation of property, plant and equipment when applying the revaluation model,
depends on whether the carrying amount materially differs from the fair value of a revalued asset at the end of the
reporting period.
In this regard, when performing the annual stock-taking at the end of the reporting period (end of the financial year),
the Company reviews property, plant and equipment for indications whether their carrying amount is significantly
different from their fair value. A significant deviation is considered a deviation of the carrying amount from the fair
value of the asset by the date of preparation of the financial statement by more than 5%. The deviation is significant
also if it is below 5%, but the difference between the carrying amount and the fair value as a cumulative amount of
property, plant and equipment, is significant for the purpose of preparation of the financial statements.
Property, plant and equipment reported using the acquisition price model is subsequently measured at cost less
accumulated depreciation and impairment losses. Impairments are reported as an expense and recognized in the
statement of profit or loss for the period.
Subsequent costs associated with certain property, plant and equipment are added to the carrying amount of the asset,
when it is probable that the Company will have economic benefits that exceed the initially estimated effectiveness of
an existing asset. All other subsequent costs are recognized as an expense for the period in which they are incurred.
Depreciation of property, plant and equipment is calculated using the straight-line method over the estimated useful
lives of the individual asset groups as follows:
Machinery, plant and equipment 3-30 years
Vehicles 2-12 years
Fixtures and fittings 5-10 years
Property, plant and equipment is derecognized upon sale or when no future economic benefits are expected from its
use or at its disposal. Profit or losses arising on derecognition of the asset, representing the difference between the net
sales proceeds, if any, and the carrying amount of the asset, are recognized in the statement of profit or loss when the
asset is derecognized.
At the end of each financial year, residual values, useful lives and depreciation methods are reviewed and if
expectations differ from previous estimates, they are revised in future periods.
The materiality threshold chosen for the Company’s property, plant and equipment amounts to BGN 500.
4.12 Leasing
The Company as a lessee
The Company estimates whether the contract is or contains a lease. Lease is defined as “a contract or a part thereof,
which bears the right to use an asset (the main asset) for a period of time in return for payment”. The Company, in
order to apply this definition, estimates whether the contract complies with three key evaluations, which are whether:
∙ The contract comprises a certain asset that is either explicitly identified in the contract, or is indicated
implicitly, which will be identified when the asset is made available to the Company;
∙ The Company is entitled to obtain essentially all economic benefits derived from the use of such an asset
during the entire period of use, taking into consideration its rights within the defined scope of the contract;
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
22
∙ The Company is entitled to guide the use of the asset in question during the whole period of use. The
Company judges whether it has the right to direct “how and with what purpose” the asset should be used
throughout the whole period of utilization.
Assessment and recognition of leasing as a lessee
On the date when the lease starts, the Company recognizes a right-of-use asset and lease obligation in the balance
sheet. The right-of-use asset is valued at cost, which consists of the initial assessment of the lease liability, all initial
direct costs incurred by the Company, assessment of all costs of dismantling and removal of the asset at the end of the
lease, and any kind of lease payments made before the commencement date of the lease (without any incentives
received).
The Company amortizes the right-of-use assets by linear base from the lease commencement date to the earlier one
of either the end of the useful life of the right-of-use asset, or the end of the lease term. The Company also conducts
a right-of-use asset impairment review, when it has such indicators.
On the starting date the Company assesses the lease obligation under the current value of the outstanding lease
payments by such date, discounted, using the interest rate that is included in the lease contract. If that percentage
cannot be determined directly, the Company uses the interest rate which it would have to pay in order to borrow for a
similar period of time with a similar collateral, the funds required to obtain an asset with a similar value in a similar
economic environment.
The lease payments included in the assessment of the leasing obligation, consist of fixed payments, variable payments
based on an index or percentage, amounts that are expected to be payable according to a residual value guarantee, and
payments stemming from options, reasonably secure to be possible to be exercised.
After the starting date the Company assesses the lease liability by increasing the balance sheet value, in order to record
the interest on the lease liability and reduce the balance sheet value, in order to reflect the lease payments made, and
revalues the balance sheet value of the liability, in order to reflect the revaluations or amendments of the lease contract,
or record the adjusted in-substance fixed lease payments.
The Company is facing potential future increases in the variable lease payments based on an index or interest rate,
which are not included in the lease liability until their entry into force. When the lease payment adjustments take
effect, based on an index or interest, the leasing obligation is revalued or adjusted in relation to the right-of-use asset.
When the lease liability is revalued, the respective adjustment is recorded in the liability with the right to use, or in
the profit and loss, if the right-of-use asset has already been reduced to zero.
The Company has chosen to take into account the short-term leases, and lease contracts whose main asset has a low
value, using exemptions from the recognition requirements. Instead of recognition of an right-of-use asset and a
leasing obligation, payments in connection with them are recognized as an expense in profit or loss of a linear line
during the lease term.
In the separate statement of financial position the right-of-use assets are included in property, plant and equipment,
while the leasing obligations are included in commercial and other obligations.
The Company as a lessor
The Group’s accounting policy under the IFRS 16 has not changed from the comparative period.
As a lessor, the Company classifies its lease contracts as operating or financial lease.
Leasing is classified as financial lease, if it transfers essentially all risks and benefits related to the ownership of the
main asset, and is classified as operating lease if it does not do it.
4.13 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a
substantial period of time to get ready for its intended use or sale, are capitalized as part of the acquisition price thereof.
All other borrowing costs are recognized as an expense in the period to which they relate. Borrowing costs include
interest and other costs that the Company incurs in connection with the borrowing of funds.
4.14 Intangible assets
Intangible assets that are separately acquired are initially measured at acquisition price. After initial recognition
intangible assets are evaluated at cost less accumulated amortization and accumulated impairment losses.
The useful life of intangible assets is defined as limited to the following periods:
Separate Financial Statements
31 December 2022
22
∙ The Company is entitled to guide the use of the asset in question during the whole period of use. The
Company judges whether it has the right to direct “how and with what purpose” the asset should be used
throughout the whole period of utilization.
Assessment and recognition of leasing as a lessee
On the date when the lease starts, the Company recognizes a right-of-use asset and lease obligation in the balance
sheet. The right-of-use asset is valued at cost, which consists of the initial assessment of the lease liability, all initial
direct costs incurred by the Company, assessment of all costs of dismantling and removal of the asset at the end of the
lease, and any kind of lease payments made before the commencement date of the lease (without any incentives
received).
The Company amortizes the right-of-use assets by linear base from the lease commencement date to the earlier one
of either the end of the useful life of the right-of-use asset, or the end of the lease term. The Company also conducts
a right-of-use asset impairment review, when it has such indicators.
On the starting date the Company assesses the lease obligation under the current value of the outstanding lease
payments by such date, discounted, using the interest rate that is included in the lease contract. If that percentage
cannot be determined directly, the Company uses the interest rate which it would have to pay in order to borrow for a
similar period of time with a similar collateral, the funds required to obtain an asset with a similar value in a similar
economic environment.
The lease payments included in the assessment of the leasing obligation, consist of fixed payments, variable payments
based on an index or percentage, amounts that are expected to be payable according to a residual value guarantee, and
payments stemming from options, reasonably secure to be possible to be exercised.
After the starting date the Company assesses the lease liability by increasing the balance sheet value, in order to record
the interest on the lease liability and reduce the balance sheet value, in order to reflect the lease payments made, and
revalues the balance sheet value of the liability, in order to reflect the revaluations or amendments of the lease contract,
or record the adjusted in-substance fixed lease payments.
The Company is facing potential future increases in the variable lease payments based on an index or interest rate,
which are not included in the lease liability until their entry into force. When the lease payment adjustments take
effect, based on an index or interest, the leasing obligation is revalued or adjusted in relation to the right-of-use asset.
When the lease liability is revalued, the respective adjustment is recorded in the liability with the right to use, or in
the profit and loss, if the right-of-use asset has already been reduced to zero.
The Company has chosen to take into account the short-term leases, and lease contracts whose main asset has a low
value, using exemptions from the recognition requirements. Instead of recognition of an right-of-use asset and a
leasing obligation, payments in connection with them are recognized as an expense in profit or loss of a linear line
during the lease term.
In the separate statement of financial position the right-of-use assets are included in property, plant and equipment,
while the leasing obligations are included in commercial and other obligations.
The Company as a lessor
The Group’s accounting policy under the IFRS 16 has not changed from the comparative period.
As a lessor, the Company classifies its lease contracts as operating or financial lease.
Leasing is classified as financial lease, if it transfers essentially all risks and benefits related to the ownership of the
main asset, and is classified as operating lease if it does not do it.
4.13 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a
substantial period of time to get ready for its intended use or sale, are capitalized as part of the acquisition price thereof.
All other borrowing costs are recognized as an expense in the period to which they relate. Borrowing costs include
interest and other costs that the Company incurs in connection with the borrowing of funds.
4.14 Intangible assets
Intangible assets that are separately acquired are initially measured at acquisition price. After initial recognition
intangible assets are evaluated at cost less accumulated amortization and accumulated impairment losses.
The useful life of intangible assets is defined as limited to the following periods:
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
23
Patents, licenses 5-10 years
Software 2-8 years
Other intangible assets 2 years
Intangible assets with finite useful lives are depreciated over their useful lives and tested for impairment when there
are indications that their value may be impaired. The amortization period and the amortization method for intangible
assets with a finite useful life are reviewed at least at the end of each financial year. Changes in the expected useful
life or the model for utilizing the future economic benefits of the intangible asset are reported by a change in the
amortization period or method and are treated as a change in the accounting estimates.
Profit or losses arising on derecognition of an intangible asset, representing the difference between the net sales
proceeds and the carrying amount of the asset, are recognized in the statement of profit or loss when the asset is
derecognized.
4.15 Investments in subsidiaries
Subsidiaries are all entities that are controlled by the Company. Control of a subsidiary is the right to manage and
determine the financial and operating policies of an entity in order to obtain benefits from its activities. In the separate
financial statements of the Company, investments in subsidiaries are reported at cost.
Long-term investments in subsidiaries are presented in the financial statements at cost (prime cost), which is the fair
value of the consideration paid, including the direct costs of acquiring the investment less the accumulated impairment.
When impairment conditions are established, it is recognized in the profit or loss.
Upon purchase and sale of investments in subsidiaries and associates, the “date of conclusion” of the transaction is
applied.
Investments are derecognized when the rights that result from them are transferred to other entities upon the
occurrence of the legal basis and thus the control of the economic benefits of the investment is lost. Profit / (loss) from
sale is presented on the face of the profit or loss statement respectively.
The Company recognizes a dividend from a subsidiary in profit or loss in its separate financial statements, when its
right to receive the dividend is established.
4.16 Investments in associates and joint ventures
A joint venture is a contractual arrangement whereby the Company and other independent parties undertake an
economic activity subject to joint control and the parties holding joint control of the entity are entitled to the net assets
of the entity. Investments in joint ventures are reported at cost.
Associates are those entities over which the Company is able to exercise significant influence, but which are neither
subsidiaries nor joint ventures. Investments in associates are reported at cost.
The Company recognizes a dividend from a joint venture or associate in profit or loss in its separatel financial
statements, when its right to receive the dividend is established
4.17 Inventory
Inventories include materials. The cost of inventories includes direct purchase costs and other direct costs related to
their delivery. At the end of each reporting period inventories are evaluated at the lower one of their cost price or net
realizable value. Net realizable value is the estimated selling price of the inventory, less the expected selling costs.
The amount of any impairment of inventories up to their net realizable value, is recognized as an expense for the
period of impairment. The Company determines the cost of inventories using the weighted average cost method.
4.18 Impairment of non-financial assets and investments in subsidiaries, joint ventures and associates
At each reporting date, the Company assesses whether there are indications that an asset is impaired. In the case of
such indications, or when an annual impairment test of an asset is required, the Company determines the recoverable
amount of that asset. The recoverable amount of the asset is the higher one of the fair value less costs to sell the asset
or cash-generating unit (CGU) and its value in use. The recoverable amount is determined for a separate asset unless
the use of the asset does not generate cash flows that are substantially independent of the cash flows generated by
other assets or groups of assets. When the carrying amount of an asset or CGU is higher than its recoverable amount,
the asset is considered to be impaired and its carrying amount is reduced to its recoverable amount.
Separate Financial Statements
31 December 2022
23
Patents, licenses 5-10 years
Software 2-8 years
Other intangible assets 2 years
Intangible assets with finite useful lives are depreciated over their useful lives and tested for impairment when there
are indications that their value may be impaired. The amortization period and the amortization method for intangible
assets with a finite useful life are reviewed at least at the end of each financial year. Changes in the expected useful
life or the model for utilizing the future economic benefits of the intangible asset are reported by a change in the
amortization period or method and are treated as a change in the accounting estimates.
Profit or losses arising on derecognition of an intangible asset, representing the difference between the net sales
proceeds and the carrying amount of the asset, are recognized in the statement of profit or loss when the asset is
derecognized.
4.15 Investments in subsidiaries
Subsidiaries are all entities that are controlled by the Company. Control of a subsidiary is the right to manage and
determine the financial and operating policies of an entity in order to obtain benefits from its activities. In the separate
financial statements of the Company, investments in subsidiaries are reported at cost.
Long-term investments in subsidiaries are presented in the financial statements at cost (prime cost), which is the fair
value of the consideration paid, including the direct costs of acquiring the investment less the accumulated impairment.
When impairment conditions are established, it is recognized in the profit or loss.
Upon purchase and sale of investments in subsidiaries and associates, the “date of conclusion” of the transaction is
applied.
Investments are derecognized when the rights that result from them are transferred to other entities upon the
occurrence of the legal basis and thus the control of the economic benefits of the investment is lost. Profit / (loss) from
sale is presented on the face of the profit or loss statement respectively.
The Company recognizes a dividend from a subsidiary in profit or loss in its separate financial statements, when its
right to receive the dividend is established.
4.16 Investments in associates and joint ventures
A joint venture is a contractual arrangement whereby the Company and other independent parties undertake an
economic activity subject to joint control and the parties holding joint control of the entity are entitled to the net assets
of the entity. Investments in joint ventures are reported at cost.
Associates are those entities over which the Company is able to exercise significant influence, but which are neither
subsidiaries nor joint ventures. Investments in associates are reported at cost.
The Company recognizes a dividend from a joint venture or associate in profit or loss in its separatel financial
statements, when its right to receive the dividend is established
4.17 Inventory
Inventories include materials. The cost of inventories includes direct purchase costs and other direct costs related to
their delivery. At the end of each reporting period inventories are evaluated at the lower one of their cost price or net
realizable value. Net realizable value is the estimated selling price of the inventory, less the expected selling costs.
The amount of any impairment of inventories up to their net realizable value, is recognized as an expense for the
period of impairment. The Company determines the cost of inventories using the weighted average cost method.
4.18 Impairment of non-financial assets and investments in subsidiaries, joint ventures and associates
At each reporting date, the Company assesses whether there are indications that an asset is impaired. In the case of
such indications, or when an annual impairment test of an asset is required, the Company determines the recoverable
amount of that asset. The recoverable amount of the asset is the higher one of the fair value less costs to sell the asset
or cash-generating unit (CGU) and its value in use. The recoverable amount is determined for a separate asset unless
the use of the asset does not generate cash flows that are substantially independent of the cash flows generated by
other assets or groups of assets. When the carrying amount of an asset or CGU is higher than its recoverable amount,
the asset is considered to be impaired and its carrying amount is reduced to its recoverable amount.
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
24
In determining the value in use of an asset, the expected future cash flows are discounted to their present value, using
a pre-tax discounted rate that reflects current market valuation of money in time and asset-specific risks. The fair value
less costs to sell is determined using the appropriate evaluation model. The calculations made are confirmed using
other evaluation models or other available sources of information about the fair value of an asset or a cash-generating
unit. Impairment losses are recognized as an expense in the Statement of Profit or Loss except for non-current assets
that were revalued in prior periods and the revaluation increase is recognized in the other comprehensive income. In
this case, the impairment loss is also recognized in other comprehensive income to the extent of the previously
recognized revaluation of the asset.
At each reporting date, the Company assesses whether there are indications that the impairment loss of an asset
recognized in prior periods may no longer exist or may have decreased. If such indications exist, the Company
determines the recoverable amount of the asset or cash-generating unit. An impairment loss is reversed only when
there has been a change in the estimates used to determine the recoverable amount of the asset after recognition of the
last impairment loss. The reversal of an impairment loss is limited so that the carrying amount of the asset does not
exceed its recoverable amount, nor exceed the carrying amount (after deduction of depreciation or amortization), that
would have been determined had no impairment loss been recognized for the asset in previous years. The reversal of
an impairment loss is recognized in the statement of profit or loss unless the asset is carried at revalued amount, in
which case the reversal is treated as an increase from revaluation.
4.19 Cash and cash equivalents
Cash and cash equivalents in the statement of financial position include cash in bank accounts, cash and short-term
deposits with an initial maturity of three months or less.
Subsequent measurement
Cash and cash equivalents in banks are subsequently presented at amortized cost less accumulated impairment for
expected credit losses.
.
4.20 Provisions
Provisions are recognized when the Company has a present obligation (either legal or constructive) as a result of past
events, the obligation will probably lead to an outflow of economic resources from the Company, and amounts can be
estimated reliably. When the Company expects that some or all of the expenses necessary to settle the provision will
be recovered, for example under an insurance contract, the reimbursement is recognized as a separate asset, but only
when it is practically certain that these costs will be recovered. Provisioning costs are recognized net of the amount
of reimbursement in the statement of profit or loss. When the effect of time differences in the value of money is
significant, provisions are discounted using a current pre-tax discounted rate that reflects, where appropriate, the risks
specific to the liability. When discounting is used, the increase in the provision as a result of the elapsed time is
presented as a financial expense.
4.21 Funding (government grants)
Government grants are recognized when there is reasonable certainty that the grant will be received and that all
attached conditions will be complied with. When the grant relates to a cost item, it is recognized as revenue for the
periods necessary to compare the grant on a systematic basis with the costs it is intended to compensate. When the
grant relates to an asset, it is presented as deferred income and is included in the income at equal amounts over the
estimated useful life of the related asset.
When the Company receives non-cash government grants, the grant and the asset are reported at face value, and the
grant is recognized as income in the Statement of Profit or Loss in equal parts each year over the useful life of the
asset.
4.22 Significant management judgment in applying the accounting policy. Uncertainty of the accounting
estimates
The preparation of the financial statements necessitates that the management should make approximate accounting
estimates, judgements and assumptions, which affect the accounting policy application and the reported amounts of
assets, liabilities, income and expenses. The actual results may differ from the conjectures, assessments and
assumptions of the management and in rare cases totally comply with the pre-evaluated results.
Separate Financial Statements
31 December 2022
24
In determining the value in use of an asset, the expected future cash flows are discounted to their present value, using
a pre-tax discounted rate that reflects current market valuation of money in time and asset-specific risks. The fair value
less costs to sell is determined using the appropriate evaluation model. The calculations made are confirmed using
other evaluation models or other available sources of information about the fair value of an asset or a cash-generating
unit. Impairment losses are recognized as an expense in the Statement of Profit or Loss except for non-current assets
that were revalued in prior periods and the revaluation increase is recognized in the other comprehensive income. In
this case, the impairment loss is also recognized in other comprehensive income to the extent of the previously
recognized revaluation of the asset.
At each reporting date, the Company assesses whether there are indications that the impairment loss of an asset
recognized in prior periods may no longer exist or may have decreased. If such indications exist, the Company
determines the recoverable amount of the asset or cash-generating unit. An impairment loss is reversed only when
there has been a change in the estimates used to determine the recoverable amount of the asset after recognition of the
last impairment loss. The reversal of an impairment loss is limited so that the carrying amount of the asset does not
exceed its recoverable amount, nor exceed the carrying amount (after deduction of depreciation or amortization), that
would have been determined had no impairment loss been recognized for the asset in previous years. The reversal of
an impairment loss is recognized in the statement of profit or loss unless the asset is carried at revalued amount, in
which case the reversal is treated as an increase from revaluation.
4.19 Cash and cash equivalents
Cash and cash equivalents in the statement of financial position include cash in bank accounts, cash and short-term
deposits with an initial maturity of three months or less.
Subsequent measurement
Cash and cash equivalents in banks are subsequently presented at amortized cost less accumulated impairment for
expected credit losses.
.
4.20 Provisions
Provisions are recognized when the Company has a present obligation (either legal or constructive) as a result of past
events, the obligation will probably lead to an outflow of economic resources from the Company, and amounts can be
estimated reliably. When the Company expects that some or all of the expenses necessary to settle the provision will
be recovered, for example under an insurance contract, the reimbursement is recognized as a separate asset, but only
when it is practically certain that these costs will be recovered. Provisioning costs are recognized net of the amount
of reimbursement in the statement of profit or loss. When the effect of time differences in the value of money is
significant, provisions are discounted using a current pre-tax discounted rate that reflects, where appropriate, the risks
specific to the liability. When discounting is used, the increase in the provision as a result of the elapsed time is
presented as a financial expense.
4.21 Funding (government grants)
Government grants are recognized when there is reasonable certainty that the grant will be received and that all
attached conditions will be complied with. When the grant relates to a cost item, it is recognized as revenue for the
periods necessary to compare the grant on a systematic basis with the costs it is intended to compensate. When the
grant relates to an asset, it is presented as deferred income and is included in the income at equal amounts over the
estimated useful life of the related asset.
When the Company receives non-cash government grants, the grant and the asset are reported at face value, and the
grant is recognized as income in the Statement of Profit or Loss in equal parts each year over the useful life of the
asset.
4.22 Significant management judgment in applying the accounting policy. Uncertainty of the accounting
estimates
The preparation of the financial statements necessitates that the management should make approximate accounting
estimates, judgements and assumptions, which affect the accounting policy application and the reported amounts of
assets, liabilities, income and expenses. The actual results may differ from the conjectures, assessments and
assumptions of the management and in rare cases totally comply with the pre-evaluated results.
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
25
The approximate accounting estimates and the respective substantial assumptions are checked currently. The results
from the change in the approximate accounting estimates are recognized in the period in which the change was made
as well as in any future period concerned.
Information on the substantial conjectures, assessments and assumptions as well as major sources of uncertainty in
the use of approximate accounting estimates which exercise the highest influence on the recognition and evaluation
of assets, liabilities, income and expenses, is presented herein below.
Recognition and valuation of expected credit losses of debt instruments at amortized cost (Note 4.9)
The valuation of the expected credit loss of financial assets at amortized cost (loans, receivables, cash and cash
equivalents) requires the use of models and material assumptions about future economic conditions and credit
behaviour of customers and debtors. For the application of these requirements the Company’s management makes a
number of significant judgments setting criteria for identifying and assessing significant credit risk increases,
appropriate models and assumptions to measure expected credit losses, identifying and assessing the dependence
between historical default rates and the behaviour of certain macro indicators to reflect the future effects of the
estimated credit losses.
Approach for impairment of cash in banks
Cash and cash equivalents are the most liquid financial instruments. They do not hold settlement risk, and the liquidity
risk they carry is limited to the technical possibility that a disposal of them will not be made. However cash deposited
with banks is a counterparty credit risk (risk of default). Counterparty risk is the likelihood that the counterparty in a
financial transaction will not fulfil its contractual obligations. The Company applies the standardized approach for
calculating the expected credit losses of cash at banks, and the credit rating of the financial institutions in which the
Company has deposited its cash is used to determine the default loss in the model parameters. As of 31 December
2022, the management's best estimate of expected credit losses in banks amounts to BGN 7,428 thousand. (31
December 2021: BGN 2,432 thousand) (Note 25).
Approach for impairment of short-term trade and other receivables and receivables from related parties
The Company applies a simplified approach to calculate the expected credit losses for trade receivables that do not
contain a financing element.
For the purpose of determining the expected credit losses, modelling at the client’s level is done. Modelling is the
inherent removal of financial risk that customers bring to companies in the Company.
Expected credit losses are calculated for each single receivable (invoice, interest rate, etc.) adjusted on the basis of
past due dates and the standard counterparty payment cycle. The average number of days of customer’s delay is
determined on the basis of historical information about the period of payment of customers payables. The retrospective
review is for a period of 3 to 5 years.
Additional risk has been identified based on historical experience in collecting receivables, including deteriorated
financial condition, liquidity problems, and other difficulties.
The assessment of the ratio between observed historical default data, estimated economic conditions, industry risk
rating, and the amount of expected credit losses, is a significant estimate. Information on impairment of expected
credit losses of the Company is presented in notes 22, 32.1, and 32.3.
Approach for impairment of granted loans, trade receivables and receivables from related parties with a financing
element
The Company applies an individual approach for impairment of receivables with an element of financing and granted
loans. The impairment model is based on the cash flows agreed in the financial instrument, as well as the assumptions
and estimates of expected cash flows and the realization of the financial asset adopted by the management in the
preparation of the financial statements.
Expected credit losses are a probability-weighted estimate of credit losses (i.e. the present value of each shortage of
money) over the expected term of the financial instrument. Cash deficit is the difference between the cash flows
payable to the Company in accordance with the contract, and the cash flows that the Company expects to receive.
Because the expected credit losses account for the amount and timing of payments, an expected credit loss is
recognized even if the Company expects the asset to be fully paid, but later than the due date.
Depending on the characteristics of the asset and the counterparty, the expected future cash flows from the asset may
materially differ from the contracted assets. This would also lead to significant levels of expected credit losses on the
asset.
Revision of expected future cash flows for each specific asset is made as of each reporting date.
Separate Financial Statements
31 December 2022
25
The approximate accounting estimates and the respective substantial assumptions are checked currently. The results
from the change in the approximate accounting estimates are recognized in the period in which the change was made
as well as in any future period concerned.
Information on the substantial conjectures, assessments and assumptions as well as major sources of uncertainty in
the use of approximate accounting estimates which exercise the highest influence on the recognition and evaluation
of assets, liabilities, income and expenses, is presented herein below.
Recognition and valuation of expected credit losses of debt instruments at amortized cost (Note 4.9)
The valuation of the expected credit loss of financial assets at amortized cost (loans, receivables, cash and cash
equivalents) requires the use of models and material assumptions about future economic conditions and credit
behaviour of customers and debtors. For the application of these requirements the Company’s management makes a
number of significant judgments setting criteria for identifying and assessing significant credit risk increases,
appropriate models and assumptions to measure expected credit losses, identifying and assessing the dependence
between historical default rates and the behaviour of certain macro indicators to reflect the future effects of the
estimated credit losses.
Approach for impairment of cash in banks
Cash and cash equivalents are the most liquid financial instruments. They do not hold settlement risk, and the liquidity
risk they carry is limited to the technical possibility that a disposal of them will not be made. However cash deposited
with banks is a counterparty credit risk (risk of default). Counterparty risk is the likelihood that the counterparty in a
financial transaction will not fulfil its contractual obligations. The Company applies the standardized approach for
calculating the expected credit losses of cash at banks, and the credit rating of the financial institutions in which the
Company has deposited its cash is used to determine the default loss in the model parameters. As of 31 December
2022, the management's best estimate of expected credit losses in banks amounts to BGN 7,428 thousand. (31
December 2021: BGN 2,432 thousand) (Note 25).
Approach for impairment of short-term trade and other receivables and receivables from related parties
The Company applies a simplified approach to calculate the expected credit losses for trade receivables that do not
contain a financing element.
For the purpose of determining the expected credit losses, modelling at the client’s level is done. Modelling is the
inherent removal of financial risk that customers bring to companies in the Company.
Expected credit losses are calculated for each single receivable (invoice, interest rate, etc.) adjusted on the basis of
past due dates and the standard counterparty payment cycle. The average number of days of customer’s delay is
determined on the basis of historical information about the period of payment of customers payables. The retrospective
review is for a period of 3 to 5 years.
Additional risk has been identified based on historical experience in collecting receivables, including deteriorated
financial condition, liquidity problems, and other difficulties.
The assessment of the ratio between observed historical default data, estimated economic conditions, industry risk
rating, and the amount of expected credit losses, is a significant estimate. Information on impairment of expected
credit losses of the Company is presented in notes 22, 32.1, and 32.3.
Approach for impairment of granted loans, trade receivables and receivables from related parties with a financing
element
The Company applies an individual approach for impairment of receivables with an element of financing and granted
loans. The impairment model is based on the cash flows agreed in the financial instrument, as well as the assumptions
and estimates of expected cash flows and the realization of the financial asset adopted by the management in the
preparation of the financial statements.
Expected credit losses are a probability-weighted estimate of credit losses (i.e. the present value of each shortage of
money) over the expected term of the financial instrument. Cash deficit is the difference between the cash flows
payable to the Company in accordance with the contract, and the cash flows that the Company expects to receive.
Because the expected credit losses account for the amount and timing of payments, an expected credit loss is
recognized even if the Company expects the asset to be fully paid, but later than the due date.
Depending on the characteristics of the asset and the counterparty, the expected future cash flows from the asset may
materially differ from the contracted assets. This would also lead to significant levels of expected credit losses on the
asset.
Revision of expected future cash flows for each specific asset is made as of each reporting date.
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
26
Information on impairment of the Company’s expected credit losses on loans granted to related parties is presented in
note 32.1, and on the expected credit losses of receivables with a funding element in note 32.3.
Approach for impairment of judicial and adjudicated receivables
In cases where the Company has taken legal action to satisfy its receivables, they are classified as court receivables.
This type of receivable is characterized by a total default – i.e. reluctance or inability of the client to settle his / her
obligation. For this reason, irrespective of the existence of judgments of the judiciary and the enforcement procedures
launched, the rate of collection of these receivables and resp. expected future cash inflows are low, and the probability
of default has already occurred with respect to the original asset, i.e. it is equal to 100%.
Expected credit losses are the sum of the expected credit losses for each judicial and awarded receivable based on the
historical rate of collection of this asset class. Further information is also provided in note 22.
Impairment of non-financial assets
The amount by which the carrying amount of an asset or cash-generating unit exceeds its recoverable amount that is
the higher of the fair value less costs to sell an asset and its value in use, is recognized as impairment loss. In order to
determine the value in use, the Company’s management calculates the expected future cash flows for each cash -
generating unit, and determines the appropriate discount factor to calculate the present value of those cash flows (see
note 4.18). When calculating expected future cash flows, the management makes assumptions about future gross
profits. These assumptions are related to future events and circumstances. Actual results may differ and lead to
significant adjustments to the Company’s assets in the next accounting year.
In most cases, the appropriate adjustments in relation to market risk and risk factors that are specific to individual
assets are assessed in determining the applicable discount factor.
Investments in associates
BEH EAD owns directly 0.32% of the share capital of ZAD Energy. The equity investment is accounted for as an
investment in an associate due to additional indirect participation in the capital of ZAD Energy through other
subsidiaries, resulting in a total direct and indirect equity participation of 48.08%.
Principle – assumption of a going concern
The sole shareholder of the Company is the Bulgarian State through the Minister of Energy, in their capacity as
Principal. The functioning and the future development of the Company is entirely dependent on the future intentions
and strategy of the state regarding the continuation of its functions and activities within the energy sector in Bulgaria.
The management has analysed the validity of the going concern assumption, taking into account the principal’s
intentions in the short and medium term. As a result, it has come to the conclusion that the use of the going concern
assumption is appropriate.
Revenues from contracts with customers
When recognizing revenues under contracts with customers, the management makes various estimates,
approximations and assumptions that affect the reported revenue, expense, assets and contingent liabilities. The key
estimates and assumptions that have a material impact on the amount and timing of recognizing revenue from customer
contracts are disclosed in note 4.5 Revenue Recognition, Performance obligations and approach to recognition of main
types of revenue from contracts with customers.
Assets with right to use and liabilities under lease contracts
The Company makes estimates based on its assessments concerning the identification of leasing elements in the
contracts, the likely terms of validity of the lease contracts, the extension and termination options, determining the
differential interest rate, etc., in recognizing “right-of-use assets ” and liabilities under lease contracts. Such estimates
have an effect on the reported income, expenses, assets and liabilities under lease contracts, and the respective
disclosures.
As a result of the uncertainty regarding these assumptions and estimates it is possible that changes will arise in the
balance sheet value of right-of-use assets, liabilities under lease contracts and the reported expenses and revenue due
to changes from revaluations or changes in the lease contracts.
Employee retirement benefits
The retirement benefit obligation for employees is determined by actuarial valuation. This valuation requires making
assumptions about discount rates, future salary increases, staff turnover and mortality rates. Due to the long-term
nature of employee retirement benefits, these assumptions are subject to significant uncertainty. As of 31 December
Separate Financial Statements
31 December 2022
26
Information on impairment of the Company’s expected credit losses on loans granted to related parties is presented in
note 32.1, and on the expected credit losses of receivables with a funding element in note 32.3.
Approach for impairment of judicial and adjudicated receivables
In cases where the Company has taken legal action to satisfy its receivables, they are classified as court receivables.
This type of receivable is characterized by a total default – i.e. reluctance or inability of the client to settle his / her
obligation. For this reason, irrespective of the existence of judgments of the judiciary and the enforcement procedures
launched, the rate of collection of these receivables and resp. expected future cash inflows are low, and the probability
of default has already occurred with respect to the original asset, i.e. it is equal to 100%.
Expected credit losses are the sum of the expected credit losses for each judicial and awarded receivable based on the
historical rate of collection of this asset class. Further information is also provided in note 22.
Impairment of non-financial assets
The amount by which the carrying amount of an asset or cash-generating unit exceeds its recoverable amount that is
the higher of the fair value less costs to sell an asset and its value in use, is recognized as impairment loss. In order to
determine the value in use, the Company’s management calculates the expected future cash flows for each cash -
generating unit, and determines the appropriate discount factor to calculate the present value of those cash flows (see
note 4.18). When calculating expected future cash flows, the management makes assumptions about future gross
profits. These assumptions are related to future events and circumstances. Actual results may differ and lead to
significant adjustments to the Company’s assets in the next accounting year.
In most cases, the appropriate adjustments in relation to market risk and risk factors that are specific to individual
assets are assessed in determining the applicable discount factor.
Investments in associates
BEH EAD owns directly 0.32% of the share capital of ZAD Energy. The equity investment is accounted for as an
investment in an associate due to additional indirect participation in the capital of ZAD Energy through other
subsidiaries, resulting in a total direct and indirect equity participation of 48.08%.
Principle – assumption of a going concern
The sole shareholder of the Company is the Bulgarian State through the Minister of Energy, in their capacity as
Principal. The functioning and the future development of the Company is entirely dependent on the future intentions
and strategy of the state regarding the continuation of its functions and activities within the energy sector in Bulgaria.
The management has analysed the validity of the going concern assumption, taking into account the principal’s
intentions in the short and medium term. As a result, it has come to the conclusion that the use of the going concern
assumption is appropriate.
Revenues from contracts with customers
When recognizing revenues under contracts with customers, the management makes various estimates,
approximations and assumptions that affect the reported revenue, expense, assets and contingent liabilities. The key
estimates and assumptions that have a material impact on the amount and timing of recognizing revenue from customer
contracts are disclosed in note 4.5 Revenue Recognition, Performance obligations and approach to recognition of main
types of revenue from contracts with customers.
Assets with right to use and liabilities under lease contracts
The Company makes estimates based on its assessments concerning the identification of leasing elements in the
contracts, the likely terms of validity of the lease contracts, the extension and termination options, determining the
differential interest rate, etc., in recognizing “right-of-use assets ” and liabilities under lease contracts. Such estimates
have an effect on the reported income, expenses, assets and liabilities under lease contracts, and the respective
disclosures.
As a result of the uncertainty regarding these assumptions and estimates it is possible that changes will arise in the
balance sheet value of right-of-use assets, liabilities under lease contracts and the reported expenses and revenue due
to changes from revaluations or changes in the lease contracts.
Employee retirement benefits
The retirement benefit obligation for employees is determined by actuarial valuation. This valuation requires making
assumptions about discount rates, future salary increases, staff turnover and mortality rates. Due to the long-term
nature of employee retirement benefits, these assumptions are subject to significant uncertainty. As of 31 December
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
27
2022, the Company's liability for retirement benefits recognized in the separate statement of financial position amounts
to BGN 958 thousand (31 December 2021: BGN 913 thousand). Additional information on staff benefits at retirement
is provided in Note 30.
Useful life of property, plant and equipment and intangible assets
Financial reporting of property, plant and equipment and intangible assets includes the use of estimates for their
expected useful lives and residual values that are based on the Company’s management judgment. Information on the
useful life of property, plant and equipment is presented in note 4.11, and intangible assets – note 4.14.
Fair value of property, plant and equipment
The Company subsequently recognizes land and buildings at revalued amount using independent external appraisers’
reports to determine their fair value. Detailed information for the revaluation, valuation methods used, assumptions
and fair value estimates, is presented in note 19.
5. Dividend income
2022 2021
BGN ’000 BGN ’000
NPP Kozloduy EAD 890,304 607,905
Bulgartransgaz ЕАD - 79,601
Elektroenergien Sistemen Operator EAD 71,514 60,368
Bulgargaz EAD 57,515 14,275
ZAD Energy 45 32
Transgaz S.A. Romania 35 19
Balkangaz 2000 AD 1 -
Income from dividend-related default interest
Bulgartransgaz ЕАD - 548
1,019,414 762,748
6.Revenues from contracts with customers
2022 2021
BGN’000 BGN’000
Income from holding agreements services 2,198 802
Agent service from the sale of CO 2 emissions 410 253
Other service income - 1
2,608 1,056
In connection with the adopted policy for the purchase of greenhouse gas emission allowances, BEH EAD purchased
emission allowances of the EUA type to cover the obligations of TPP Maritsa East 2 EAD related to securing the
production activity of the plant in 2022 and 2021. The objective is to optimize the cost of carbon emissions at the
holding level by applying a competitive principle when purchasing them. As a result, the cost of the purchased
allowances is reduced by minimizing the burden of brokerage commissions. The Company has determined that it acts
as an agent in the purchase of emission allowances of the EUA type to cover the liabilities of TPP Maritsa East 2 EAD
as it acquires title to the asset only temporarily before the ownership right is transferred to the customer.
In July 2021, a framework agreement was concluded with TPP Maritsa East 2 EAD for the sale and purchase of
European greenhouse gas emissions allowances of EUA type. Under the agreement, the Company is obligated to
purchase greenhouse gas emission allowances on a regular basis upon receiving an order placed on behalf of the buyer.
The purchased allowances are transferred to the buyer's account after full payment is made.
For 2022, the allowances bought and transferred to the buyer's account amount to 13,147,914 tons (2021: 6,538,807
tons). As of 31 December 2022, the Company has purchased but not yet transferred 75,346 tons of allowances, valued
at BGN 12,645 thousand, under the account of TPP Maritsa East 2 EAD at the National Register for Trading with
Greenhouse Gas Emission Allowances (as of 31 December 2021: non-transferred allowances total 150,094 tons valued
at BGN 22,339 thousand).
In April 2021, a contract was concluded with TPP Maritsa East 2 EAD for the sale and purchase of 4,280,000 tons of
European greenhouse gas emissions allowances of EUA type. These allowances are intended for the greenhouse gas
Separate Financial Statements
31 December 2022
27
2022, the Company's liability for retirement benefits recognized in the separate statement of financial position amounts
to BGN 958 thousand (31 December 2021: BGN 913 thousand). Additional information on staff benefits at retirement
is provided in Note 30.
Useful life of property, plant and equipment and intangible assets
Financial reporting of property, plant and equipment and intangible assets includes the use of estimates for their
expected useful lives and residual values that are based on the Company’s management judgment. Information on the
useful life of property, plant and equipment is presented in note 4.11, and intangible assets – note 4.14.
Fair value of property, plant and equipment
The Company subsequently recognizes land and buildings at revalued amount using independent external appraisers’
reports to determine their fair value. Detailed information for the revaluation, valuation methods used, assumptions
and fair value estimates, is presented in note 19.
5. Dividend income
2022 2021
BGN ’000 BGN ’000
NPP Kozloduy EAD 890,304 607,905
Bulgartransgaz ЕАD - 79,601
Elektroenergien Sistemen Operator EAD 71,514 60,368
Bulgargaz EAD 57,515 14,275
ZAD Energy 45 32
Transgaz S.A. Romania 35 19
Balkangaz 2000 AD 1 -
Income from dividend-related default interest
Bulgartransgaz ЕАD - 548
1,019,414 762,748
6.Revenues from contracts with customers
2022 2021
BGN’000 BGN’000
Income from holding agreements services 2,198 802
Agent service from the sale of CO 2 emissions 410 253
Other service income - 1
2,608 1,056
In connection with the adopted policy for the purchase of greenhouse gas emission allowances, BEH EAD purchased
emission allowances of the EUA type to cover the obligations of TPP Maritsa East 2 EAD related to securing the
production activity of the plant in 2022 and 2021. The objective is to optimize the cost of carbon emissions at the
holding level by applying a competitive principle when purchasing them. As a result, the cost of the purchased
allowances is reduced by minimizing the burden of brokerage commissions. The Company has determined that it acts
as an agent in the purchase of emission allowances of the EUA type to cover the liabilities of TPP Maritsa East 2 EAD
as it acquires title to the asset only temporarily before the ownership right is transferred to the customer.
In July 2021, a framework agreement was concluded with TPP Maritsa East 2 EAD for the sale and purchase of
European greenhouse gas emissions allowances of EUA type. Under the agreement, the Company is obligated to
purchase greenhouse gas emission allowances on a regular basis upon receiving an order placed on behalf of the buyer.
The purchased allowances are transferred to the buyer's account after full payment is made.
For 2022, the allowances bought and transferred to the buyer's account amount to 13,147,914 tons (2021: 6,538,807
tons). As of 31 December 2022, the Company has purchased but not yet transferred 75,346 tons of allowances, valued
at BGN 12,645 thousand, under the account of TPP Maritsa East 2 EAD at the National Register for Trading with
Greenhouse Gas Emission Allowances (as of 31 December 2021: non-transferred allowances total 150,094 tons valued
at BGN 22,339 thousand).
In April 2021, a contract was concluded with TPP Maritsa East 2 EAD for the sale and purchase of 4,280,000 tons of
European greenhouse gas emissions allowances of EUA type. These allowances are intended for the greenhouse gas
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
28
emissions issued by the buyer in the calendar year 2020. The allowances were purchased from the holding at the
beginning of 2021.
According to holding agreements signed with Bulgargaz EAD, NEK EAD, TPP Maritsa East 2 EAD, Mini Maritsa
Iztok EAD and NPP Kozloduy EAD, BEH EAD provides billable services to its subsidiaries in the field of financial
management, project and investment management, corporate governance and business planning, legal and regulatory
issues and public relations. Revenues are calculated based on actual hours spent for the respective companies.
7.Other income
2022 2021
BGN’000 BGN’000
Residual liability upon early termination of lease contract. 173 -
Funding revenues for electricity consumed 42 6
Gain on sale of assets 8 -
Other 9 5
Interest income overdue receivables from the sale of CO2 emissions - 2,912
Interest income overdue receivables under holding agreements - 43
232 2,966
8. Expenses for impairment
2022 2021
BGN’000 BGN’000
Expenses for investment impairment (140) (143)
Impairment of expected credit losses of debt instruments at amortized cost
Impairment of loans to related parties (899,752) (60,377)
Impairment of receivables from Toplofikatsia Sofia EAD (274,459) (423,665)
Impairment of cash (4,999) (2,181)
Reversal of impairment of receivables from Toplofikatsia Sofia EAD 32,444 -
Impairment of trade receivables from related parties - (45,576)
Impairment of other receivables from related parties (2,687) (2,133)
Impairment of receivables under litigation - (3)
Reversal of impairment of loans granted to related parties 13,164 5,324
Reversal of impairment of trade receivables from related parties - 26
Reintegrated impairment of other receivables from related parties 1 627
Reintegrated impairment of receivables under litigation 3 1
Reversal of impairment of other receivables 80 752
Reversal of impairment of cash 2 290
(1,136,343) (527,058)
9. Expenses for materials
2022 2021
BGN’000 BGN’000
Office supplies and consumables (47) (42)
Car maintenance costs (122) (41)
Cost of assets below the recognition threshold (61) (16)
(230) (99)
Separate Financial Statements
31 December 2022
28
emissions issued by the buyer in the calendar year 2020. The allowances were purchased from the holding at the
beginning of 2021.
According to holding agreements signed with Bulgargaz EAD, NEK EAD, TPP Maritsa East 2 EAD, Mini Maritsa
Iztok EAD and NPP Kozloduy EAD, BEH EAD provides billable services to its subsidiaries in the field of financial
management, project and investment management, corporate governance and business planning, legal and regulatory
issues and public relations. Revenues are calculated based on actual hours spent for the respective companies.
7.Other income
2022 2021
BGN’000 BGN’000
Residual liability upon early termination of lease contract. 173 -
Funding revenues for electricity consumed 42 6
Gain on sale of assets 8 -
Other 9 5
Interest income overdue receivables from the sale of CO2 emissions - 2,912
Interest income overdue receivables under holding agreements - 43
232 2,966
8. Expenses for impairment
2022 2021
BGN’000 BGN’000
Expenses for investment impairment (140) (143)
Impairment of expected credit losses of debt instruments at amortized cost
Impairment of loans to related parties (899,752) (60,377)
Impairment of receivables from Toplofikatsia Sofia EAD (274,459) (423,665)
Impairment of cash (4,999) (2,181)
Reversal of impairment of receivables from Toplofikatsia Sofia EAD 32,444 -
Impairment of trade receivables from related parties - (45,576)
Impairment of other receivables from related parties (2,687) (2,133)
Impairment of receivables under litigation - (3)
Reversal of impairment of loans granted to related parties 13,164 5,324
Reversal of impairment of trade receivables from related parties - 26
Reintegrated impairment of other receivables from related parties 1 627
Reintegrated impairment of receivables under litigation 3 1
Reversal of impairment of other receivables 80 752
Reversal of impairment of cash 2 290
(1,136,343) (527,058)
9. Expenses for materials
2022 2021
BGN’000 BGN’000
Office supplies and consumables (47) (42)
Car maintenance costs (122) (41)
Cost of assets below the recognition threshold (61) (16)
(230) (99)
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
29
10. Hired services expenses
2022 2021
BGN’000 BGN’000
Consultancy service (3,744) (2,254)
Security (73) (67)
Heat, electricity and water (110) (61)
Insurance (87) (59)
Subscription service (71) (57)
Cleaning (35) (40)
Communications (34) (26)
Car maintenance (64) (24)
Translation services (11) (28)
Miscellaneous fees (13) (6)
Labor safety (9) (4)
Rentals (11) (3)
Repairs (78) (1)
Other (2) (1)
(4,342) (2,631)
11. Audit services remuneration
These separate financial statements have been audited by AUDIT BEH Company under the Law on Obligations and
Contracts (CULOC) with participants in the Grant Thornton OOD and Zaharinova Nexia EOOD associations on the
basis of a contract concluded between Bulgarian Energy Holding EAD and CULOC AUDIT BEH.
The remuneration of the registered auditors amounts to BGN 854 thousand and includes an independent financial
audit of the annual and interim separate financial statements of BEH EAD, NEK EAD, NPP Kozloduy EAD, TPP
Maritsa East 2 EAD, Mini Maritsa Iztok EAD, Bulgargaz EAD, NPP Kozloduy – New Build EAD, HPP Kozloduy
EAD, Interpriborservice OOD, PFC Beroe Stara Zagora EAD, and the annual and interim consolidated financial
statements of BEH EAD, NPP Kozloduy EAD and TPP Maritsa East 2 EAD. In 2022 the registered auditors have not
received other remuneration nor have provided other services.
12. Employee expenses
2022 2021
BGN’000 BGN’000
Remuneration (5,433) (3,593)
Social security (807) (698)
Social costs (1,249) (806)
Accrued retirement benefits (101) (96)
Unused annual leave and related social security expenses (202) (150)
(7,792) (5,343)
13.Other expenses
2022 2021
BGN’000 BGN’000
Donations (80) (200)
Tax credit adjustment (126) (116)
Income Taxes (44) (36)
Business trips and representative costs (121) (29)
Trainings, qualifications, seminars (75) (12)
Interest and non-deductions to counterparties (32) -
Other (2) (1)
(480) (394)
Separate Financial Statements
31 December 2022
29
10. Hired services expenses
2022 2021
BGN’000 BGN’000
Consultancy service (3,744) (2,254)
Security (73) (67)
Heat, electricity and water (110) (61)
Insurance (87) (59)
Subscription service (71) (57)
Cleaning (35) (40)
Communications (34) (26)
Car maintenance (64) (24)
Translation services (11) (28)
Miscellaneous fees (13) (6)
Labor safety (9) (4)
Rentals (11) (3)
Repairs (78) (1)
Other (2) (1)
(4,342) (2,631)
11. Audit services remuneration
These separate financial statements have been audited by AUDIT BEH Company under the Law on Obligations and
Contracts (CULOC) with participants in the Grant Thornton OOD and Zaharinova Nexia EOOD associations on the
basis of a contract concluded between Bulgarian Energy Holding EAD and CULOC AUDIT BEH.
The remuneration of the registered auditors amounts to BGN 854 thousand and includes an independent financial
audit of the annual and interim separate financial statements of BEH EAD, NEK EAD, NPP Kozloduy EAD, TPP
Maritsa East 2 EAD, Mini Maritsa Iztok EAD, Bulgargaz EAD, NPP Kozloduy – New Build EAD, HPP Kozloduy
EAD, Interpriborservice OOD, PFC Beroe Stara Zagora EAD, and the annual and interim consolidated financial
statements of BEH EAD, NPP Kozloduy EAD and TPP Maritsa East 2 EAD. In 2022 the registered auditors have not
received other remuneration nor have provided other services.
12. Employee expenses
2022 2021
BGN’000 BGN’000
Remuneration (5,433) (3,593)
Social security (807) (698)
Social costs (1,249) (806)
Accrued retirement benefits (101) (96)
Unused annual leave and related social security expenses (202) (150)
(7,792) (5,343)
13.Other expenses
2022 2021
BGN’000 BGN’000
Donations (80) (200)
Tax credit adjustment (126) (116)
Income Taxes (44) (36)
Business trips and representative costs (121) (29)
Trainings, qualifications, seminars (75) (12)
Interest and non-deductions to counterparties (32) -
Other (2) (1)
(480) (394)
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
30
14. Finance income
2022 2021
BGN’000 BGN’000
Interest income on loans granted at amortised cost 271,985 176,836
Financial revenues from initially created assets with credit impairment - loans to
related parties. 417,525 -
Finance income on loans granted at amortised cost - 4,221
Interest income on receivable from Toplofikatsia Sofia EAD 52,675 35,165
Interest income on bank current account 36 75
Total interest incomes under financial assets, which are not accounted at fair
value in the profit or loss 742,221 216,297
742,221 216,297
15. Financial costs
2022 2021
BGN’000 BGN’000
Interest expense on bond issues (71,155) (88,550)
Interest paid on loans taken from related parties (4,180) -
Interest expense – discounting of non-current receivable - (83,525)
Interest expense on a loan received (934) (314)
Lease interest expense (96) (115)
Interest expense on staff benefits in retirement (6) (4)
Total interest expense on financial liabilities not accounted for at fair value in
profit or loss (76,371) (172,508)
Loss from modification - (95)
Bank fees (3,610) (1,300)
Fees for issued bank guarantee (528) (522)
Loss on exchange rate differences, net (38) (31)
(80,547) (174,456)
16. Income tax expenses
The reconciliation between the income tax expense and the accounting profit multiplied by the applicable tax rate for
the years ending 31 December 2022 and 31 December 2021, is presented below:
2022 2021
BGN’000 BGN’000
Accounting profit before taxes 533,540 271,877
Tax rate 10% 10%
Tax expense at the applicable tax rate (53,354) (27,188)
Tax effect of:
Expenses not recognised for tax purposes (118,371) (53,578)
Non-taxable income 155,623 83,936
Tax loss deduction 3,170 -
(12,932) 3,170
Deferred tax expense, net 61,453 45,781
Income tax expense 48,521 48,951
Note 21 provides information on deferred tax assets and liabilities, including the amounts recognized in other
comprehensive income.
Separate Financial Statements
31 December 2022
30
14. Finance income
2022 2021
BGN’000 BGN’000
Interest income on loans granted at amortised cost 271,985 176,836
Financial revenues from initially created assets with credit impairment - loans to
related parties. 417,525 -
Finance income on loans granted at amortised cost - 4,221
Interest income on receivable from Toplofikatsia Sofia EAD 52,675 35,165
Interest income on bank current account 36 75
Total interest incomes under financial assets, which are not accounted at fair
value in the profit or loss 742,221 216,297
742,221 216,297
15. Financial costs
2022 2021
BGN’000 BGN’000
Interest expense on bond issues (71,155) (88,550)
Interest paid on loans taken from related parties (4,180) -
Interest expense – discounting of non-current receivable - (83,525)
Interest expense on a loan received (934) (314)
Lease interest expense (96) (115)
Interest expense on staff benefits in retirement (6) (4)
Total interest expense on financial liabilities not accounted for at fair value in
profit or loss (76,371) (172,508)
Loss from modification - (95)
Bank fees (3,610) (1,300)
Fees for issued bank guarantee (528) (522)
Loss on exchange rate differences, net (38) (31)
(80,547) (174,456)
16. Income tax expenses
The reconciliation between the income tax expense and the accounting profit multiplied by the applicable tax rate for
the years ending 31 December 2022 and 31 December 2021, is presented below:
2022 2021
BGN’000 BGN’000
Accounting profit before taxes 533,540 271,877
Tax rate 10% 10%
Tax expense at the applicable tax rate (53,354) (27,188)
Tax effect of:
Expenses not recognised for tax purposes (118,371) (53,578)
Non-taxable income 155,623 83,936
Tax loss deduction 3,170 -
(12,932) 3,170
Deferred tax expense, net 61,453 45,781
Income tax expense 48,521 48,951
Note 21 provides information on deferred tax assets and liabilities, including the amounts recognized in other
comprehensive income.
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
31
17. Earnings per share and dividends
17.1 Earnings per share
The basic earning per share is calculated using the net profit to be distributed as a numerator. The weighted average
number of shares used for the calculation of basic earnings per share and the net profit attributable to the ordinary
shareholder, are as follows:
2022 2021
Net profit attributable to the shareholders (in BGN) 582,061,152.56 320,828,238.43
Weighted average number of shares 3,462,941,744 3,462,941,744
Earnings per share (BGN per share) 0,1681 0,0926
17.2 Dividends
The distribution of profit is made pursuant to a decision of the sole shareholder of the capital, in compliance with the
following order:
• at least 10% of the profit is allocated to the Reserve Fund;
• a dividend determined on the basis of a decision of the Council of Ministers in compliance with the State
Budget Act;
• based on a proposal of the Board of Directors it is possible to allocate part of the profit, subject to distribution,
to certain funds of the Company.
In 2022, the Company paid a dividend amounting to BGN 190,711 thousand to the State budget.
18. Investments in subsidiaries, associates and joint ventures
31 December 2022 31 December 2021
Country of
incorporation Share Value of
investment Share Value of
investment
BGN’000 BGN’000
Subsidiaries
Bulgartransgaz ЕАD Bulgaria 100% 734,569 100% 734,569
Bulgargaz EAD Bulgaria 100% 325,391 100% 325,391
NEK EAD Bulgaria 100% 1,051,427 100% 1,051,427
NPP Kozloduy EAD Bulgaria 100% 101,716 100% 101,716
TPP Maritsa East 2 EAD Bulgaria 100% 673,916 100% 673,916
Mini Maritsa Iztok EAD Bulgaria 100% 65,000 100% 65,000
ESO EAD Bulgaria 100% 96,103 100% 61,103
3,048,122 3,013,122
Joint ventures
ICGB AD Bulgaria 50% 57,991 50% 57,991
South Stream Bulgaria AD 34,372 34,372
Impairment (24,029) (23,889)
South Streаm Bulgaria AD, net Bulgaria 50% 10,343 50% 10,483
68,334 68,474
Affiliated company
ZAD Energy Bulgaria 0.32% 21 0.32% 21
21 21
3,116,477 3,081,617
Separate Financial Statements
31 December 2022
31
17. Earnings per share and dividends
17.1 Earnings per share
The basic earning per share is calculated using the net profit to be distributed as a numerator. The weighted average
number of shares used for the calculation of basic earnings per share and the net profit attributable to the ordinary
shareholder, are as follows:
2022 2021
Net profit attributable to the shareholders (in BGN) 582,061,152.56 320,828,238.43
Weighted average number of shares 3,462,941,744 3,462,941,744
Earnings per share (BGN per share) 0,1681 0,0926
17.2 Dividends
The distribution of profit is made pursuant to a decision of the sole shareholder of the capital, in compliance with the
following order:
• at least 10% of the profit is allocated to the Reserve Fund;
• a dividend determined on the basis of a decision of the Council of Ministers in compliance with the State
Budget Act;
• based on a proposal of the Board of Directors it is possible to allocate part of the profit, subject to distribution,
to certain funds of the Company.
In 2022, the Company paid a dividend amounting to BGN 190,711 thousand to the State budget.
18. Investments in subsidiaries, associates and joint ventures
31 December 2022 31 December 2021
Country of
incorporation Share Value of
investment Share Value of
investment
BGN’000 BGN’000
Subsidiaries
Bulgartransgaz ЕАD Bulgaria 100% 734,569 100% 734,569
Bulgargaz EAD Bulgaria 100% 325,391 100% 325,391
NEK EAD Bulgaria 100% 1,051,427 100% 1,051,427
NPP Kozloduy EAD Bulgaria 100% 101,716 100% 101,716
TPP Maritsa East 2 EAD Bulgaria 100% 673,916 100% 673,916
Mini Maritsa Iztok EAD Bulgaria 100% 65,000 100% 65,000
ESO EAD Bulgaria 100% 96,103 100% 61,103
3,048,122 3,013,122
Joint ventures
ICGB AD Bulgaria 50% 57,991 50% 57,991
South Stream Bulgaria AD 34,372 34,372
Impairment (24,029) (23,889)
South Streаm Bulgaria AD, net Bulgaria 50% 10,343 50% 10,483
68,334 68,474
Affiliated company
ZAD Energy Bulgaria 0.32% 21 0.32% 21
21 21
3,116,477 3,081,617
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
32
Summarized financial information on associates and joint ventures
The tables contain summarized information on the basis of BEH EAD ’s associate’ and joint ventures’ financial
statements.
31 December 2022 Total assets Total
liabilities
Income Net profit
/ (loss)
BGN’000 BGN’000 BGN’000 BGN’000
ICGB AD 535,277 427,730 18,618 5,042
South Streаm Bulgaria AD (not audited data) 20,807 181 - (300)
ZAD Energy 43,417 15,389 13,805 9,230
599,501 443,300 32,423 13,972
31 December 2021 Total assets Total
liabilities
Income Net profit
/ (loss)
BGN’000 BGN’000 BGN’000 BGN’000
ICGB AD 427,668 325,163 - (5,029)
South Stream Bulgaria AD 21,092 166 79 (331)
ZAD Energy 53,106 18,843 19,073 13,741
501,866 344,172 19,152 8,381
Joint venture ICGB AD
BEH EAD is a shareholder in ICGB AD – a company with an equal interest of BEH EAD and IGI Poseidon (a
company with an equal interest of DEPA S.A. and Edison SpA), registered in 2011 in the Republic of Bulgaria,
intended to build and become an owner and operator of a gas interconnection network IGB.
In 2022, ICGB AD built the gas interconnector Greece-Bulgaria with a capacity of up to 3 billion m 3 /per year from
Komotini to Stara Zagora with a length of 182 km.
ICGB AD is licensed and certified as a transmission network operator under the model of an “ independent
transmission operator ” with a two-tier management system consisting of a Management Board and a Supervisory
Board. Since 1 October 2022, the company has been engaged in natural gas transmission through the gas
interconnector. The interconnector facilitates the transmission of all volumes of agreed Azeri gas for Bulgaria, and
ICGB AD generates revenues from providing transmission services. Currently, based on long-term transmission
contracts, the annual volume of transmission amounts to 1.5 billion m3 per year.
Joint Venture South Stream Bulgaria AD
The purpose of the South Stream project, the realization of which was terminated, was the construction of a new gas
pipeline system for transporting natural gas from Russia to the European market through Bulgaria. The technical
capacity of the Black Sea section, spanning 900 km, was planned to be 63 billion m 3 per year. The joint venture on
Bulgarian territory, which is no longer operational, had equal interest from the shareholders Bulgarian Energy Holding
EAD and Gazprom Krasnodar.
The decision to liquidate the project company is being assessed, and if approved, all remaining assets, including land
property, are to be cashed out during the liquidation process.
In 2022, an impairment charge of BGN 140 thousand was recorded based on the liquidation value (2021: BGN 143
thousand). As of 31 December 2022, the total value of accrued impairments on the investment amounted to BGN
24,029 thousand (as of 31 December 2021: BGN 23,889 thousand).
Separate Financial Statements
31 December 2022
32
Summarized financial information on associates and joint ventures
The tables contain summarized information on the basis of BEH EAD ’s associate’ and joint ventures’ financial
statements.
31 December 2022 Total assets Total
liabilities
Income Net profit
/ (loss)
BGN’000 BGN’000 BGN’000 BGN’000
ICGB AD 535,277 427,730 18,618 5,042
South Streаm Bulgaria AD (not audited data) 20,807 181 - (300)
ZAD Energy 43,417 15,389 13,805 9,230
599,501 443,300 32,423 13,972
31 December 2021 Total assets Total
liabilities
Income Net profit
/ (loss)
BGN’000 BGN’000 BGN’000 BGN’000
ICGB AD 427,668 325,163 - (5,029)
South Stream Bulgaria AD 21,092 166 79 (331)
ZAD Energy 53,106 18,843 19,073 13,741
501,866 344,172 19,152 8,381
Joint venture ICGB AD
BEH EAD is a shareholder in ICGB AD – a company with an equal interest of BEH EAD and IGI Poseidon (a
company with an equal interest of DEPA S.A. and Edison SpA), registered in 2011 in the Republic of Bulgaria,
intended to build and become an owner and operator of a gas interconnection network IGB.
In 2022, ICGB AD built the gas interconnector Greece-Bulgaria with a capacity of up to 3 billion m 3 /per year from
Komotini to Stara Zagora with a length of 182 km.
ICGB AD is licensed and certified as a transmission network operator under the model of an “ independent
transmission operator ” with a two-tier management system consisting of a Management Board and a Supervisory
Board. Since 1 October 2022, the company has been engaged in natural gas transmission through the gas
interconnector. The interconnector facilitates the transmission of all volumes of agreed Azeri gas for Bulgaria, and
ICGB AD generates revenues from providing transmission services. Currently, based on long-term transmission
contracts, the annual volume of transmission amounts to 1.5 billion m3 per year.
Joint Venture South Stream Bulgaria AD
The purpose of the South Stream project, the realization of which was terminated, was the construction of a new gas
pipeline system for transporting natural gas from Russia to the European market through Bulgaria. The technical
capacity of the Black Sea section, spanning 900 km, was planned to be 63 billion m 3 per year. The joint venture on
Bulgarian territory, which is no longer operational, had equal interest from the shareholders Bulgarian Energy Holding
EAD and Gazprom Krasnodar.
The decision to liquidate the project company is being assessed, and if approved, all remaining assets, including land
property, are to be cashed out during the liquidation process.
In 2022, an impairment charge of BGN 140 thousand was recorded based on the liquidation value (2021: BGN 143
thousand). As of 31 December 2022, the total value of accrued impairments on the investment amounted to BGN
24,029 thousand (as of 31 December 2021: BGN 23,889 thousand).
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
33
19. Property, plant and equipment
For the year as of 31 December
2022
Land and
buildings
Property,
plant and
equipment
Vehicles
Equipment
and other
assets
Rights-of-
use assets Total
BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
Gross carrying amount
Balance as of 1 January 2022 2,160 30 1,198 892 3,820 8,100
Newly acquired assets 4,738 8 - 91 487 5,324
Written-off assets - - (73) (18) (3,597) (3,688)
Balance as of 31 December 2022 6,898 38 1,125 965 710 9,736
Depreciation
Balance as of 1 January 2022 - (4) (1,152) (670) (774) (2,600)
Annual depreciation quota (24) (8) (21) (101) (259) (413)
Derecognized depreciation - - 73 16 815 904
Balance as of 31 December 2022 (24) (12) (1,100) (755) (218) (2,109)
Carrying amount
as of 31 December 2022 6,874 26 25 210 492 7,627
For the year as of 31 December
2021
Land and
buildings
Property,
plant and
equipment
Vehicles
Equipment
and other
assets
Rights-of-
use assets Total
BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
Gross carrying amount
Balance as of 1 January 2021 2,026 44 1,198 878 3,820 7,966
Newly acquired assets - - - 19 - 19
Written-off assets - (16) - (5) - (21)
Revaluation 134 2 - - - 136
Balance as of 31 December 2021 2,160 30 1,198 892 3,820 8,100
Depreciation
Balance as of 1 January 2021 - (13) (1,114) (577) (506) (2,210)
Annual depreciation quota - (7) (38) (105) (268) (418)
Derecognized depreciation - - - 12 - 12
Revaluation - 16 - - - 16
Balance as of 31 December 2021 - (4) (1,152) (670) (774) (2,600)
Carrying amount
as of 31 December 2021 2,160 26 46 222 3,046 5,500
Revaluation of property, plant and equipment
Under the Company’s accounting policy, property, plant and equipment is revalued every 3 years or at shorter periods .
The last revaluation of the balance sheet value of property, machinery and equipment was carried out at 31 December
2021.
The revaluation of property, plant and equipment for subsequent revaluation is carried out by an independent licensed
appraiser in accordance with the Bulgarian Valuation Standards, the Accounting Act, IAS 16 Property, Plant and
Equipment and IFRS 13 Fair Value Measurement. As a result of the revaluation made, the revaluation reserve was
increased by BGN 136 thousand.
The Company has reviewed the tangible assets for impairment indications as at 31 December 2022. No indications
were found to the effect that the carrying amount of the assets exceeds their recoverable amount, furthermore there is
no need to make changes in the residual useful life of the assets. As a result, no impairment loss is recognized in the
separate financial statements.
Separate Financial Statements
31 December 2022
33
19. Property, plant and equipment
For the year as of 31 December
2022
Land and
buildings
Property,
plant and
equipment
Vehicles
Equipment
and other
assets
Rights-of-
use assets Total
BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
Gross carrying amount
Balance as of 1 January 2022 2,160 30 1,198 892 3,820 8,100
Newly acquired assets 4,738 8 - 91 487 5,324
Written-off assets - - (73) (18) (3,597) (3,688)
Balance as of 31 December 2022 6,898 38 1,125 965 710 9,736
Depreciation
Balance as of 1 January 2022 - (4) (1,152) (670) (774) (2,600)
Annual depreciation quota (24) (8) (21) (101) (259) (413)
Derecognized depreciation - - 73 16 815 904
Balance as of 31 December 2022 (24) (12) (1,100) (755) (218) (2,109)
Carrying amount
as of 31 December 2022 6,874 26 25 210 492 7,627
For the year as of 31 December
2021
Land and
buildings
Property,
plant and
equipment
Vehicles
Equipment
and other
assets
Rights-of-
use assets Total
BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
Gross carrying amount
Balance as of 1 January 2021 2,026 44 1,198 878 3,820 7,966
Newly acquired assets - - - 19 - 19
Written-off assets - (16) - (5) - (21)
Revaluation 134 2 - - - 136
Balance as of 31 December 2021 2,160 30 1,198 892 3,820 8,100
Depreciation
Balance as of 1 January 2021 - (13) (1,114) (577) (506) (2,210)
Annual depreciation quota - (7) (38) (105) (268) (418)
Derecognized depreciation - - - 12 - 12
Revaluation - 16 - - - 16
Balance as of 31 December 2021 - (4) (1,152) (670) (774) (2,600)
Carrying amount
as of 31 December 2021 2,160 26 46 222 3,046 5,500
Revaluation of property, plant and equipment
Under the Company’s accounting policy, property, plant and equipment is revalued every 3 years or at shorter periods .
The last revaluation of the balance sheet value of property, machinery and equipment was carried out at 31 December
2021.
The revaluation of property, plant and equipment for subsequent revaluation is carried out by an independent licensed
appraiser in accordance with the Bulgarian Valuation Standards, the Accounting Act, IAS 16 Property, Plant and
Equipment and IFRS 13 Fair Value Measurement. As a result of the revaluation made, the revaluation reserve was
increased by BGN 136 thousand.
The Company has reviewed the tangible assets for impairment indications as at 31 December 2022. No indications
were found to the effect that the carrying amount of the assets exceeds their recoverable amount, furthermore there is
no need to make changes in the residual useful life of the assets. As a result, no impairment loss is recognized in the
separate financial statements.
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
34
Right-of-use assets
On 1 January 2019, the Company has recognized an right-of-use asset in the amount of BGN 3,597 thousand under a
contract from 2015 with NPP Kozloduy EAD, to rent an administrative building for a period of ten years, with the
tenant being in a position to go on using the building also after such period. To determine the present value of the
lease liability, Bulgarian Energy Holding EAD has used a discount rate of 3.50%, which is an interest rate obtained
by the Company in financing its activity in the year of execution of the lease contract. The asset is obtained from
Bulgarian Energy Holding EAD with a sales contract concluded on 11 October 2022 and the lease contract was
terminated. The Company reports revenue from the termination of a lease contract in the amount of BGN 173
thousand.
On 1 August 2019, the Company has recognized right-of-use assets in the amount of BGN 152 thousand under a
contract for the operating lease of 3 motor vehicles for a period of four years. The present value of the lease liability
is the market value of the vehicle at the time of the lease contract conclusion in a direct sale from the same supplier,
with no financing. The calculated interest rate for the leasing of two of the vehicles is 1.31%, and for the third vehicle
it is 2.27%.
On 31 July 2019, the Company has recognized as an right-of-use asset in the amount of BGN 71 thousand – resources
in a cloud environment for a five year period. The entire contractual amount was paid at the beginning of the contract.
To determine the present value of the lease liability, Bulgarian Energy Holding EAD has used a discount rate of
3.50%, which is an interest rate obtained by the Company in financing its own activities in the last year, and
corresponding to the market levels.
On 10 May 2022, the Company has recognized right-of-use assets in the amount of BGN 36 thousand under an
operating lease contract for a vehicle, for a period of two years. The current value of the lease liability is the market
value of the vehicle at the time of the conclusion of the lease contract in a direct sale from the same supplier with no
financing. The calculated interest rate for the vehicle lease is 2.0039%.
On 1 May 2022, the Company has recognized right-of-use assets in the amount of BGN 459 thousand under a rental
contract of a real estate for administrative purposes for a period of five years with an option for extension. To determine
the present value of the lease liability, Bulgarian Energy Holding EAD has used a discount rate of 2.45%, which is an
interest rate obtained by the Company in financing its own activities in the last year and corresponding to the market
levels.
As of 31 December 2022 and 31 December 2021, the Company had no commitments assumed to buy property, plant
and equipment, and had not provided collaterals related to them.
All amortization costs are included in the profit or loss statement under “Amortization costs of non - financial assets” .
20. Intangible assets
For the year as of
31 December 2022 Software Patents and
licenses Other Acquisition
costs Total
BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
Gross carrying amount
Balance as of 1 January 2022 338 67 - 195 600
Newly acquired assets - 1 4 - 5
Balance at 31 December 2022 338 68 4 195 605
Depreciation
Balance as of 1 January 2022 (255) (46) - - (301)
Annual amortization quota (28) (5) (1) - (34)
Balance as of 31 December 2022 (283) (51) (1) - (335)
Carrying amount
as of 31 December 2022 55 17 3 195 270
Separate Financial Statements
31 December 2022
34
Right-of-use assets
On 1 January 2019, the Company has recognized an right-of-use asset in the amount of BGN 3,597 thousand under a
contract from 2015 with NPP Kozloduy EAD, to rent an administrative building for a period of ten years, with the
tenant being in a position to go on using the building also after such period. To determine the present value of the
lease liability, Bulgarian Energy Holding EAD has used a discount rate of 3.50%, which is an interest rate obtained
by the Company in financing its activity in the year of execution of the lease contract. The asset is obtained from
Bulgarian Energy Holding EAD with a sales contract concluded on 11 October 2022 and the lease contract was
terminated. The Company reports revenue from the termination of a lease contract in the amount of BGN 173
thousand.
On 1 August 2019, the Company has recognized right-of-use assets in the amount of BGN 152 thousand under a
contract for the operating lease of 3 motor vehicles for a period of four years. The present value of the lease liability
is the market value of the vehicle at the time of the lease contract conclusion in a direct sale from the same supplier,
with no financing. The calculated interest rate for the leasing of two of the vehicles is 1.31%, and for the third vehicle
it is 2.27%.
On 31 July 2019, the Company has recognized as an right-of-use asset in the amount of BGN 71 thousand – resources
in a cloud environment for a five year period. The entire contractual amount was paid at the beginning of the contract.
To determine the present value of the lease liability, Bulgarian Energy Holding EAD has used a discount rate of
3.50%, which is an interest rate obtained by the Company in financing its own activities in the last year, and
corresponding to the market levels.
On 10 May 2022, the Company has recognized right-of-use assets in the amount of BGN 36 thousand under an
operating lease contract for a vehicle, for a period of two years. The current value of the lease liability is the market
value of the vehicle at the time of the conclusion of the lease contract in a direct sale from the same supplier with no
financing. The calculated interest rate for the vehicle lease is 2.0039%.
On 1 May 2022, the Company has recognized right-of-use assets in the amount of BGN 459 thousand under a rental
contract of a real estate for administrative purposes for a period of five years with an option for extension. To determine
the present value of the lease liability, Bulgarian Energy Holding EAD has used a discount rate of 2.45%, which is an
interest rate obtained by the Company in financing its own activities in the last year and corresponding to the market
levels.
As of 31 December 2022 and 31 December 2021, the Company had no commitments assumed to buy property, plant
and equipment, and had not provided collaterals related to them.
All amortization costs are included in the profit or loss statement under “Amortization costs of non - financial assets” .
20. Intangible assets
For the year as of
31 December 2022 Software Patents and
licenses Other Acquisition
costs Total
BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
Gross carrying amount
Balance as of 1 January 2022 338 67 - 195 600
Newly acquired assets - 1 4 - 5
Balance at 31 December 2022 338 68 4 195 605
Depreciation
Balance as of 1 January 2022 (255) (46) - - (301)
Annual amortization quota (28) (5) (1) - (34)
Balance as of 31 December 2022 (283) (51) (1) - (335)
Carrying amount
as of 31 December 2022 55 17 3 195 270
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
35
For the year as of
31 December 2021 Software Patents and
licenses
Acquisition
costs Total
BGN’000 BGN’000 BGN’000 BGN’000
Gross carrying amount
Balance as of 1 January 2021 310 67 195 572
Newly acquired assets 30 - - 30
Derecognized assets (2) - - (2)
Balance as of 31 December 2021 338 67 195 600
Depreciation
Balance as of 1 January 2021 (225) (41) - (266)
Annual amortization quota (32) (5) - (37)
Derecognized assets 2 - - 2
Balance as at 31 December 2021 (255) (46) - (301)
Carrying amount
as of 31 December 2021 83 21 195 299
Impairment of intangible assets
The Company has reviewed the tangible assets for impairment indications as at 31 December 2022. No indications
were found to the effect that the carrying amount of the assets exceeds their recoverable amount, furthermore there is
no need to make changes in the residual useful life of the assets. As a result, no impairment loss is recognized in the
separate financial statements.
All amortization costs are included in the profit or loss statement under “Amortization costs of non - financial assets”.
As of 31 December 2022 and on 31 December 2021, the Company had no commitments assumed to buy intangible
assets, and had not provided collaterals related to them.
21. Deferred tax assets
Deferred tax assets / (liabilities)
1 January
2022
Recognized
in profit or
loss
Recognized
in other
comprehensi
ve income
31 December
2022
BGN’000 BGN’000 BGN’000 BGN’000
Property, plant and equipment (110) 7 - (103)
Impairment of debt instruments at amortized cost 165,351 64,586 - 229,937
Investments 2,388 14 - 2,402
Pension and other liabilities to employees 92 11 (6) 97
Unused employee leaves 18 5 - 23
Financial assets at fair value through other
comprehensive income 10 - (9) 1
Tax loss carried forward 3,170 (3,170) - -
170,919 61,453 (15) 232,357
Recognized as:
Deferred tax assets 171,029 232,460
Deferred tax liabilities (110) (103)
Net deferred tax assets 170,919 232,357
Separate Financial Statements
31 December 2022
35
For the year as of
31 December 2021 Software Patents and
licenses
Acquisition
costs Total
BGN’000 BGN’000 BGN’000 BGN’000
Gross carrying amount
Balance as of 1 January 2021 310 67 195 572
Newly acquired assets 30 - - 30
Derecognized assets (2) - - (2)
Balance as of 31 December 2021 338 67 195 600
Depreciation
Balance as of 1 January 2021 (225) (41) - (266)
Annual amortization quota (32) (5) - (37)
Derecognized assets 2 - - 2
Balance as at 31 December 2021 (255) (46) - (301)
Carrying amount
as of 31 December 2021 83 21 195 299
Impairment of intangible assets
The Company has reviewed the tangible assets for impairment indications as at 31 December 2022. No indications
were found to the effect that the carrying amount of the assets exceeds their recoverable amount, furthermore there is
no need to make changes in the residual useful life of the assets. As a result, no impairment loss is recognized in the
separate financial statements.
All amortization costs are included in the profit or loss statement under “Amortization costs of non - financial assets”.
As of 31 December 2022 and on 31 December 2021, the Company had no commitments assumed to buy intangible
assets, and had not provided collaterals related to them.
21. Deferred tax assets
Deferred tax assets / (liabilities)
1 January
2022
Recognized
in profit or
loss
Recognized
in other
comprehensi
ve income
31 December
2022
BGN’000 BGN’000 BGN’000 BGN’000
Property, plant and equipment (110) 7 - (103)
Impairment of debt instruments at amortized cost 165,351 64,586 - 229,937
Investments 2,388 14 - 2,402
Pension and other liabilities to employees 92 11 (6) 97
Unused employee leaves 18 5 - 23
Financial assets at fair value through other
comprehensive income 10 - (9) 1
Tax loss carried forward 3,170 (3,170) - -
170,919 61,453 (15) 232,357
Recognized as:
Deferred tax assets 171,029 232,460
Deferred tax liabilities (110) (103)
Net deferred tax assets 170,919 232,357
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
36
Deferred tax assets / (liabilities)
1 January
2021
Recognized
in profit or
loss
Recognized
in other
comprehen
sive income
31 December
2021
BGN’000 BGN’000 BGN’000 BGN’000
Property, plant and equipment (101) 5 (14) (110)
Impairment of debt instruments at amortized cost 119,589 45,762 - 165,351
Investments 2,374 14 - 2,388
Pension and other liabilities to employees 82 7 3 92
Unused employee leaves 25 (7) - 18
Financial assets at fair value through other
comprehensive income (3) - 13 10
Tax loss carryover - 3,170 - 3,170
121,966 48,951 2 170,919
Recognized as:
Deferred tax assets 122,070 171,029
Deferred tax liabilities (104) (110)
Net deferred tax assets 121,966 170,919
Deferred tax assets and liabilities are recognized in the separate statement for the financial position, except for a
deferred tax asset in the amount of BGN 6 thousand relating to accounted reported costs under lease contracts.
22.Trade and other receivables
31 December
2022
31 December
2021
BGN’000 BGN’000
Non-current receivables
Advances paid and prepaid expenses 12 1
12 1
Current receivables
Receivables under litigation 5 8
Impairment of receivables under litigation (5) (8)
Receivables under litigation, net - -
Advances paid and prepaid expenses 45,058 49,616
State budget receivables 110 142
Other receivables 10,965 11,041
Impairment of other receivables (10,951) (11,030)
Other receivables, net 14 11
45,182 49,769
45,194 49,770
As of 31 December 2022, the Company has paid advances to suppliers of greenhouse gas emission allowances in the
amount of BGN 44,827 thousand, (31 December 2021: BGN 49,411 thousand) (Note 6).
23.Receivables from Toplofikatsia Sofia EAD
Agreement dated 11 December 2015
On 11 December 2015, between Bulgarian Energy Holding EAD and Toplofikatsia Sofia EAD a contract was signed
according to which the payables of the district heating plant to Bulgarian Energy Holding EAD are merged and
novated. The debtor acknowledges fully and unconditionally liabilities in the amount of BGN 500,465 thousand,
which are to be paid for a period of twenty years, with a five-year grace period and interest accrued on the principal
amount at the rate of 3.25%. The contract provides that upon the conclusion of a concession contract between Sofia
Municipality and a third party, the third party undertakes to effect to BEH EAD an initial payment of not less than
BGN 200,000 thousand, within 120 days from the date when the concession contract enters into force, and the
remainder will be paid in a way agreed by the parties.
Separate Financial Statements
31 December 2022
36
Deferred tax assets / (liabilities)
1 January
2021
Recognized
in profit or
loss
Recognized
in other
comprehen
sive income
31 December
2021
BGN’000 BGN’000 BGN’000 BGN’000
Property, plant and equipment (101) 5 (14) (110)
Impairment of debt instruments at amortized cost 119,589 45,762 - 165,351
Investments 2,374 14 - 2,388
Pension and other liabilities to employees 82 7 3 92
Unused employee leaves 25 (7) - 18
Financial assets at fair value through other
comprehensive income (3) - 13 10
Tax loss carryover - 3,170 - 3,170
121,966 48,951 2 170,919
Recognized as:
Deferred tax assets 122,070 171,029
Deferred tax liabilities (104) (110)
Net deferred tax assets 121,966 170,919
Deferred tax assets and liabilities are recognized in the separate statement for the financial position, except for a
deferred tax asset in the amount of BGN 6 thousand relating to accounted reported costs under lease contracts.
22.Trade and other receivables
31 December
2022
31 December
2021
BGN’000 BGN’000
Non-current receivables
Advances paid and prepaid expenses 12 1
12 1
Current receivables
Receivables under litigation 5 8
Impairment of receivables under litigation (5) (8)
Receivables under litigation, net - -
Advances paid and prepaid expenses 45,058 49,616
State budget receivables 110 142
Other receivables 10,965 11,041
Impairment of other receivables (10,951) (11,030)
Other receivables, net 14 11
45,182 49,769
45,194 49,770
As of 31 December 2022, the Company has paid advances to suppliers of greenhouse gas emission allowances in the
amount of BGN 44,827 thousand, (31 December 2021: BGN 49,411 thousand) (Note 6).
23.Receivables from Toplofikatsia Sofia EAD
Agreement dated 11 December 2015
On 11 December 2015, between Bulgarian Energy Holding EAD and Toplofikatsia Sofia EAD a contract was signed
according to which the payables of the district heating plant to Bulgarian Energy Holding EAD are merged and
novated. The debtor acknowledges fully and unconditionally liabilities in the amount of BGN 500,465 thousand,
which are to be paid for a period of twenty years, with a five-year grace period and interest accrued on the principal
amount at the rate of 3.25%. The contract provides that upon the conclusion of a concession contract between Sofia
Municipality and a third party, the third party undertakes to effect to BEH EAD an initial payment of not less than
BGN 200,000 thousand, within 120 days from the date when the concession contract enters into force, and the
remainder will be paid in a way agreed by the parties.
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
37
Liabilities amounting to BGN 52,311 thousand were challenged by the debtor in 2015 by the submission of six claims.
In 2019 court proceedings were closed, and receivables in the amount of BGN 3,339 thousand were recognized. The
due amounts were settled by Toplofikatsia Sofia EAD in accordance with the agreement of 2020. For the unrecognized
liabilities amounting to BGN 48,972 thousand, the Company has recognized an impairment in full.
As of 31 December 2022, the total amount of the recognized receivable under an agreement dated 11 December 2015
is BGN 480,476 thousand, including due amounts passed their maturity date amounting to BGN 45,308 thousand and
interest for delay amounting to BGN 649 thousand.
Agreement dated 1 April 2019
A contract was concluded with Bulgargaz EAD on 28 August 2018 for the transfer of receivables from Toplofikatsia
Sofia EAD for consumed natural gas in the total amount on the date of contract conclusion, of BGN 99,193 thousand,
including a principal amounting to BGN 94,967 thousand and an interest amounting to BGN 4,226 thousand. The
receivables are fully overdue. An agreement was concluded with Toplofikatsia Sofia EAD on 1 April 2019, whereby
the debtor agreed that the debt would be paid by the debtor by 31 August 2025, and it would not pay principal
installments until 31 August 2019. The stipulated interest on the principal is at the rate of 4.66%, as of 28 August
2018. At a failure to pay any installment, an interest is due from the debtor for every day of default to the extent of
the base interest rate, fixed by the Bulgarian National Bank, plus a 10-point margin. The obligations under the
agreement are regularly served, according to the repayment schedule.
As of 31 December 2022, the total amount of the receivable under the agreement dated 1 April 2019 amounts to BGN
63,807 thousand, including amounts passed their maturity date in the amount of BGN 19,464 thousand and interests
for delay in the amount of BGN 257 thousand.
Agreement dated 15 September 2022
On 15 September 2022, an agreement was signed with “ Toplofikatsia Sofia ” EAD, uniting obligations under
assignment agreements dated 23 December 2020, 28 October 2021, and 18 November 2021, with total amount of
BGN 333,596,905.98. The agreement became effective after approval by the Sofia Municipal Council obtained on 16
December 2022. The parties agreed that the due amount would be paid by the creditors until 31 March 2029 in monthly
installments with a grace period for the principal amount until 31 March 2023. The agreed interest on the principal
amounts to 3.525%. To secure the implementation of the obligations, the debtor has established a special pledge in
favor of the creditor covering all present, future, and conditional receivables of the debtor in bank accounts opened at
commercial banks on the territory of the Republic of Bulgaria and under contracts for the sale of energy to Independent
Bulgarian Energy Exchange EAD.
As of 31 December 2022, the total amount of the receivable under the agreement dated 15 September 2022 amounts
to BGN 342,435 thousand, including amounts due passed their maturity date in the amount of BGN 8,819 thousand
and interests for delay in the amount of BGN 18 thousand.
The receivables as of 31 December 2022 are as follows:
2022 2021
BGN’000 BGN’000
Balance as of 1 January
Gross Receivables Amount 886,718 934,248
Impairment (840,426) (647,073)
Net receivables amount 46,292 287,175
24.Financial assets at fair value through other comprehensive income
Investment in shares of TRANSGAZ S.A., Romania
On 17 December 2007, Bulgarian Energy Holding EAD participated in the initial public offering of securities of
TRANSGAZ S.A., Romania, from an increase in the company’s capital by acquiring 6,041 shares. The fair value of
this investment as of 31 December 2022 is BGN 654 thousand (31 December 2021: BGN 566 thousand) and is
determined on the basis of published quotations of prices on an active market as of 30 December 2022. All effects of
revaluation of the investment for 2022 are reported in the reserve for revaluation of financial assets at fair value
through other comprehensive income.
In 2022 a dividend of BGN 35 thousand was received (for 2021: BGN 19 thousand).
Separate Financial Statements
31 December 2022
37
Liabilities amounting to BGN 52,311 thousand were challenged by the debtor in 2015 by the submission of six claims.
In 2019 court proceedings were closed, and receivables in the amount of BGN 3,339 thousand were recognized. The
due amounts were settled by Toplofikatsia Sofia EAD in accordance with the agreement of 2020. For the unrecognized
liabilities amounting to BGN 48,972 thousand, the Company has recognized an impairment in full.
As of 31 December 2022, the total amount of the recognized receivable under an agreement dated 11 December 2015
is BGN 480,476 thousand, including due amounts passed their maturity date amounting to BGN 45,308 thousand and
interest for delay amounting to BGN 649 thousand.
Agreement dated 1 April 2019
A contract was concluded with Bulgargaz EAD on 28 August 2018 for the transfer of receivables from Toplofikatsia
Sofia EAD for consumed natural gas in the total amount on the date of contract conclusion, of BGN 99,193 thousand,
including a principal amounting to BGN 94,967 thousand and an interest amounting to BGN 4,226 thousand. The
receivables are fully overdue. An agreement was concluded with Toplofikatsia Sofia EAD on 1 April 2019, whereby
the debtor agreed that the debt would be paid by the debtor by 31 August 2025, and it would not pay principal
installments until 31 August 2019. The stipulated interest on the principal is at the rate of 4.66%, as of 28 August
2018. At a failure to pay any installment, an interest is due from the debtor for every day of default to the extent of
the base interest rate, fixed by the Bulgarian National Bank, plus a 10-point margin. The obligations under the
agreement are regularly served, according to the repayment schedule.
As of 31 December 2022, the total amount of the receivable under the agreement dated 1 April 2019 amounts to BGN
63,807 thousand, including amounts passed their maturity date in the amount of BGN 19,464 thousand and interests
for delay in the amount of BGN 257 thousand.
Agreement dated 15 September 2022
On 15 September 2022, an agreement was signed with “ Toplofikatsia Sofia ” EAD, uniting obligations under
assignment agreements dated 23 December 2020, 28 October 2021, and 18 November 2021, with total amount of
BGN 333,596,905.98. The agreement became effective after approval by the Sofia Municipal Council obtained on 16
December 2022. The parties agreed that the due amount would be paid by the creditors until 31 March 2029 in monthly
installments with a grace period for the principal amount until 31 March 2023. The agreed interest on the principal
amounts to 3.525%. To secure the implementation of the obligations, the debtor has established a special pledge in
favor of the creditor covering all present, future, and conditional receivables of the debtor in bank accounts opened at
commercial banks on the territory of the Republic of Bulgaria and under contracts for the sale of energy to Independent
Bulgarian Energy Exchange EAD.
As of 31 December 2022, the total amount of the receivable under the agreement dated 15 September 2022 amounts
to BGN 342,435 thousand, including amounts due passed their maturity date in the amount of BGN 8,819 thousand
and interests for delay in the amount of BGN 18 thousand.
The receivables as of 31 December 2022 are as follows:
2022 2021
BGN’000 BGN’000
Balance as of 1 January
Gross Receivables Amount 886,718 934,248
Impairment (840,426) (647,073)
Net receivables amount 46,292 287,175
24.Financial assets at fair value through other comprehensive income
Investment in shares of TRANSGAZ S.A., Romania
On 17 December 2007, Bulgarian Energy Holding EAD participated in the initial public offering of securities of
TRANSGAZ S.A., Romania, from an increase in the company’s capital by acquiring 6,041 shares. The fair value of
this investment as of 31 December 2022 is BGN 654 thousand (31 December 2021: BGN 566 thousand) and is
determined on the basis of published quotations of prices on an active market as of 30 December 2022. All effects of
revaluation of the investment for 2022 are reported in the reserve for revaluation of financial assets at fair value
through other comprehensive income.
In 2022 a dividend of BGN 35 thousand was received (for 2021: BGN 19 thousand).
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
38
Investment in shares of Balkangaz 2000 AD, Botevgrad
The Company holds 10,000 registered shares in “ Balkangaz 2000 ” AD, Botevgrad, with nominal value of BGN 1
(one) each. The company has a subscribed and paid-in capital in the amount of BGN 903 thousand. Bulgarian Energy
Holding EAD (previously, Bulgargaz EAD) is a shareholder since the incorporation of the company in 2000. The
investment of Bulgarian Energy Holding EAD in Balkangaz 2000 AD was impaired and derecognized from the
financial statements prepared prior to 2007 due to the company’ s deteriorated financial position.
The fair value of this investment as at 31 December 2022 is BGN 2 thousand (31 December 2021: BGN 2 thousand)
and is determined in accordance with IFRS 13 using the third level of fair value hierarchy. This is the situation where
there is no active market for similar assets and valuation methods based on significant observable information are
used. A model prepared by GTFZP was used to determine the fair value of assets of companies which are not traded
on an active market, applying the relevant reference values. All effects of the impairment of the 2022 investment are
reported in a reserve from revaluation of financial assets at fair value through other comprehensive income.
In 2022 a dividend in the amount of BGN 983.78 was received (for 2021: BGN 441.15).
25. Cash and cash equivalents
31 December
2022
31 December
2021
BGN’000 BGN’000
Cash in bank accounts 2,297,027 732,429
Cash in hand 18 14
2,297,045 732,443
Effect of expected credit losses (7,428) (2,432)
2,289,617 730,011
The cash at bank accounts, where the Company has concluded bank service contracts following a procedure for the
selection of credit institutions, accumulate interest at interest rates determined according to price offers by the credit
institutions.
As of 31 December, cash is allocated in the following currencies:
31 December
2022
31 December
2021
BGN’000 BGN’000
BGN 2,269,731 704,556
EUR 27,049 27,664
USD 177 168
Other 88 55
2,297,045 732,443
26.Target contributions under Art. 36b, para. 1, item 4 of the Energy Act
The Act amending and supplementing the State Budget Act for 2022 requires companies that produce electicity within
the BEH Group to make target contributions to the Security of Electricity System Fund (SESF) These payments are
intended to provide compensation to non-household consumers of electicity. According to art. 24, para. 2 of the Act,
the amount of the contributions is determined by the Council of Ministers based on a proposal from the Minister of
Energy. The determination takes into account the full cost of the generated electicity, the funds required for
investments and repairs (excl. VAT), the guarantee of long-term operation of production capacities, and the provision
of an economically justified rate of return of the capital.
According to Decision No. 534 of the Council of Ministers, dated 29 July 2022, a program was approved for
compensating non-household end consumers of electicity and electricity transmission operator and distribution
networks companies for the purchase of electicity used for technological costs. This compensation program covers
the period from 1 July 2022 to 30 September 2022.
Furthermore, with Decision No. 710 of the Council of Ministers, dated 29 September 2022, a program was approved
for compensating non-household end consumers of electicity and electricity transmission operator and distribution
Separate Financial Statements
31 December 2022
38
Investment in shares of Balkangaz 2000 AD, Botevgrad
The Company holds 10,000 registered shares in “ Balkangaz 2000 ” AD, Botevgrad, with nominal value of BGN 1
(one) each. The company has a subscribed and paid-in capital in the amount of BGN 903 thousand. Bulgarian Energy
Holding EAD (previously, Bulgargaz EAD) is a shareholder since the incorporation of the company in 2000. The
investment of Bulgarian Energy Holding EAD in Balkangaz 2000 AD was impaired and derecognized from the
financial statements prepared prior to 2007 due to the company’ s deteriorated financial position.
The fair value of this investment as at 31 December 2022 is BGN 2 thousand (31 December 2021: BGN 2 thousand)
and is determined in accordance with IFRS 13 using the third level of fair value hierarchy. This is the situation where
there is no active market for similar assets and valuation methods based on significant observable information are
used. A model prepared by GTFZP was used to determine the fair value of assets of companies which are not traded
on an active market, applying the relevant reference values. All effects of the impairment of the 2022 investment are
reported in a reserve from revaluation of financial assets at fair value through other comprehensive income.
In 2022 a dividend in the amount of BGN 983.78 was received (for 2021: BGN 441.15).
25. Cash and cash equivalents
31 December
2022
31 December
2021
BGN’000 BGN’000
Cash in bank accounts 2,297,027 732,429
Cash in hand 18 14
2,297,045 732,443
Effect of expected credit losses (7,428) (2,432)
2,289,617 730,011
The cash at bank accounts, where the Company has concluded bank service contracts following a procedure for the
selection of credit institutions, accumulate interest at interest rates determined according to price offers by the credit
institutions.
As of 31 December, cash is allocated in the following currencies:
31 December
2022
31 December
2021
BGN’000 BGN’000
BGN 2,269,731 704,556
EUR 27,049 27,664
USD 177 168
Other 88 55
2,297,045 732,443
26.Target contributions under Art. 36b, para. 1, item 4 of the Energy Act
The Act amending and supplementing the State Budget Act for 2022 requires companies that produce electicity within
the BEH Group to make target contributions to the Security of Electricity System Fund (SESF) These payments are
intended to provide compensation to non-household consumers of electicity. According to art. 24, para. 2 of the Act,
the amount of the contributions is determined by the Council of Ministers based on a proposal from the Minister of
Energy. The determination takes into account the full cost of the generated electicity, the funds required for
investments and repairs (excl. VAT), the guarantee of long-term operation of production capacities, and the provision
of an economically justified rate of return of the capital.
According to Decision No. 534 of the Council of Ministers, dated 29 July 2022, a program was approved for
compensating non-household end consumers of electicity and electricity transmission operator and distribution
networks companies for the purchase of electicity used for technological costs. This compensation program covers
the period from 1 July 2022 to 30 September 2022.
Furthermore, with Decision No. 710 of the Council of Ministers, dated 29 September 2022, a program was approved
for compensating non-household end consumers of electicity and electricity transmission operator and distribution
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
39
networks companies for the purchase of electicity used for technological costs for the period from 1 October 2022 to
31 December 2022. The funds for this program are provided through the target cotributions, which are required to be
paid by public enterprises in the energy sector that have 100% state-owned capital, as defined in art. 2, para. 1 of the
Public Enterprises Act. The payment of these contributions is made to the Security of Electricity System Fund, in
accordance with a decision adopted by the Council of Ministers based on §24 of the T CP (Transitional and Closing
Provisions) of the AASSBARB (Act Amending and Supplementing the State Budget Act) for 2022, defined by a
Mechanism included as an annex to the Program or solely affecting the enterprises in the BEH Group that produce
electricity.
As a result, in 2022, Bulgarian Energy Holding EAD made target contributuons in the Security of Electricity System
Fund amounting to BGN 3,181,011 thousand, as mandated by the decisions of the Council of Ministers. The required
funds were provided by NPP Kozloduy EAD – a producer of electricity.
27.Share capital and reserves
27.1 Share capital
The registered capital of the Company consists of 3,462,941,744 ordinary shares with a nominal value of BGN 1 each
as of 31 December 2022 (31 December 2021: 3,462,941, 744 shares). The Company’s shares are ordinary, registered,
non-privileged, with voting rights. All ordinary shares are fully paid. Each share gives the right to one vote, a right to
dividend and to a liquidation quota in the Company‘s property. The sole shareholder of Bulgarian Energy Holding
EAD is the Bulgarian state through the Minister of Energy.
The shares issued and authorized for the reporting periods can be presented as follows:
2022 2021
Number of shares Number of shares
Number of issued and fully paid shares:
At the beginning of the year 3,462,941,744 3,462,941,744
Total number of shares authorized at the end of the year 3,462,941,744 3,462,941,744
27.2 Other reserves
The other reserves are formed by profit distribution according to the Commercial Law and the Articles of Association
of the Company or from other sources by decision of the sole shareholder. These include statutory reserves and general
reserves. The statutory reserves are set aside until they reach one tenth or more of the registered capital. Sources for
funding statutory reserves are at least one tenth of the net profit, share premiums and the funds provided in the statutes
or decision of the sole shareholder. Statutory reserves can only be used to cover losses from current and prior reporting
periods. General reserves are formed as proposed by the Board of Directors and may be used to cover losses from
prior years and for other purposes. As of 31 December 2022, the statutory reserves amounted to BGN 346,294
thousand (31 December 2021: BGN 346,294 thousand). Reserves from the merger and replacement of shares of
subsidiaries amounted to BGN 102 thousand (31 December 2021: BGN 102 thousand), and general reserves amounted
to BGN 34,095 thousand (31 December 2021: BGN 34,095 thousand).
27.3 Reserve from revaluation of financial assets at fair value through other comprehensive income
In a revaluation reserve at fair value through another comprehensive income, were reported the revaluations of shares
of Transgaz S.A., Romania, and Balkangaz 2000 AD, Botevgrad, classified as financial assets at fair value through
another comprehensive income.
27.4 Revaluation reserve of non-financial assets
The revaluation reserve of non-financial assets includes increases in the fair value of property, plant and equipment
and decreases to the extent that those reductions are related to an increase in the same asset previously recognized in
other comprehensive income. Reserves can be used to cover losses and pay dividends only in limited types of
circumstances.
Separate Financial Statements
31 December 2022
39
networks companies for the purchase of electicity used for technological costs for the period from 1 October 2022 to
31 December 2022. The funds for this program are provided through the target cotributions, which are required to be
paid by public enterprises in the energy sector that have 100% state-owned capital, as defined in art. 2, para. 1 of the
Public Enterprises Act. The payment of these contributions is made to the Security of Electricity System Fund, in
accordance with a decision adopted by the Council of Ministers based on §24 of the T CP (Transitional and Closing
Provisions) of the AASSBARB (Act Amending and Supplementing the State Budget Act) for 2022, defined by a
Mechanism included as an annex to the Program or solely affecting the enterprises in the BEH Group that produce
electricity.
As a result, in 2022, Bulgarian Energy Holding EAD made target contributuons in the Security of Electricity System
Fund amounting to BGN 3,181,011 thousand, as mandated by the decisions of the Council of Ministers. The required
funds were provided by NPP Kozloduy EAD – a producer of electricity.
27.Share capital and reserves
27.1 Share capital
The registered capital of the Company consists of 3,462,941,744 ordinary shares with a nominal value of BGN 1 each
as of 31 December 2022 (31 December 2021: 3,462,941, 744 shares). The Company’s shares are ordinary, registered,
non-privileged, with voting rights. All ordinary shares are fully paid. Each share gives the right to one vote, a right to
dividend and to a liquidation quota in the Company‘s property. The sole shareholder of Bulgarian Energy Holding
EAD is the Bulgarian state through the Minister of Energy.
The shares issued and authorized for the reporting periods can be presented as follows:
2022 2021
Number of shares Number of shares
Number of issued and fully paid shares:
At the beginning of the year 3,462,941,744 3,462,941,744
Total number of shares authorized at the end of the year 3,462,941,744 3,462,941,744
27.2 Other reserves
The other reserves are formed by profit distribution according to the Commercial Law and the Articles of Association
of the Company or from other sources by decision of the sole shareholder. These include statutory reserves and general
reserves. The statutory reserves are set aside until they reach one tenth or more of the registered capital. Sources for
funding statutory reserves are at least one tenth of the net profit, share premiums and the funds provided in the statutes
or decision of the sole shareholder. Statutory reserves can only be used to cover losses from current and prior reporting
periods. General reserves are formed as proposed by the Board of Directors and may be used to cover losses from
prior years and for other purposes. As of 31 December 2022, the statutory reserves amounted to BGN 346,294
thousand (31 December 2021: BGN 346,294 thousand). Reserves from the merger and replacement of shares of
subsidiaries amounted to BGN 102 thousand (31 December 2021: BGN 102 thousand), and general reserves amounted
to BGN 34,095 thousand (31 December 2021: BGN 34,095 thousand).
27.3 Reserve from revaluation of financial assets at fair value through other comprehensive income
In a revaluation reserve at fair value through another comprehensive income, were reported the revaluations of shares
of Transgaz S.A., Romania, and Balkangaz 2000 AD, Botevgrad, classified as financial assets at fair value through
another comprehensive income.
27.4 Revaluation reserve of non-financial assets
The revaluation reserve of non-financial assets includes increases in the fair value of property, plant and equipment
and decreases to the extent that those reductions are related to an increase in the same asset previously recognized in
other comprehensive income. Reserves can be used to cover losses and pay dividends only in limited types of
circumstances.
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
40
27.5 Reserve from revaluation of defined benefit plans
The revaluation reserve of defined benefit plans includes actuarial gains and losses as a result of the revaluation of
defined benefit plans.
28.Issued bonds
31 December
2022
31 December
2021
BGN’000 BGN’000
Bond issue 2021
Non-current part 1,170,664 1,170,194
Current Part 12,761 12,761
Bond issue 2018
Non-current part 1,171,224 1,170,362
Current part 20,930 20,930
2,375,579 2,374,247
Bond issue 2016
On 2 August 2016, Bulgarian Energy Holding EAD successfully placed its second issue of Eurobonds of EUR 550
million. With increased investor interest, the issue was oversubscribed to in excess of EUR 2 billion. The parameters
of the second bond issue of Bulgarian Energy Holding EAD are as follows:
- the amount of the bond issue (nominal value) EUR 550 million;
- issue value – 98.921%;
- fixed interest rate 4.875% per annum;
- the interest is payable once a year on 2 August, with the first payment on 2 August 2017;
- maturity 2 August 2021;
- ISIN code XS1405778041 of the bond issue, quoted on the Irish Stock Exchange’s Main Market;
The proceeds from the bond issue were used to repay the bridge loan of EUR 535 million provided by Banca IMI
S.p.A., London Branch, Bank of China (Luxembourg) S.A. and J.P. Morgan Limited, according to an agreement
sighed on 21 April 2016.
On 30 July 2021 the principal obligation in the amount of BGN 1,075,707 thousand under the bond issue was repaid.
Bond issue 2018
On 28 June 2018, in the context of highly volatile financial markets as a result of a number of negative news from the
international political scene, Bulgarian Energy Holding EAD successfully placed its third Eurobond issue of EUR 400
million on the Irish Stock Exchange. The Eurobond parameters are as follows:
- amount of the bond issue of EUR 400 million;
- maturity 28 June 2025;
- a fixed interest rate of 3.5% per annum;
- the interest is payable once a year on 28 June, with a first payment due on 28 June 2019;
- ISIN code 1839682116 of the bond issue quoted on the Irish Stock Exchange (Euronext Dublin);
- BEH EAD should observe certain covenants as follows:
• For so long as any Bond remains outstanding, the Issuer shall not, and shall not permit any of its Material
Subsidiaries to, directly or indirectly incur any Financial Indebtedness, provided, however that the
Issuer and any Material Subsidiary may incur Financial Indebtedness, if, after giving effect to the
incurrence of such Financial Indebtedness and the receipt and application of the proceeds therefrom:
(1) no Event of Default has or would have occurred and is or would be continuing; (2) the EBITDA
Coverage Ratio would be not less than 4.0 to 1.0; and (3) the Consolidated Leverage Ratio would not
be more than 4.5 to 1.0.
• For so long as any Bond remains outstanding, in the event that NEK is declared by a Bulgarian court to
be overindebted within the meaning of the Bulgarian Commerce Act, then the Issuer shall not, and shall
not permit (to the extent permitted by law) any of its Material Subsidiaries to, directly or indirectly,
incur any Financial Indebtedness.
On 31 July 2018, Bulgarian Energy Holding EAD successfully increased the third Eurobond issue listed on the Irish
Stock Exchange (Euronext Dublin) from EUR 400 million to EUR 550 million.
Separate Financial Statements
31 December 2022
40
27.5 Reserve from revaluation of defined benefit plans
The revaluation reserve of defined benefit plans includes actuarial gains and losses as a result of the revaluation of
defined benefit plans.
28.Issued bonds
31 December
2022
31 December
2021
BGN’000 BGN’000
Bond issue 2021
Non-current part 1,170,664 1,170,194
Current Part 12,761 12,761
Bond issue 2018
Non-current part 1,171,224 1,170,362
Current part 20,930 20,930
2,375,579 2,374,247
Bond issue 2016
On 2 August 2016, Bulgarian Energy Holding EAD successfully placed its second issue of Eurobonds of EUR 550
million. With increased investor interest, the issue was oversubscribed to in excess of EUR 2 billion. The parameters
of the second bond issue of Bulgarian Energy Holding EAD are as follows:
- the amount of the bond issue (nominal value) EUR 550 million;
- issue value – 98.921%;
- fixed interest rate 4.875% per annum;
- the interest is payable once a year on 2 August, with the first payment on 2 August 2017;
- maturity 2 August 2021;
- ISIN code XS1405778041 of the bond issue, quoted on the Irish Stock Exchange’s Main Market;
The proceeds from the bond issue were used to repay the bridge loan of EUR 535 million provided by Banca IMI
S.p.A., London Branch, Bank of China (Luxembourg) S.A. and J.P. Morgan Limited, according to an agreement
sighed on 21 April 2016.
On 30 July 2021 the principal obligation in the amount of BGN 1,075,707 thousand under the bond issue was repaid.
Bond issue 2018
On 28 June 2018, in the context of highly volatile financial markets as a result of a number of negative news from the
international political scene, Bulgarian Energy Holding EAD successfully placed its third Eurobond issue of EUR 400
million on the Irish Stock Exchange. The Eurobond parameters are as follows:
- amount of the bond issue of EUR 400 million;
- maturity 28 June 2025;
- a fixed interest rate of 3.5% per annum;
- the interest is payable once a year on 28 June, with a first payment due on 28 June 2019;
- ISIN code 1839682116 of the bond issue quoted on the Irish Stock Exchange (Euronext Dublin);
- BEH EAD should observe certain covenants as follows:
• For so long as any Bond remains outstanding, the Issuer shall not, and shall not permit any of its Material
Subsidiaries to, directly or indirectly incur any Financial Indebtedness, provided, however that the
Issuer and any Material Subsidiary may incur Financial Indebtedness, if, after giving effect to the
incurrence of such Financial Indebtedness and the receipt and application of the proceeds therefrom:
(1) no Event of Default has or would have occurred and is or would be continuing; (2) the EBITDA
Coverage Ratio would be not less than 4.0 to 1.0; and (3) the Consolidated Leverage Ratio would not
be more than 4.5 to 1.0.
• For so long as any Bond remains outstanding, in the event that NEK is declared by a Bulgarian court to
be overindebted within the meaning of the Bulgarian Commerce Act, then the Issuer shall not, and shall
not permit (to the extent permitted by law) any of its Material Subsidiaries to, directly or indirectly,
incur any Financial Indebtedness.
On 31 July 2018, Bulgarian Energy Holding EAD successfully increased the third Eurobond issue listed on the Irish
Stock Exchange (Euronext Dublin) from EUR 400 million to EUR 550 million.
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
41
On 12 October 2018, Bulgarian Energy Holding EAD recorded a second increase of its third Eurobond issue, listed
on the Irish Stock Exchange (Euronext Dublin) from EUR 550 million to EUR 600 million.
The proceeds from the issue are intended for general corporate purposes and refinancing of Eurobonds issued by the
company in 2013, maturing in November 2018.
On 27 June 2019 was effected the first interest payment, and on 24 June 2020 – the second and on 25 June 2021 – the
third interest payment and on 28 June 2022 – the forth interest payment. The annual interest payable amounts to EUR
21,000 thousand (BGN 41,072 thousand).
Bond issue 2021
On 15 July 2021, BEH successfully placed its fourth bond issue in the amount of EUR 600 million at an annual interest
rate of 2.45%. Given the extremely strong interest from investors, the bond was re-subscribed 2.3 times, and the
interest rate is the lowest achieved by Bulgarian Energy Holding EAD since the company participated in the
international financial markets. The parameters of the Eurobond are the following:
- amount of the bond issue EUR 600 million;
- maturity 22 July 2028;
- fixed interest rate 2.45% per annum;
- the interest is payable once a year on 22 nd July, with the first payment due on 22 July 2022;
- ISIN code XS2367164576 of the bond issue, which is listed on the Irish Stock Exchange's main securities
market (Euronext Dublin);
- BEH EAD should comply with certain covenants as follows:
• As long as there are obligations under issued bonds, the Issuer will not and will not allow the larger
subsidiaries, directly or indirectly, to assume financial obligations, unless the Issuer and one of the larger
subsidiaries may assume a financial obligation, if, after the assumption of such a financial obligation
and the receipt and application of the proceeds from it: (1) there is no or would not occur and does not
continue or would not continue a case of default; (2) the EBITDA coverage ratio is not less than 4.0 to
1.0; and (3) The consolidated leverage ratio is no more than 4.5 to 1.0.
• As long as there are obligations under issued bonds, in case NEK EAD is declared by a Bulgarian court
as over-indebted within the meaning of the Bulgarian Commercial Law, the Issuer will not and will not
allow (as permitted by law) its larger subsidiaries, directly or indirectly, to incur financial obligations.
Proceeds from the newly issued bonds were used to refinance the second bond issue of the Company with a nominal
value of EUR 550 million, placed in 2016 at an annual interest rate of 4.875%, maturing on 2 August 2021, as well as
for general corporate purposes, except of coal-related activities.
On 31 July 2022, the first interest payment was made. The annual interest payable amount is BGN 27,751 thousand
(EUR 14,700 thousand).
Credit rating
• Moody's Rating Agency
On 18 June 2018, the rating agency Moody`s assigned “Ba1” rating to the group of Bulgarian Energy Holding EAD
with a stable outlook, and “Ba2” to the unsecured bonds issued by the Company.
On 12 July 2021, a credit rating of “Ba2” was assigned to an unsecured and non-subordinated bond of Bulgarian
Energy Holding EAD, issued on 15 July 2021, maturing on 22 July 2028.
As of 31 December 2022, the assigned long-term credit rating remains unchanged - "Ba1" with a stable outlook for
the group of "Bulgarian Energy Holding" EAD and "Ba2" for unsecured bonds of the company maturing in 2025 and
2028.
• Fitch Ratings Rating agency
On 26 February 2021, the long-term credit rating BB in both foreign and local currency was confirmed, and the outlook
was raised from stable to positive. This change reflects the improved credit rating perspective of the Republic of
Bulgaria.
Separate Financial Statements
31 December 2022
41
On 12 October 2018, Bulgarian Energy Holding EAD recorded a second increase of its third Eurobond issue, listed
on the Irish Stock Exchange (Euronext Dublin) from EUR 550 million to EUR 600 million.
The proceeds from the issue are intended for general corporate purposes and refinancing of Eurobonds issued by the
company in 2013, maturing in November 2018.
On 27 June 2019 was effected the first interest payment, and on 24 June 2020 – the second and on 25 June 2021 – the
third interest payment and on 28 June 2022 – the forth interest payment. The annual interest payable amounts to EUR
21,000 thousand (BGN 41,072 thousand).
Bond issue 2021
On 15 July 2021, BEH successfully placed its fourth bond issue in the amount of EUR 600 million at an annual interest
rate of 2.45%. Given the extremely strong interest from investors, the bond was re-subscribed 2.3 times, and the
interest rate is the lowest achieved by Bulgarian Energy Holding EAD since the company participated in the
international financial markets. The parameters of the Eurobond are the following:
- amount of the bond issue EUR 600 million;
- maturity 22 July 2028;
- fixed interest rate 2.45% per annum;
- the interest is payable once a year on 22 nd July, with the first payment due on 22 July 2022;
- ISIN code XS2367164576 of the bond issue, which is listed on the Irish Stock Exchange's main securities
market (Euronext Dublin);
- BEH EAD should comply with certain covenants as follows:
• As long as there are obligations under issued bonds, the Issuer will not and will not allow the larger
subsidiaries, directly or indirectly, to assume financial obligations, unless the Issuer and one of the larger
subsidiaries may assume a financial obligation, if, after the assumption of such a financial obligation
and the receipt and application of the proceeds from it: (1) there is no or would not occur and does not
continue or would not continue a case of default; (2) the EBITDA coverage ratio is not less than 4.0 to
1.0; and (3) The consolidated leverage ratio is no more than 4.5 to 1.0.
• As long as there are obligations under issued bonds, in case NEK EAD is declared by a Bulgarian court
as over-indebted within the meaning of the Bulgarian Commercial Law, the Issuer will not and will not
allow (as permitted by law) its larger subsidiaries, directly or indirectly, to incur financial obligations.
Proceeds from the newly issued bonds were used to refinance the second bond issue of the Company with a nominal
value of EUR 550 million, placed in 2016 at an annual interest rate of 4.875%, maturing on 2 August 2021, as well as
for general corporate purposes, except of coal-related activities.
On 31 July 2022, the first interest payment was made. The annual interest payable amount is BGN 27,751 thousand
(EUR 14,700 thousand).
Credit rating
• Moody's Rating Agency
On 18 June 2018, the rating agency Moody`s assigned “Ba1” rating to the group of Bulgarian Energy Holding EAD
with a stable outlook, and “Ba2” to the unsecured bonds issued by the Company.
On 12 July 2021, a credit rating of “Ba2” was assigned to an unsecured and non-subordinated bond of Bulgarian
Energy Holding EAD, issued on 15 July 2021, maturing on 22 July 2028.
As of 31 December 2022, the assigned long-term credit rating remains unchanged - "Ba1" with a stable outlook for
the group of "Bulgarian Energy Holding" EAD and "Ba2" for unsecured bonds of the company maturing in 2025 and
2028.
• Fitch Ratings Rating agency
On 26 February 2021, the long-term credit rating BB in both foreign and local currency was confirmed, and the outlook
was raised from stable to positive. This change reflects the improved credit rating perspective of the Republic of
Bulgaria.
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
42
On 23 July 2021, a credit rating BB (EXP) was awarded to a non-secured and non-subordinated bond issue by
Bulgarian Energy Holding EAD. The bond issue was placed on 15 July 2021 with a maturity date on 22 July 2028.
As of 31 December 2022, the awarded long-term credit rating remains unchanged for Bulgarian Energy Holding EAD,
with a rating of BB and a positive outlook in both local and foreign currency. The Company's unsecured bonds,
maturing in 2025 and 2028, maintain a rating of BB.
29.Loan from the European Investment Bank
In October 2019, Bulgarian Energy Holding EAD and the European Investment Bank concluded a Financing
Agreement for the construction of the IGB gas pipeline worth EUR 109.9 million with a state financial guarantee
security from the Republic of Bulgaria, the Guarantee Agreement for which is ratified by the National Assembly. The
loan is provided to Bulgarian Energy Holding EAD as a shareholder in ICGB AD. On its part, BEH EAD transfers
the loan financing to the project company through a Shareholder Loan Agreement in the same amount, under the same
financial conditions set in the agreement with the European Investment Bank and without additional margin for
Bulgarian Energy Holding EAD. The repayment of the loan granted by the European Investment Bank will be carried
out using a grace period for repayment of the principal of the utilized tranches, which, according to the Agreement
concluded with the bank, may last up to 7 years from the date of utilization of a tranche.
On 17 August 2020, the first tranche of EUR 30 million was utilized under the following conditions: payment of
interest at the rate of six monthly interest rate 0.259%, five-year grace period for principal payments, payment of
principal twice a year, the last installment being due on 17 August 2045.
On 18 January 2021, the second tranche of EUR 30 million was utilized under the following conditions: payment of
interest at the rate of six monehts interest rate 0.237%, five-year grace period for principal payments, payment of
principal twice a year, the last installment being due on 18 January 2046.
On 1 December 2021, the third tranche of EUR 30 million was utilized under the following conditions: payment of
interest twice a year in the amount of 0.612%, five-year grace period for principal payments, payment of principal
twice a year, the last installment being due on 1 December 2046.
On 29 September 2022, the fourth tranche of EUR 19.9 million was utilized under the following conditions: payment
of interest twice a year in the amount of 2.888%, five-year grace period for principal payments, payment of principal
twice a year, the last installment being due on 29 September 2047.
As of 31 December 2022, the debt to the European Investment Bank amounts to BGN 215,379 thousand, including
BGN 214,946 thousand principal and BGN 433 thousand interest (31 December 2021: BGN 176,174 thousand).
Reconciliation between the opening and closing balances in the separate statement of financial position of the
liabilities arising from financial activities
Change of liabilities
from:
Liabilities arising from financial activities Total
liabilities
from
financial
activities:
Bond issue
2018
Bond issue
2021 Bank loan
Loans from
related
parties
1 January 2022 1,191,292 1,182,955 176,174 - 2,550,421
Cash flows from financial
activities, net (41,072) (28,751) 38,271 209,048 177,496
Proceeds - - 38,921 387,865 426,786
Principal payments - - - (174,637) (174,637)
Interest payments (41,072) (28,751) (650) (4,180) (74,653)
Non-monetary changes -
dematerialised 41,934 29,221 934 4,180 76,269
Interest expense 41,072 28,751 934 4,180 74,937
Discount and amortization
of expenses 862 470 - - 1,332
Received loan (note 33) 350,000 350,000
On 31 December 2022 1,192,154 1,183,425 215,379 213,228 2,804,186
Separate Financial Statements
31 December 2022
42
On 23 July 2021, a credit rating BB (EXP) was awarded to a non-secured and non-subordinated bond issue by
Bulgarian Energy Holding EAD. The bond issue was placed on 15 July 2021 with a maturity date on 22 July 2028.
As of 31 December 2022, the awarded long-term credit rating remains unchanged for Bulgarian Energy Holding EAD,
with a rating of BB and a positive outlook in both local and foreign currency. The Company's unsecured bonds,
maturing in 2025 and 2028, maintain a rating of BB.
29.Loan from the European Investment Bank
In October 2019, Bulgarian Energy Holding EAD and the European Investment Bank concluded a Financing
Agreement for the construction of the IGB gas pipeline worth EUR 109.9 million with a state financial guarantee
security from the Republic of Bulgaria, the Guarantee Agreement for which is ratified by the National Assembly. The
loan is provided to Bulgarian Energy Holding EAD as a shareholder in ICGB AD. On its part, BEH EAD transfers
the loan financing to the project company through a Shareholder Loan Agreement in the same amount, under the same
financial conditions set in the agreement with the European Investment Bank and without additional margin for
Bulgarian Energy Holding EAD. The repayment of the loan granted by the European Investment Bank will be carried
out using a grace period for repayment of the principal of the utilized tranches, which, according to the Agreement
concluded with the bank, may last up to 7 years from the date of utilization of a tranche.
On 17 August 2020, the first tranche of EUR 30 million was utilized under the following conditions: payment of
interest at the rate of six monthly interest rate 0.259%, five-year grace period for principal payments, payment of
principal twice a year, the last installment being due on 17 August 2045.
On 18 January 2021, the second tranche of EUR 30 million was utilized under the following conditions: payment of
interest at the rate of six monehts interest rate 0.237%, five-year grace period for principal payments, payment of
principal twice a year, the last installment being due on 18 January 2046.
On 1 December 2021, the third tranche of EUR 30 million was utilized under the following conditions: payment of
interest twice a year in the amount of 0.612%, five-year grace period for principal payments, payment of principal
twice a year, the last installment being due on 1 December 2046.
On 29 September 2022, the fourth tranche of EUR 19.9 million was utilized under the following conditions: payment
of interest twice a year in the amount of 2.888%, five-year grace period for principal payments, payment of principal
twice a year, the last installment being due on 29 September 2047.
As of 31 December 2022, the debt to the European Investment Bank amounts to BGN 215,379 thousand, including
BGN 214,946 thousand principal and BGN 433 thousand interest (31 December 2021: BGN 176,174 thousand).
Reconciliation between the opening and closing balances in the separate statement of financial position of the
liabilities arising from financial activities
Change of liabilities
from:
Liabilities arising from financial activities Total
liabilities
from
financial
activities:
Bond issue
2018
Bond issue
2021 Bank loan
Loans from
related
parties
1 January 2022 1,191,292 1,182,955 176,174 - 2,550,421
Cash flows from financial
activities, net (41,072) (28,751) 38,271 209,048 177,496
Proceeds - - 38,921 387,865 426,786
Principal payments - - - (174,637) (174,637)
Interest payments (41,072) (28,751) (650) (4,180) (74,653)
Non-monetary changes -
dematerialised 41,934 29,221 934 4,180 76,269
Interest expense 41,072 28,751 934 4,180 74,937
Discount and amortization
of expenses 862 470 - - 1,332
Received loan (note 33) 350,000 350,000
On 31 December 2022 1,192,154 1,183,425 215,379 213,228 2,804,186
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
43
Change of liabilities
from:
Liabilities arising from financial activities Total
liabilities
from
financial
activities:
Bond issue
2016
Bond issue
2018
Bond issue
2021 Loan
On 1 January 2021 1,094,468 1,190,460 - 58,731 2,343,659
Cash flows from financial
activities, net (1,128,148) (41,072) 1,173,498 117,129 121,407
Proceeds - - 1,173,498 117,350 1,290,848
Principal payments (1,075,707) - - (1,075,707)
Interest payments (52,441) (41,072) - (221) (93,734)
Non-monetary changes,
dematerialised 33,680 41,904 9,457 314 85,355
Accrued interest
(increases) 30,590 41,072 12,761 314 84,737
Discount and amortization
of expenses 3,090 832 (3,304) - 618
On 31 December 2021 - 1,191,292 1,182,955 176,174 2,550,421
30. Employee retirement benefits liabilities
Employee retirement benefit liabilities to the personnel include the present value of the company’s liability as a t the
end of the reporting period to pay benefits to employees upon retirement.
Under the Bulgarian Labour Code and the Internal Rules for setting the salary, the Company is obliged to pay from
five to ten gross monthly salaries to its employees upon retirement, depending on the length of service in the Company.
If the employee has worked at BEH EAD for the past 10 years, he/she is to receive ten gross monthly salaries on
retirement, and if he/she has worked for less than 10 years - five gross monthly salaries. The retirement benefit plan
is not funded. For setting the amount of the liabilities the Company performed an actuarial valuation as at 31 December
2022, using the services of a certified actuary.
31 December
2022
31 December
2021
BGN’000 BGN’000
Present value of the retirement benefit payable:
Non-current part 755 721
Current part 203 193
Total retirement benefit payables recognized in the statement of financial
position. 958 914
The change in the present value of Employee retirement benefit liabilities is as follows:
2022 2021
BGN’000 BGN’000
Employee retirement benefits obligations
at the beginning of the year 914 811
Current services cost 98 96
Interest expenses 6 4
Payments made - (30)
Actuarial (profit) / loss (60) 33
Retirement benefit payables at the end of the year 958 914
Separate Financial Statements
31 December 2022
43
Change of liabilities
from:
Liabilities arising from financial activities Total
liabilities
from
financial
activities:
Bond issue
2016
Bond issue
2018
Bond issue
2021 Loan
On 1 January 2021 1,094,468 1,190,460 - 58,731 2,343,659
Cash flows from financial
activities, net (1,128,148) (41,072) 1,173,498 117,129 121,407
Proceeds - - 1,173,498 117,350 1,290,848
Principal payments (1,075,707) - - (1,075,707)
Interest payments (52,441) (41,072) - (221) (93,734)
Non-monetary changes,
dematerialised 33,680 41,904 9,457 314 85,355
Accrued interest
(increases) 30,590 41,072 12,761 314 84,737
Discount and amortization
of expenses 3,090 832 (3,304) - 618
On 31 December 2021 - 1,191,292 1,182,955 176,174 2,550,421
30. Employee retirement benefits liabilities
Employee retirement benefit liabilities to the personnel include the present value of the company’s liability as a t the
end of the reporting period to pay benefits to employees upon retirement.
Under the Bulgarian Labour Code and the Internal Rules for setting the salary, the Company is obliged to pay from
five to ten gross monthly salaries to its employees upon retirement, depending on the length of service in the Company.
If the employee has worked at BEH EAD for the past 10 years, he/she is to receive ten gross monthly salaries on
retirement, and if he/she has worked for less than 10 years - five gross monthly salaries. The retirement benefit plan
is not funded. For setting the amount of the liabilities the Company performed an actuarial valuation as at 31 December
2022, using the services of a certified actuary.
31 December
2022
31 December
2021
BGN’000 BGN’000
Present value of the retirement benefit payable:
Non-current part 755 721
Current part 203 193
Total retirement benefit payables recognized in the statement of financial
position. 958 914
The change in the present value of Employee retirement benefit liabilities is as follows:
2022 2021
BGN’000 BGN’000
Employee retirement benefits obligations
at the beginning of the year 914 811
Current services cost 98 96
Interest expenses 6 4
Payments made - (30)
Actuarial (profit) / loss (60) 33
Retirement benefit payables at the end of the year 958 914
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
44
The main assumptions used to set the retirement benefit payables are presented below:
2022 2021
Discount rate 5.5% 0.6%
Future increase of the remunerations for the next year 9.0% 9.0%
Future increase of the remunerations for the years after the next year 9.0% 9.0%
Staff turnover: 18-30 years old 5.0% 5.0%
31-40 years old 3.0% 3.0%
41-50 years old 2.0% 2.0%
51-60 years old 1.0% 1.0%
Over 60 years old 0.0% 0.0%
The management of the Company has made these assumptions with the help of an independent appraiser actuary.
These assumptions have been used in setting the amount of payables for employee benefits upon retirement for the
reporting periods, and are considered the best estimate of the management.
The total expenses of defined benefit plans of the Company recognized in profit or loss, may be presented as follows:
2022 2021
BGN’000 BGN’000
Current services cost 98 95
Interest expenses 6 4
Net actuarial profit/loss recognized during the period 3 1
Total costs, recognized in Statement of Profit or Loss 107 100
The total amount of defined benefit plan expenses of the Company recognized in other comprehensive income, can
be presented as follows:
2022 2021
BGN’000 BGN’000
Revaluation of defined benefit payments – actuarial loss (63) 33
Total expenses recognized in other comprehensive income (63) 33
The weighted average duration of the defined benefit obligation as at 31 December 2022 is 10 years (31 December
2021: 11 years).
The significant actuarial assumptions in setting the payables of defined benefit plans are related to the discount rate
and expected rate of salary increases.
The following table presents a sensitivity analysis and summarizes the effects of changes in these actuarial
assumptions on defined benefit payables as of 31 December 2022.
Increase
by 1%
Decrease
by 1%
BGN’000 BGN’000
Salary growth 122 (105)
Change in the interest rate (98) 117
Change in the average life expectancy 13 (13)
The sensitivity analysis is based on a change in only one of the assumptions. It may differ from the actual change in
defined benefit obligations, as changes in assumptions are often interrelated.
Separate Financial Statements
31 December 2022
44
The main assumptions used to set the retirement benefit payables are presented below:
2022 2021
Discount rate 5.5% 0.6%
Future increase of the remunerations for the next year 9.0% 9.0%
Future increase of the remunerations for the years after the next year 9.0% 9.0%
Staff turnover: 18-30 years old 5.0% 5.0%
31-40 years old 3.0% 3.0%
41-50 years old 2.0% 2.0%
51-60 years old 1.0% 1.0%
Over 60 years old 0.0% 0.0%
The management of the Company has made these assumptions with the help of an independent appraiser actuary.
These assumptions have been used in setting the amount of payables for employee benefits upon retirement for the
reporting periods, and are considered the best estimate of the management.
The total expenses of defined benefit plans of the Company recognized in profit or loss, may be presented as follows:
2022 2021
BGN’000 BGN’000
Current services cost 98 95
Interest expenses 6 4
Net actuarial profit/loss recognized during the period 3 1
Total costs, recognized in Statement of Profit or Loss 107 100
The total amount of defined benefit plan expenses of the Company recognized in other comprehensive income, can
be presented as follows:
2022 2021
BGN’000 BGN’000
Revaluation of defined benefit payments – actuarial loss (63) 33
Total expenses recognized in other comprehensive income (63) 33
The weighted average duration of the defined benefit obligation as at 31 December 2022 is 10 years (31 December
2021: 11 years).
The significant actuarial assumptions in setting the payables of defined benefit plans are related to the discount rate
and expected rate of salary increases.
The following table presents a sensitivity analysis and summarizes the effects of changes in these actuarial
assumptions on defined benefit payables as of 31 December 2022.
Increase
by 1%
Decrease
by 1%
BGN’000 BGN’000
Salary growth 122 (105)
Change in the interest rate (98) 117
Change in the average life expectancy 13 (13)
The sensitivity analysis is based on a change in only one of the assumptions. It may differ from the actual change in
defined benefit obligations, as changes in assumptions are often interrelated.
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
45
The plan exposes the Company to actuarial risks such as interest rate risk, risk from changes in life expectancy, and
inflation risk:
• Interest rate risk – the present value of the defined benefit payable is calculated at a discount rate, determined
on the basis of the yield on government securities issues (with 10-year maturity). Given that the average
retirement age is longer than 10 years, it is necessary that the effective annual discount rate be determined
by extrapolation, following the requirements of §86 of IAS 19. A decline in the market yield of government
securities will lead to increase of the liabilities under plans with defined incomes of the Company.
• Risk of change in life expectancy – an increase in employee life expectancy would lead to an increase in
defined benefit payables.
• Inflation risk – an increase in inflation would lead to an increase in defined benefit payables..
31.Trade and other liabilities
31 December
2022
31 December
2021
BGN’000 BGN’000
Non-current liabilities
Leasing 395 23
Financial liabilities, non-current 395 23
Current liabilities
Amount received in connection with project activities 2,165 2,165
Liabilities to suppliers 853 891
Retained guarantees under contracts 56 43
Leasing 79 39
Financial liabilities current 3,153 3,138
Liabilities to staff 233 182
Liabilities to the state budget 20 146
Other liabilities 26 53
Non-financial liabilities current 279 381
Total trade and other receivables current 3,432 3,519
3,827 3,542
The terms of trade and other liabilities are as follows:
- Trade liabilities are not interest-bearing and are usually settled within ten days;
- Tax liabilities are not interest-bearing and are settled within the statutory terms;
- Other liabilities are not interest-bearing and are usually settled within a ten-day period.
32.Related party disclosures
Related parties of the Company include the sole shareholder – the Ministry of Energy, subsidiaries, associates and
joint ventures, key management personnel.
The Company discloses the following related parties:
Sole shareholder of the capital:
The Bulgarian State through the Minister of Energy
Subsidiaries and entities that are under common control:
Natsionalna Elektricheska Kompania EAD
NPP Kozloduy EAD
TPP Maritsa East 2 EAD
Mini Maritsa Iztok EAD
Bulgargaz EAD
Separate Financial Statements
31 December 2022
45
The plan exposes the Company to actuarial risks such as interest rate risk, risk from changes in life expectancy, and
inflation risk:
• Interest rate risk – the present value of the defined benefit payable is calculated at a discount rate, determined
on the basis of the yield on government securities issues (with 10-year maturity). Given that the average
retirement age is longer than 10 years, it is necessary that the effective annual discount rate be determined
by extrapolation, following the requirements of §86 of IAS 19. A decline in the market yield of government
securities will lead to increase of the liabilities under plans with defined incomes of the Company.
• Risk of change in life expectancy – an increase in employee life expectancy would lead to an increase in
defined benefit payables.
• Inflation risk – an increase in inflation would lead to an increase in defined benefit payables..
31.Trade and other liabilities
31 December
2022
31 December
2021
BGN’000 BGN’000
Non-current liabilities
Leasing 395 23
Financial liabilities, non-current 395 23
Current liabilities
Amount received in connection with project activities 2,165 2,165
Liabilities to suppliers 853 891
Retained guarantees under contracts 56 43
Leasing 79 39
Financial liabilities current 3,153 3,138
Liabilities to staff 233 182
Liabilities to the state budget 20 146
Other liabilities 26 53
Non-financial liabilities current 279 381
Total trade and other receivables current 3,432 3,519
3,827 3,542
The terms of trade and other liabilities are as follows:
- Trade liabilities are not interest-bearing and are usually settled within ten days;
- Tax liabilities are not interest-bearing and are settled within the statutory terms;
- Other liabilities are not interest-bearing and are usually settled within a ten-day period.
32.Related party disclosures
Related parties of the Company include the sole shareholder – the Ministry of Energy, subsidiaries, associates and
joint ventures, key management personnel.
The Company discloses the following related parties:
Sole shareholder of the capital:
The Bulgarian State through the Minister of Energy
Subsidiaries and entities that are under common control:
Natsionalna Elektricheska Kompania EAD
NPP Kozloduy EAD
TPP Maritsa East 2 EAD
Mini Maritsa Iztok EAD
Bulgargaz EAD
Bulgarian Energy Holding EAD
Separate Financial Statements
31 December 2022
46
Bulgartransgaz EAD
Elektroenergien Sistemen Operator EAD
Bulgartel AD
NPP Kozloduy – New Build EAD
HPP Kozloduy EAD
NPP Construction Supervision OOD
NPP Service EOOD
Interpriborservice OOD
Bulgartel Skopje DOOEL
Balkan Gas Hub EAD
ESO Engineering EOOD
ESO Project EOOD
Associated and joint ventures of BEH Group
ICGB AD
South Stream Bulgaria AD
ContourGlobal Maritsa East 3 AD
ContourGlobal Operations Bulgaria AD
ZAD Energy
POD Allianz Bulgaria AD
HPC Gorna Arda AD
Transbalkan Electric Power Trading S.A. – NECO S.A., Greece
Gastrade SA, Greece
Southeast Electricity Network Coordination Center (“SEleNe CC”), Greece
Key management staff of the company as of 31 December 2022.
Veselina Lachezarova Kanatova Buchkova - Chairperson of the Board of Directors
Angel Emilov Yankov - Deputy Chairperson of the Board of directors
Ivan Todorov Andreev - Executive member
Diyan Stanimirov Dimitrov - member of the Board of Directors
Anton Georgiev Simeonov - member of the Board of Directors
Zheko Mihaylov Zhekov - member of the Board of Directors
Stelian Penchev Koev - member of the Board of Directors
Terms of transactions with related parties
Sales and purchases from related parties are made under market conditions. End-of-year outstanding balances are
unsecured (excluding part of the loans), interest-free (excluding loans) and settled with cash. The Company has not
taken/provided guarantees for receivables from or liabilities to related parties.
As of 31 December 2022, the Company has accrued impairment charges for expected credit losses on receivables
from related parties in the amount of BGN 1,549,206 thousand. (31 December 2021: BGN 1,249,272 thousand).
An impairment review is carried out every financial year based on an analysis of the financial position of the related
party and the market in which it operates.
Separate Financial Statements
31 December 2022
46
Bulgartransgaz EAD
Elektroenergien Sistemen Operator EAD
Bulgartel AD
NPP Kozloduy – New Build EAD
HPP Kozloduy EAD
NPP Construction Supervision OOD
NPP Service EOOD
Interpriborservice OOD
Bulgartel Skopje DOOEL
Balkan Gas Hub EAD
ESO Engineering EOOD
ESO Project EOOD
Associated and joint ventures of BEH Group
ICGB AD
South Stream Bulgaria AD
ContourGlobal Maritsa East 3 AD
ContourGlobal Operations Bulgaria AD
ZAD Energy
POD Allianz Bulgaria AD
HPC Gorna Arda AD
Transbalkan Electric Power Trading S.A. – NECO S.A., Greece
Gastrade SA, Greece
Southeast Electricity Network Coordination Center (“SEleNe CC”), Greece
Key management staff of the company as of 31 December 2022.
Veselina Lachezarova Kanatova Buchkova - Chairperson of the Board of Directors
Angel Emilov Yankov - Deputy Chairperson of the Board of directors
Ivan Todorov Andreev - Executive member
Diyan Stanimirov Dimitrov - member of the Board of Directors
Anton Georgiev Simeonov - member of the Board of Directors
Zheko Mihaylov Zhekov - member of the Board of Directors
Stelian Penchev Koev - member of the Board of Directors
Terms of transactions with related parties
Sales and purchases from related parties are made under market conditions. End-of-year outstanding balances are
unsecured (excluding part of the loans), interest-free (excluding loans) and settled with cash. The Company has not
taken/provided guarantees for receivables from or liabilities to related parties.
As of 31 December 2022, the Company has accrued impairment charges for expected credit losses on receivables
from related parties in the amount of BGN 1,549,206 thousand. (31 December 2021: BGN 1,249,272 thousand).
An impairment review is carried out every financial year based on an analysis of the financial position of the related
party and the market in which it operates.
Bulgarian Energy Holding EAD
Separate financial statement
31 December 2022
47
32.1 Loans granted to related parties
In 2022 and the comparative period, the receivables under the loans granted to related parties are as follows:
Receivables from loans granted
to related parties
Receivables from
loans granted
Fair value and
discount corrective
Loss from
modification Impairment
Receivables from
loans granted, net
of impairment
BG N’000 BGN’000 BGN’000 BGN’000 BGN’000
Subsidiaries
NEK EAD 31 December 2022 2,114,023 (629,010) - (205,250) 1,279,763
31 December 2021 2,373,521 (1,054,793) - (746) 1,317,982
TPP Maritsa East 2 EAD 31 December 2022 82,189 (1,174) - - 81,015
31 December 2021 1,048,161 (162,068) - - 886,093
Bulgartel EAD 31 December 2022 2,210 - (55) (1,973) 182
31 December 2021 2,210 - (86) (1,862) 262
Bulgargaz EAD 31 December 2022 718,071 - - (694,061) 24,010
31 December 2021 - - - - -
Bulgartransgaz ЕАD 31 December 2022 37,865 - - - 37,865
31 December 2021 - - - - -
Joint ventures
ICGB AD 31 December 2022 215,379 - - (1) 215,378
31 December 2021 176,174 - - (12,088) 164,086
31 December 2022 3,169,737 (630,184) (55) (901,285) 1,638,213
31 December 2021 3,600,066 (1,216,861) (86) (14,696) 2,368,423
Separate financial statement
31 December 2022
47
32.1 Loans granted to related parties
In 2022 and the comparative period, the receivables under the loans granted to related parties are as follows:
Receivables from loans granted
to related parties
Receivables from
loans granted
Fair value and
discount corrective
Loss from
modification Impairment
Receivables from
loans granted, net
of impairment
BG N’000 BGN’000 BGN’000 BGN’000 BGN’000
Subsidiaries
NEK EAD 31 December 2022 2,114,023 (629,010) - (205,250) 1,279,763
31 December 2021 2,373,521 (1,054,793) - (746) 1,317,982
TPP Maritsa East 2 EAD 31 December 2022 82,189 (1,174) - - 81,015
31 December 2021 1,048,161 (162,068) - - 886,093
Bulgartel EAD 31 December 2022 2,210 - (55) (1,973) 182
31 December 2021 2,210 - (86) (1,862) 262
Bulgargaz EAD 31 December 2022 718,071 - - (694,061) 24,010
31 December 2021 - - - - -
Bulgartransgaz ЕАD 31 December 2022 37,865 - - - 37,865
31 December 2021 - - - - -
Joint ventures
ICGB AD 31 December 2022 215,379 - - (1) 215,378
31 December 2021 176,174 - - (12,088) 164,086
31 December 2022 3,169,737 (630,184) (55) (901,285) 1,638,213
31 December 2021 3,600,066 (1,216,861) (86) (14,696) 2,368,423
Bulgarian Energy Holding EAD
Separate financial statement
31 December 2022
48
In 2022 and the comparative period, the movements under the loans granted to related parties are as follows:
Movement of loans granted to related
parties for the period
Loans
granted
Novated
obligations
Repaid
loans
Interest
incomes
Adjustment
to interest
income
Amortization of
fair value
adjustment and
discount
through
financial
income
Amortisation of loss
from modification
through financial
income
Accrued
impairment
for the period
BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
Subsidiaries
NEK EAD 2022 700,000 - 1,023,215 63,716 - 425,782 - (204,504)
2021 - - 328,273 73,825 28,548 56,146 - (31,544)
TPP Maritsa East 2 EAD 2022 - - 994,644 28,672 - 160,894 - -
2021 - 407,622 90,709 29,533 2,852 15,887 - (12,701)
Bulgartel EAD 2022 - - 71 71 - - 30 (110)
2021 - - 157 118 - 8 (1,651)
Bulgargaz EAD 2022 852,509 57,515 198,408 6,455 - - - (694,061)
2021 - - - - - - - -
Bulgartransgaz ЕАD 2022 37,865 - 319 319 - - - -
2021 - - - - - - - -
Mini Maritsa Iztok EAD 2022 - - - - - - - -
2021 20,000 - 20,645 645 - - - -
Joint ventures
ICGB AD 2022 38,921 - 650 934 - - - 12,087
2021 117,350 - 221 314 - - - (9,156)
Separate financial statement
31 December 2022
48
In 2022 and the comparative period, the movements under the loans granted to related parties are as follows:
Movement of loans granted to related
parties for the period
Loans
granted
Novated
obligations
Repaid
loans
Interest
incomes
Adjustment
to interest
income
Amortization of
fair value
adjustment and
discount
through
financial
income
Amortisation of loss
from modification
through financial
income
Accrued
impairment
for the period
BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
Subsidiaries
NEK EAD 2022 700,000 - 1,023,215 63,716 - 425,782 - (204,504)
2021 - - 328,273 73,825 28,548 56,146 - (31,544)
TPP Maritsa East 2 EAD 2022 - - 994,644 28,672 - 160,894 - -
2021 - 407,622 90,709 29,533 2,852 15,887 - (12,701)
Bulgartel EAD 2022 - - 71 71 - - 30 (110)
2021 - - 157 118 - 8 (1,651)
Bulgargaz EAD 2022 852,509 57,515 198,408 6,455 - - - (694,061)
2021 - - - - - - - -
Bulgartransgaz ЕАD 2022 37,865 - 319 319 - - - -
2021 - - - - - - - -
Mini Maritsa Iztok EAD 2022 - - - - - - - -
2021 20,000 - 20,645 645 - - - -
Joint ventures
ICGB AD 2022 38,921 - 650 934 - - - 12,087
2021 117,350 - 221 314 - - - (9,156)
Bulgarian Energy Holding EAD
Separate financial statement
31 December 2022
49
Terms of the loans granted to related parties
Natsionalna Elektricheska Kompania EAD
On 21 August 2014, a loan agreement was signed consolidating the loans of NEK EAD to BEH EAD and the assigned
receivable from NPP Kozloduy EAD dated 1 April 2014 in the total amount of BGN 1,209,148 thousand. The term
of the new loan is 10 years, with a four-month grace period and an annual interest rate of 4.49%. Part of the receivable
amounting to BGN 170,784 thousand was deferred with an agreement concluded in 2018. On 28 July 2021, the
obligation was renegotiated under the following conditions:
- Loan amount - BGN 973,777,456.64
- Repayment term - 10 years starting from 28 July 2021;
- Loan repayment - monthly annuity installments
- Interest - 3.225% per annum;
- Legal interest for principal overdue - standard interest rate of the Bulgarian National Bank + 10%.
As of 31 December 2022, the receivable amounts to BGN 693,591 thousand and has no overdue payables.
On 25 April 2016, a contract was signed for the provision of a target loan amounting to EUR 521,625 thousand (BGN
1,020,210 thousand) for the repayment of NEK EAD’s liabilities to AES -3C Maritsa East 1 EOOD and ContourGlobal
Maritsa East 3 AD, which is a prerequisite for effectiveness of the signed agreements to amend the long-term contracts
for the purchase of electricity from the two power plants. The term of the loan is twelve months at an annual interest
rate of 6.65%. The contract contains a clause to renegotiate the terms in the event of a successful placement of the
bond issue. On 20 December 2016, the terms of the contract for the provision of a target loan to NEK EAD dated 25
April 2016 were changed as follows:
• Amount of principal - EUR 535,672,538 (BGN 1,047,684,419);
• Interest rate on the loan - 5.575% on an annual basis;
• Duration of the contract – 59 months and 26 days;
• Maturity of the principal – 28 July 2021;
• Date of entry into force – 2 August 2016.
On 28 July 2021, the obligation was renegotiated under the following conditions:
- Loan amount – BGN 1,047,684,419.40
- Repayment term - 7 years starting from 28 July 2021;
- Loan repayment - monthly installments for interest and one-off payment of the principal on 28.07.2028;
- Interest - 3.225% per annum.
- The debtor shall have the right to make a partial early repayment of the payable principal. For each early
repayment, the parties shall sign an updated repayment plan, taking into account the reduced amount of the
payable principal.
As of 31 December 2022, the receivable amount is BGN 247,729 and there are no overdue receivables.
On 22 January 2018, an agreement for deferring the interest was signed, with which the unpaid interest liabilities for
the total amount of BGN 192,272 thousand were consolidated and deferred. The interest liabilities initially arose from
an agreement dated 21 August 2014 (BGN 170,784 thousand) and a contract dated 22 April 2015 (BGN 21,488
thousand). As of 31 December 2022, the receivable was paid off.
On 28 July 2021, an agreement was concluded for deferring the unpaid interest liabilities for the total amount of BGN
550,720 thousand. The interest liabilities initially arose from an agreement dated 21 August 2014 (BGN 241,612
thousand) and an agreement dated 25 April 2016 (BGN 309,108 thousand). As of 31 December 2022, the receivable
amount is BGN 472,702 thousand and the payments are made on time.
On 14 April 2022, a loan contract was concluded for the amount of BGN 700,000 thousand in connection with the
decision of the Council of Ministers No. 142/10.03.2022. The loan has a term of thirty-three months at an annual
interest rate of 2.44% and a grace period of 12 months for principal payment. As of 31 December 2022, the receivable
amount is BGN 700,000, and the payments are made on time.
Separate financial statement
31 December 2022
49
Terms of the loans granted to related parties
Natsionalna Elektricheska Kompania EAD
On 21 August 2014, a loan agreement was signed consolidating the loans of NEK EAD to BEH EAD and the assigned
receivable from NPP Kozloduy EAD dated 1 April 2014 in the total amount of BGN 1,209,148 thousand. The term
of the new loan is 10 years, with a four-month grace period and an annual interest rate of 4.49%. Part of the receivable
amounting to BGN 170,784 thousand was deferred with an agreement concluded in 2018. On 28 July 2021, the
obligation was renegotiated under the following conditions:
- Loan amount - BGN 973,777,456.64
- Repayment term - 10 years starting from 28 July 2021;
- Loan repayment - monthly annuity installments
- Interest - 3.225% per annum;
- Legal interest for principal overdue - standard interest rate of the Bulgarian National Bank + 10%.
As of 31 December 2022, the receivable amounts to BGN 693,591 thousand and has no overdue payables.
On 25 April 2016, a contract was signed for the provision of a target loan amounting to EUR 521,625 thousand (BGN
1,020,210 thousand) for the repayment of NEK EAD’s liabilities to AES -3C Maritsa East 1 EOOD and ContourGlobal
Maritsa East 3 AD, which is a prerequisite for effectiveness of the signed agreements to amend the long-term contracts
for the purchase of electricity from the two power plants. The term of the loan is twelve months at an annual interest
rate of 6.65%. The contract contains a clause to renegotiate the terms in the event of a successful placement of the
bond issue. On 20 December 2016, the terms of the contract for the provision of a target loan to NEK EAD dated 25
April 2016 were changed as follows:
• Amount of principal - EUR 535,672,538 (BGN 1,047,684,419);
• Interest rate on the loan - 5.575% on an annual basis;
• Duration of the contract – 59 months and 26 days;
• Maturity of the principal – 28 July 2021;
• Date of entry into force – 2 August 2016.
On 28 July 2021, the obligation was renegotiated under the following conditions:
- Loan amount – BGN 1,047,684,419.40
- Repayment term - 7 years starting from 28 July 2021;
- Loan repayment - monthly installments for interest and one-off payment of the principal on 28.07.2028;
- Interest - 3.225% per annum.
- The debtor shall have the right to make a partial early repayment of the payable principal. For each early
repayment, the parties shall sign an updated repayment plan, taking into account the reduced amount of the
payable principal.
As of 31 December 2022, the receivable amount is BGN 247,729 and there are no overdue receivables.
On 22 January 2018, an agreement for deferring the interest was signed, with which the unpaid interest liabilities for
the total amount of BGN 192,272 thousand were consolidated and deferred. The interest liabilities initially arose from
an agreement dated 21 August 2014 (BGN 170,784 thousand) and a contract dated 22 April 2015 (BGN 21,488
thousand). As of 31 December 2022, the receivable was paid off.
On 28 July 2021, an agreement was concluded for deferring the unpaid interest liabilities for the total amount of BGN
550,720 thousand. The interest liabilities initially arose from an agreement dated 21 August 2014 (BGN 241,612
thousand) and an agreement dated 25 April 2016 (BGN 309,108 thousand). As of 31 December 2022, the receivable
amount is BGN 472,702 thousand and the payments are made on time.
On 14 April 2022, a loan contract was concluded for the amount of BGN 700,000 thousand in connection with the
decision of the Council of Ministers No. 142/10.03.2022. The loan has a term of thirty-three months at an annual
interest rate of 2.44% and a grace period of 12 months for principal payment. As of 31 December 2022, the receivable
amount is BGN 700,000, and the payments are made on time.
Bulgarian Energy Holding EAD
Separate financial statement
31 December 2022
50
TPP Maritsa East 2 EAD
On 6 December 2021, a loan contract was concluded, through which the obligations under a loan contract dated 16
October 2019 were renegotiated – principals amounting to BGN 323,025 thousand and interests in the amount of BGN
16,537 thousand; liabilities under a loan contract dated 31 December 2020 – principals amounting to BGN 350,091
thousand and interests in the amount of BGN 17,484 thousand, liabilities for purchase-sale of greenhouse gas
emissions allowances dated 20 April 2021 – principals in the amount of BGN 338,112 thousand and interests in the
amount of BGN 2,911 thousand. The terms of the loan contract are as follows:
• Loan amount: BGN 1,048,160,934.24
• Payment term: Until 31 July 2028, with a 12-month grace period for the principal
• Interest: 3.225% per annum
• Means of repayment: Annuity installments.
On 17 October 2022, an additional agreement was signed between TPP Maritsa East 2 EAD and Bulgarian Energy
Holding EAD, whereby the parties agree that the debtor has the right to make partial early repayment of the
outstanding principal. After each early repayment, the parties will sign an updated repayment plan, reflecting the
reduced amount of the outstanding principal.
As of 31 December 2022, the receivable amounts to BGN 82,189 thousand and there are no overdue receivables.
On 22 November 2021, a contract was concluded to grant a credit line of BGN 100 million to TPP Maritsa East 2
EAD for working capital purposes and repayment of obligations related to the purchase of greenhouse gas emissions
allowances issued between 1 January 2021 and 30 June 2021. The contract has a term of 12 months, and the credit
limit is provided for a period of 12 months minus one day. The interest rate is 3.225% annual interest rate on the
utilized funds. As of 31 December 2022, the contract has expired, and there are no outstanding receivables under it.
Bulgartel AD
On 21 December 2016, the obligations under loan contract with Bulgartel AD were consolidated and novated
amounting to a total of BGN 2,882 thousand, including principal of BGN 2,492 thousand and interest of BGN 390
thousand. As of 31 December 2021, nine additional agreements for extension have been signed. The repayment term
for the novated obligations is 1 August 2025. The annual interest rate is 3.225%, and the penalty interest rate for late
payment of principal is BIR+10%. As of 31 December 2022, the outstanding amount is BGN 2,210 thousand, and
there are no overdue receivables.
Bulgargaz EAD
On 25 February 2022, based on a protocol decision of 23 February 2022 of the Board of Directors of Bulgarian Energy
Holding EAD and a protocol decision of 25 February 2022 of the Minister of Energy, a loan contract was concluded
between Bulgarian Energy Holding EAD and Bulgargaz EAD in the form of a credit line, in order to ensure the service
of the company's commitments under the contract with OOO Gazprom Export for the supply of natural gas to Bulgaria,
under the following conditions:
- Limit: BGN 200,000,000 (two hundred million);
- Validity: 12 months from the date of contract conclusion for a short-term credit line;
- Interest rate: 3.23% per annum on the used amount.
As of 31 December 2022, the size of the receivable is BGN 200,556 thousand, and there are no overdue receivables.
On 6 July 2022, a contract was concluded for the provision of a short-term credit line with Bulgargaz EAD in the
amount of BGN 60,000 thousand. The purpose of the loan is to repay obligations under contracts for the supply of
natural gas for the Republic of Bulgaria, concluded between Bulgargaz EAD and natural gas suppliers. The validity
period is twelve months from the date of the contract with an annual interest rate of 3.23%. The funds are utilized at
the borrower's request, repeatedly, within the agreed term. The loan repayment is carried out according to a repayment
plan for each requested amount. As of 31 December 2022, the payable amount is BGN 60,000 thousand and there are
no overdue receivables.
On 21 December 2022, a loan agreement was concluded with which funds were provided to Bulgargaz EAD in the
amount of BGN 457,515 thousand. The purpose of the loan is to cover the operational needs of the subsidiary and to
pay dividends from the profit for 2021, payable by the company. The repayment term is twelve months following the
utilization of the amount with the principal being paid once at the end of the period. The interest rate on the loan is
3.275% per annum. As of 31 December 2022, the payable amount is BGN 457,515 thousand and there are no overdue
receivables.
Separate financial statement
31 December 2022
50
TPP Maritsa East 2 EAD
On 6 December 2021, a loan contract was concluded, through which the obligations under a loan contract dated 16
October 2019 were renegotiated – principals amounting to BGN 323,025 thousand and interests in the amount of BGN
16,537 thousand; liabilities under a loan contract dated 31 December 2020 – principals amounting to BGN 350,091
thousand and interests in the amount of BGN 17,484 thousand, liabilities for purchase-sale of greenhouse gas
emissions allowances dated 20 April 2021 – principals in the amount of BGN 338,112 thousand and interests in the
amount of BGN 2,911 thousand. The terms of the loan contract are as follows:
• Loan amount: BGN 1,048,160,934.24
• Payment term: Until 31 July 2028, with a 12-month grace period for the principal
• Interest: 3.225% per annum
• Means of repayment: Annuity installments.
On 17 October 2022, an additional agreement was signed between TPP Maritsa East 2 EAD and Bulgarian Energy
Holding EAD, whereby the parties agree that the debtor has the right to make partial early repayment of the
outstanding principal. After each early repayment, the parties will sign an updated repayment plan, reflecting the
reduced amount of the outstanding principal.
As of 31 December 2022, the receivable amounts to BGN 82,189 thousand and there are no overdue receivables.
On 22 November 2021, a contract was concluded to grant a credit line of BGN 100 million to TPP Maritsa East 2
EAD for working capital purposes and repayment of obligations related to the purchase of greenhouse gas emissions
allowances issued between 1 January 2021 and 30 June 2021. The contract has a term of 12 months, and the credit
limit is provided for a period of 12 months minus one day. The interest rate is 3.225% annual interest rate on the
utilized funds. As of 31 December 2022, the contract has expired, and there are no outstanding receivables under it.
Bulgartel AD
On 21 December 2016, the obligations under loan contract with Bulgartel AD were consolidated and novated
amounting to a total of BGN 2,882 thousand, including principal of BGN 2,492 thousand and interest of BGN 390
thousand. As of 31 December 2021, nine additional agreements for extension have been signed. The repayment term
for the novated obligations is 1 August 2025. The annual interest rate is 3.225%, and the penalty interest rate for late
payment of principal is BIR+10%. As of 31 December 2022, the outstanding amount is BGN 2,210 thousand, and
there are no overdue receivables.
Bulgargaz EAD
On 25 February 2022, based on a protocol decision of 23 February 2022 of the Board of Directors of Bulgarian Energy
Holding EAD and a protocol decision of 25 February 2022 of the Minister of Energy, a loan contract was concluded
between Bulgarian Energy Holding EAD and Bulgargaz EAD in the form of a credit line, in order to ensure the service
of the company's commitments under the contract with OOO Gazprom Export for the supply of natural gas to Bulgaria,
under the following conditions:
- Limit: BGN 200,000,000 (two hundred million);
- Validity: 12 months from the date of contract conclusion for a short-term credit line;
- Interest rate: 3.23% per annum on the used amount.
As of 31 December 2022, the size of the receivable is BGN 200,556 thousand, and there are no overdue receivables.
On 6 July 2022, a contract was concluded for the provision of a short-term credit line with Bulgargaz EAD in the
amount of BGN 60,000 thousand. The purpose of the loan is to repay obligations under contracts for the supply of
natural gas for the Republic of Bulgaria, concluded between Bulgargaz EAD and natural gas suppliers. The validity
period is twelve months from the date of the contract with an annual interest rate of 3.23%. The funds are utilized at
the borrower's request, repeatedly, within the agreed term. The loan repayment is carried out according to a repayment
plan for each requested amount. As of 31 December 2022, the payable amount is BGN 60,000 thousand and there are
no overdue receivables.
On 21 December 2022, a loan agreement was concluded with which funds were provided to Bulgargaz EAD in the
amount of BGN 457,515 thousand. The purpose of the loan is to cover the operational needs of the subsidiary and to
pay dividends from the profit for 2021, payable by the company. The repayment term is twelve months following the
utilization of the amount with the principal being paid once at the end of the period. The interest rate on the loan is
3.275% per annum. As of 31 December 2022, the payable amount is BGN 457,515 thousand and there are no overdue
receivables.
Bulgarian Energy Holding EAD
Separate financial statement
31 December 2022
51
Bulgartransgaz EAD
On 5 July 2022, an agreement was concluded for the provision of a loan to Bulgartransgaz EAD in the amount of
BGN 37,865 thousand. The loan was granted with the specific purpose of financing further assignments awarded to
Bulgartransgaz EAD for serving the public, under orders from the Minister of Energy. The loan period extends until
30 June 2026 with a six-month grace period for paying the principal. The annual interest rate is 1.735%. As of 31
December 2022, the payable amount is BGN 37,865 thousand.
ICGB AD
In October 2019, Bulgarian Energy Holding EAD and the European Investment Bank concluded a Financing
Agreement for the construction of the IGB gas pipeline worth EUR 109.9 million with a state financial guarantee
provided by the Republic of Bulgaria. The Guarantee Agreement for this financing is ratified by the National
Assembly. The loan is provided to Bulgarian Energy Holding EAD as a shareholder in ICGB AD (project company).
In turn, BEH EAD transfers the loan financing to the project company through a Shareholder Loan Agreement dated
October 2019, in the same amount and under the same financial conditions as those set in the agreement with the
European Investment Bank, without any additional margin for Bulgarian Energy Holding EAD.
- On 17 August 2020, the first tranche amounting to EUR 30 million was utilized under the following
conditions: payment of interest twice a year in the amount of 0.259%, a five-year grace period for principal
payments, and payment of principal twice a year, as the last installment is due on 17 August 2045.
- On 18 January 2021, the second tranche amounting to EUR 30 million was utilized, under the following
conditions: payment of interest twice a year in the amount of 0.237%, a five-year grace period for principal
payments, and payment of principal twice a year, as the last installment is due on 18 January 2046.
- On 1 December 2021, the third tranche amounting to EUR 30 million was utilized, under the following
conditions: payment of interest twice a year in the amount of 0.612%, a five-year grace period for principal
payments, and payment of principal twice a year, as the last installment is due on 1 December 2046.
- On 29 September 2022, the fourth tranche amounting to EUR 19.9 million was utilized, under the following
conditions: payment of interest twice a year in the amount of 2.888%, a five-year grace period for principal
payments, and payment of principal twice a year, as the last installment is due on 29 September 2047.
As of 31 December 2022 the receivable amounts to BGN 215,379 thousand and has no overdue receivables.
32.2 Loans received from related parties
NPP Kozloduy EAD
On 14 April 2022, an agreement was concluded to receive a loan from NPP Kozloduy EAD in the amount of BGN
350,000 thousand. The loan was granted in connection to the decision of the Council of Ministers No. 142/10.03.2022.
The term of the contract is twelve months with a six-month grace period for the payment of the principal. The annual
interest rate is 1.66%. As of 31 December 2022, the payable amount is BGN 175,363 thousand.
On 5 July 2022, an agreement was concluded to receive a loan from NPP Kozloduy EAD in the amount of BGN 37,865
thousand. The loan was granted with the specific purpose of financing further assignments awarded to
Bulgartransgaz ЕАD for serving the public, under orders from the Minister of Energy. The contract term is until
30 June 2026, with a six-month grace period for paying the principal. The annual interest rate is 1.66%. As of
31 December 2022, the liability amounts to BGN 37,865 thousand.
32.3 Trade receivables from and payables to related parties
The total amount of of outstanding balances with related parties for the current and prior reporting periods is presented
in the table below.
Separate financial statement
31 December 2022
51
Bulgartransgaz EAD
On 5 July 2022, an agreement was concluded for the provision of a loan to Bulgartransgaz EAD in the amount of
BGN 37,865 thousand. The loan was granted with the specific purpose of financing further assignments awarded to
Bulgartransgaz EAD for serving the public, under orders from the Minister of Energy. The loan period extends until
30 June 2026 with a six-month grace period for paying the principal. The annual interest rate is 1.735%. As of 31
December 2022, the payable amount is BGN 37,865 thousand.
ICGB AD
In October 2019, Bulgarian Energy Holding EAD and the European Investment Bank concluded a Financing
Agreement for the construction of the IGB gas pipeline worth EUR 109.9 million with a state financial guarantee
provided by the Republic of Bulgaria. The Guarantee Agreement for this financing is ratified by the National
Assembly. The loan is provided to Bulgarian Energy Holding EAD as a shareholder in ICGB AD (project company).
In turn, BEH EAD transfers the loan financing to the project company through a Shareholder Loan Agreement dated
October 2019, in the same amount and under the same financial conditions as those set in the agreement with the
European Investment Bank, without any additional margin for Bulgarian Energy Holding EAD.
- On 17 August 2020, the first tranche amounting to EUR 30 million was utilized under the following
conditions: payment of interest twice a year in the amount of 0.259%, a five-year grace period for principal
payments, and payment of principal twice a year, as the last installment is due on 17 August 2045.
- On 18 January 2021, the second tranche amounting to EUR 30 million was utilized, under the following
conditions: payment of interest twice a year in the amount of 0.237%, a five-year grace period for principal
payments, and payment of principal twice a year, as the last installment is due on 18 January 2046.
- On 1 December 2021, the third tranche amounting to EUR 30 million was utilized, under the following
conditions: payment of interest twice a year in the amount of 0.612%, a five-year grace period for principal
payments, and payment of principal twice a year, as the last installment is due on 1 December 2046.
- On 29 September 2022, the fourth tranche amounting to EUR 19.9 million was utilized, under the following
conditions: payment of interest twice a year in the amount of 2.888%, a five-year grace period for principal
payments, and payment of principal twice a year, as the last installment is due on 29 September 2047.
As of 31 December 2022 the receivable amounts to BGN 215,379 thousand and has no overdue receivables.
32.2 Loans received from related parties
NPP Kozloduy EAD
On 14 April 2022, an agreement was concluded to receive a loan from NPP Kozloduy EAD in the amount of BGN
350,000 thousand. The loan was granted in connection to the decision of the Council of Ministers No. 142/10.03.2022.
The term of the contract is twelve months with a six-month grace period for the payment of the principal. The annual
interest rate is 1.66%. As of 31 December 2022, the payable amount is BGN 175,363 thousand.
On 5 July 2022, an agreement was concluded to receive a loan from NPP Kozloduy EAD in the amount of BGN 37,865
thousand. The loan was granted with the specific purpose of financing further assignments awarded to
Bulgartransgaz ЕАD for serving the public, under orders from the Minister of Energy. The contract term is until
30 June 2026, with a six-month grace period for paying the principal. The annual interest rate is 1.66%. As of
31 December 2022, the liability amounts to BGN 37,865 thousand.
32.3 Trade receivables from and payables to related parties
The total amount of of outstanding balances with related parties for the current and prior reporting periods is presented
in the table below.
Bulgarian Energy Holding EAD
Separate financial statement
31 December 2022
52
Trade receivables
31 December
2022
31 December
2021
BGN’000 BGN’000
Subsidiaries and companies under common joint control
NPP Kozloduy EAD 32 24
ESO EAD - 32,367
ESO EAD - impairment - (1)
- 32,366
Bulgargaz EAD 16 16
Bulgartransgaz ЕАD 285 285
Bulgartransgaz EAD - impairment (20) (1)
265 284
Mini Maritsa Iztok EAD 8,392 8,344
Mini Maritsa Iztok EAD - impairment (5,002) (4,247)
3,390 4,097
NEK EAD 35 25
TPP Maritsa East 2 EAD 21,144 21,104
TPP Maritsa East 2 EAD - impairment (12,661) (10,749)
8,483 10,355
12,221 47,167
December 31 December 31
Trade liabilities 2022 2021
BGN’000 BGN’000
Subsidiaries and companies under common joint control
TPP Maritsa East 2 EAD 57,478 65,441
Bulgartel EAD 3 -
NPP Kozloduy EAD - 3,123
57,481 68,564
A liability in the amount of BGN 57,478 thousand (31 December 2022: BGN 65,411 thousand) arises from granted
advances from TPP Maritsa East 2 EAD for the purchase of greenhouse gas emission allowances. Explanatory
information is provided in note 6.
32.4 Related party transactions
The total amount of transactions with related parties for the current and prior reporting periods is presented in the
tables below. The income charged from dividends and the interest charged on overdue liabilities for dividends are
presented in note 5.
Separate financial statement
31 December 2022
52
Trade receivables
31 December
2022
31 December
2021
BGN’000 BGN’000
Subsidiaries and companies under common joint control
NPP Kozloduy EAD 32 24
ESO EAD - 32,367
ESO EAD - impairment - (1)
- 32,366
Bulgargaz EAD 16 16
Bulgartransgaz ЕАD 285 285
Bulgartransgaz EAD - impairment (20) (1)
265 284
Mini Maritsa Iztok EAD 8,392 8,344
Mini Maritsa Iztok EAD - impairment (5,002) (4,247)
3,390 4,097
NEK EAD 35 25
TPP Maritsa East 2 EAD 21,144 21,104
TPP Maritsa East 2 EAD - impairment (12,661) (10,749)
8,483 10,355
12,221 47,167
December 31 December 31
Trade liabilities 2022 2021
BGN’000 BGN’000
Subsidiaries and companies under common joint control
TPP Maritsa East 2 EAD 57,478 65,441
Bulgartel EAD 3 -
NPP Kozloduy EAD - 3,123
57,481 68,564
A liability in the amount of BGN 57,478 thousand (31 December 2022: BGN 65,411 thousand) arises from granted
advances from TPP Maritsa East 2 EAD for the purchase of greenhouse gas emission allowances. Explanatory
information is provided in note 6.
32.4 Related party transactions
The total amount of transactions with related parties for the current and prior reporting periods is presented in the
tables below. The income charged from dividends and the interest charged on overdue liabilities for dividends are
presented in note 5.
Bulgarian Energy Holding EAD
Separate financial statement
31 December 2022
53
Sales to related parties Type of transactions 2022 2021
BGN’000 BGN’000
Sole shareholder
Ministry of Energy Vehicle costs 2 1
Subsidiaries and companies under common joint control
NPP Kozloduy EAD Holding agreement services 433 351
Other commercial 3 -
Bulgargaz EAD Holding agreement services 1,015 62
Bank guarantee fees 530 522
Other commercial 191 1
Mini Maritsa Iztok EAD Holding agreement services 168 111
NEK EAD Holding agreement services 126 89
Other commercial - -
TPP Maritsa East 2 EAD Greenhouse gas emission
allowances 2,110,011 1,164,168
Interests on greenhouse gas
emission allowances - 2,912
Holding agreement services 264 189
Delayed payment interest on
services under a holding agreement.
- 43
ICGB AD Re-invoiced loan costs and other
commercial expenses - 3
2,112,743 1,168,452
Separate financial statement
31 December 2022
53
Sales to related parties Type of transactions 2022 2021
BGN’000 BGN’000
Sole shareholder
Ministry of Energy Vehicle costs 2 1
Subsidiaries and companies under common joint control
NPP Kozloduy EAD Holding agreement services 433 351
Other commercial 3 -
Bulgargaz EAD Holding agreement services 1,015 62
Bank guarantee fees 530 522
Other commercial 191 1
Mini Maritsa Iztok EAD Holding agreement services 168 111
NEK EAD Holding agreement services 126 89
Other commercial - -
TPP Maritsa East 2 EAD Greenhouse gas emission
allowances 2,110,011 1,164,168
Interests on greenhouse gas
emission allowances - 2,912
Holding agreement services 264 189
Delayed payment interest on
services under a holding agreement.
- 43
ICGB AD Re-invoiced loan costs and other
commercial expenses - 3
2,112,743 1,168,452
Bulgarian Energy Holding EAD
Separate financial statement
31 December 2022
54
Purchases from related parties Type of transactions 2022 2021
BGN’000 BGN’000
Subsidiaries
Elektroenergien Systemen Operator
EAD Increase in capital through the
contribution of receivables. 35,000 -
NPP Kozloduy EAD Leased assets 222 285
Purchased real estate 4,590 -
Other commercial 1 -
Bulgargaz EAD Receivables from Toplofikatsia
Sofia EAD - 206,327
Bulgartel EAD Rent of a fiber optic line and
Internet 7 5
Mini Maritsa Iztok EAD Other commercial 2 -
Affiliated company
ZAD Energy Insurance 4 -
39,826 206,617
32.5 Remuneration of key management staff
2022 2021
BGN’000 BGN’000
Remuneration (561) (317)
Social security costs (11) (6)
Social costs (90) (47)
Unused annual leave and related social security expenses (13) (5)
(675) (375)
33.Non-cash transactions
During the reporting period, the Company carried out the following investment and financial transactions, in which
cash and cash equivalents were not used, and which are not reflected in the cash flow statements:
• On 14 April 2022, Bulgarian Energy Holding EAD concluded a loan agreement with the creditor NPP Kozloduy
EAD in the amount of BGN 350,000 thousand in connection with the decision of the Council of Ministers
No. 142/10.03.2022. On the same date a contract was concluded for the provision of a loan from Bulgarian
Energy Holding EAD to Natsionalna Elektricheska Kompania EAD in the amount of BGN 700,000 thousand
for the purpose of paying off an obligation of the subsidiary NEK EAD to the Republican budget by decision of
the Council of Ministers No. 142/10.03.2022. Funds in the amount of BGN 350,000 thousand were transferred
directly from NPP Kozloduy EAD to the account of the Republican budget and funds in the amount of BGN
350,000 thousand were transferred directly from Bulgarian Energy Holding EAD to the account of the
Republican budget.
• On 15 November 2022, the Board of Directors of Bulgarian Energy Holding EAD has determined a dividend
from the profit for 2021 of Bulgargaz in amount of BGN 57,515 thousand. On 21 December 2022, was executed
a loan contract with Bulgargaz EAD in amount of BGN 457,515 thousand with a targeted designation for
operational needs of the subsidiary and payment of the due dividend for 2021 from Bulgargaz EAD. An offset
Separate financial statement
31 December 2022
54
Purchases from related parties Type of transactions 2022 2021
BGN’000 BGN’000
Subsidiaries
Elektroenergien Systemen Operator
EAD Increase in capital through the
contribution of receivables. 35,000 -
NPP Kozloduy EAD Leased assets 222 285
Purchased real estate 4,590 -
Other commercial 1 -
Bulgargaz EAD Receivables from Toplofikatsia
Sofia EAD - 206,327
Bulgartel EAD Rent of a fiber optic line and
Internet 7 5
Mini Maritsa Iztok EAD Other commercial 2 -
Affiliated company
ZAD Energy Insurance 4 -
39,826 206,617
32.5 Remuneration of key management staff
2022 2021
BGN’000 BGN’000
Remuneration (561) (317)
Social security costs (11) (6)
Social costs (90) (47)
Unused annual leave and related social security expenses (13) (5)
(675) (375)
33.Non-cash transactions
During the reporting period, the Company carried out the following investment and financial transactions, in which
cash and cash equivalents were not used, and which are not reflected in the cash flow statements:
• On 14 April 2022, Bulgarian Energy Holding EAD concluded a loan agreement with the creditor NPP Kozloduy
EAD in the amount of BGN 350,000 thousand in connection with the decision of the Council of Ministers
No. 142/10.03.2022. On the same date a contract was concluded for the provision of a loan from Bulgarian
Energy Holding EAD to Natsionalna Elektricheska Kompania EAD in the amount of BGN 700,000 thousand
for the purpose of paying off an obligation of the subsidiary NEK EAD to the Republican budget by decision of
the Council of Ministers No. 142/10.03.2022. Funds in the amount of BGN 350,000 thousand were transferred
directly from NPP Kozloduy EAD to the account of the Republican budget and funds in the amount of BGN
350,000 thousand were transferred directly from Bulgarian Energy Holding EAD to the account of the
Republican budget.
• On 15 November 2022, the Board of Directors of Bulgarian Energy Holding EAD has determined a dividend
from the profit for 2021 of Bulgargaz in amount of BGN 57,515 thousand. On 21 December 2022, was executed
a loan contract with Bulgargaz EAD in amount of BGN 457,515 thousand with a targeted designation for
operational needs of the subsidiary and payment of the due dividend for 2021 from Bulgargaz EAD. An offset
Bulgarian Energy Holding EAD
Separate financial statement
31 December 2022
55
was made of the payable dividend against the obligation of Bulgarian Energy Holding EAD to provide cash
under the loan contract until the dividend amount.
• In October 2022, an offset was made of an obligation to NPP Kozloduy EAD for a monthly rent of a real estate
against receivables from NPP Kozloduy EAD for delivery of assets and repair of the same asset in the amount
of BGN 4 thousand.
34.Commitments, lease and contingent liabilities
Litigation and claims arise in the Company’s normal course of activity. According to the Company's Management,
the costs necessary to resolve these disputes and claims will not materially affect the financial position and cash flows
in future financial periods.
Proceedings by the European Commission against Bulgarian Energy Holding EAD- Case COMP/B1/АТ.39849
– BEH gas
The case concerns an alleged infringement of Article 102 TFEU in relation to alleged actions of BEH EAD and its
subsidiaries – Bulgargaz EAD and Bulgartransgaz EAD, aimed at:
• preventing their competitors from access to key gas infrastructure (gas transmission network and natural gas
storage facility) in Bulgaria, explicitly or implicitly denying access to third parties or delaying;
• preventing competitors from gaining access to a main import pipeline by reserving capacity that remains
unused.
The proceedings were initiated in 2013 with a view to the adoption of a decision under Chapter 3 (Articles 7 to 10) of
Regulation 1/2003.
On 23 March 2015, the EC issued a Statement of Objections. Bulgarian Energy Holding EAD and its gas subsidiaries
submitted their respective responses to the European Commission on 9 July 2015 (Bulgargaz EAD), 10 July 2015
(Bulgarian Energy Holding EAD) and 17 July 2015 (Bulgartransgaz EAD).
On 24 November 2017, a decision was taken by the 44th National Assembly of the Republic of Bulgaria to take the
necessary action for the termination of Case COMP/B1/AT.39849 – BEH Gas, by which the National Assembly
supports the termination of the case under the procedure of Art. 7 of Regulation (EU) No. 1/2003 without admission
of the alleged infringements and without taking responsibility for them, fulfilling the obligations resulting from any
prohibitive decision, including any financial penalties.
On 26 July 2018, a decision was taken by the 44th National Assembly (NA) of the Republic of Bulgaria to take action
for termination of Case COMP/B1/AT.39849 - BEH Gas pursuant to Art. 9 of Regulation (EC) No. 1/2003 by entering
into commitments by the Bulgarian side, and reaching settlement with the European Commission. The second decision
of the NA comes as a result of the development of case COMP/B1/AT.39816 between the EC and Gazprom, under
which on 24 May 2018 the Commission announced that a settlement had been reached and that it was terminated
under Art. 9 of Regulation (EC) No. 1/2003 without any financial penalty.
On 17 December 2018, the European Commission notified the rendering of Decision C (2018) 8806 under Case
AT.39849 BEH-Gas, by which the European Commission imposed a fine on Bulgarian Energy Holding EAD (BEH),
its subsidiary for gas supply Bulgargaz EAD, and its subsidiary for gas infrastructure Bulgartransgaz EAD (“BEH
Group”) in the amount of EUR 77,068,000 for hindering access of competitors to key gas infrastructure in Bulgaria
in violation of EU antitrust rules. The decision was received in the offices of the three companies on 19.12.2018,
which set the start of the appeal period of the EC Decision (two months and ten days after notification of the Decision
to the parties), and for payment of the fine (three months after the notification of the Decision to the parties) set therein.
The appeal against the decision does not delay the payment of the fine.
On 18 March 2019, ING Bank NV issued two unsecured bank guarantees in favor of the EU with a total amount equal
to the amount of the fine of EUR 77,068,000, as follows:
• a bank guarantee in the amount of EUR 51,379 thousand, covering 2/3 of the total amount of the fine,
securing the liabilities of Bulgarian Energy Holding EAD and Bulgargaz EAD;
• a bank guarantee in the amount of EUR 25,689 thousand, securing the liability of Bulgartransgaz EAD under
the imposed sanction.
On 4 July 2019, the Bulgarian State, through the Ministry of Foreign Affairs, filed a petition to intervene in the case
in support of BEH EAD and its gas subsidiaries.
Separate financial statement
31 December 2022
55
was made of the payable dividend against the obligation of Bulgarian Energy Holding EAD to provide cash
under the loan contract until the dividend amount.
• In October 2022, an offset was made of an obligation to NPP Kozloduy EAD for a monthly rent of a real estate
against receivables from NPP Kozloduy EAD for delivery of assets and repair of the same asset in the amount
of BGN 4 thousand.
34.Commitments, lease and contingent liabilities
Litigation and claims arise in the Company’s normal course of activity. According to the Company's Management,
the costs necessary to resolve these disputes and claims will not materially affect the financial position and cash flows
in future financial periods.
Proceedings by the European Commission against Bulgarian Energy Holding EAD- Case COMP/B1/АТ.39849
– BEH gas
The case concerns an alleged infringement of Article 102 TFEU in relation to alleged actions of BEH EAD and its
subsidiaries – Bulgargaz EAD and Bulgartransgaz EAD, aimed at:
• preventing their competitors from access to key gas infrastructure (gas transmission network and natural gas
storage facility) in Bulgaria, explicitly or implicitly denying access to third parties or delaying;
• preventing competitors from gaining access to a main import pipeline by reserving capacity that remains
unused.
The proceedings were initiated in 2013 with a view to the adoption of a decision under Chapter 3 (Articles 7 to 10) of
Regulation 1/2003.
On 23 March 2015, the EC issued a Statement of Objections. Bulgarian Energy Holding EAD and its gas subsidiaries
submitted their respective responses to the European Commission on 9 July 2015 (Bulgargaz EAD), 10 July 2015
(Bulgarian Energy Holding EAD) and 17 July 2015 (Bulgartransgaz EAD).
On 24 November 2017, a decision was taken by the 44th National Assembly of the Republic of Bulgaria to take the
necessary action for the termination of Case COMP/B1/AT.39849 – BEH Gas, by which the National Assembly
supports the termination of the case under the procedure of Art. 7 of Regulation (EU) No. 1/2003 without admission
of the alleged infringements and without taking responsibility for them, fulfilling the obligations resulting from any
prohibitive decision, including any financial penalties.
On 26 July 2018, a decision was taken by the 44th National Assembly (NA) of the Republic of Bulgaria to take action
for termination of Case COMP/B1/AT.39849 - BEH Gas pursuant to Art. 9 of Regulation (EC) No. 1/2003 by entering
into commitments by the Bulgarian side, and reaching settlement with the European Commission. The second decision
of the NA comes as a result of the development of case COMP/B1/AT.39816 between the EC and Gazprom, under
which on 24 May 2018 the Commission announced that a settlement had been reached and that it was terminated
under Art. 9 of Regulation (EC) No. 1/2003 without any financial penalty.
On 17 December 2018, the European Commission notified the rendering of Decision C (2018) 8806 under Case
AT.39849 BEH-Gas, by which the European Commission imposed a fine on Bulgarian Energy Holding EAD (BEH),
its subsidiary for gas supply Bulgargaz EAD, and its subsidiary for gas infrastructure Bulgartransgaz EAD (“BEH
Group”) in the amount of EUR 77,068,000 for hindering access of competitors to key gas infrastructure in Bulgaria
in violation of EU antitrust rules. The decision was received in the offices of the three companies on 19.12.2018,
which set the start of the appeal period of the EC Decision (two months and ten days after notification of the Decision
to the parties), and for payment of the fine (three months after the notification of the Decision to the parties) set therein.
The appeal against the decision does not delay the payment of the fine.
On 18 March 2019, ING Bank NV issued two unsecured bank guarantees in favor of the EU with a total amount equal
to the amount of the fine of EUR 77,068,000, as follows:
• a bank guarantee in the amount of EUR 51,379 thousand, covering 2/3 of the total amount of the fine,
securing the liabilities of Bulgarian Energy Holding EAD and Bulgargaz EAD;
• a bank guarantee in the amount of EUR 25,689 thousand, securing the liability of Bulgartransgaz EAD under
the imposed sanction.
On 4 July 2019, the Bulgarian State, through the Ministry of Foreign Affairs, filed a petition to intervene in the case
in support of BEH EAD and its gas subsidiaries.
Bulgarian Energy Holding EAD
Separate financial statement
31 December 2022
56
On 26 August 2019, the European Commission presented before the General Court its Defence in response to the
complaint lodged by Bulgarian Energy Holding EAD, Bulgargaz EAD and Bulgartransgaz EAD.
On 29 November 2019, Bulgarian Energy Holding EAD, Bulgargaz EAD and Bulgartransgaz EAD filed an
Opposition against the European Commission Defence.
On 20 February 2020, the Republic of Bulgaria filed through the Ministry of Foreign Affairs, within the period
specified by the General Court of the European Union, the official position of the Republic of Bulgaria on Case Т -
136/19, submitted by the Ministry of Energy and the Ministry Foreign Affairs, whereby the State intervened in support
of Bulgarian Energy Holding EAD, Bulgargaz EAD and Bulgartransgaz EAD against the European Commission,
before the General Court of the European Union.
The General Court examined additional documents and requested information to clarify all the circumstances involved
in the case. In a letter dated 14 March 2022 the Court requested the European Commission to provide non-confidential
versions of the documents listed. A response from the European Commission is still awaited.
On 29 September 2022, a hearing for the oral pleadings between the parties was held. It should be noted that the oral
pleadings mark the final stage of the proceedings.
A decision of the Court of the European Union is pending. In 2018, the Company recognized a provision in connection
with case COMP/B1/АТ.39849 – BEH gas in the amount of BGN 50,244 thousand. In 2022, the accrued expense for
the provision in the case amounts to BGN 754 thousand (2021: BGN 754 thousand). The total amount of the obligation
under the accrued provision as of 31 December 2022 is BGN 53,100 thousand (31 December 2021: BGN 52,346
thousand).
Legal claims
There are no significant legal claims brought against the Company.
Lease contracts
The lease liabilities of the Company are as follows:
31 December 2022 31 December 2021
Minimum
lease
payments
Discounting
Present
value of
installments
Minimum
lease
payments
Discounting
Present
value of
installments
BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
Within one year 93 (14) 79 325 (106) 219
Between one and five
years 213 (31) 182 1,164 (357) 807
Over five years 224 (12) 212 2,471 (342) 2,129
Total minimum lease
payments under lease
contracts
530 (57) 473 3,960 (805) 3,155
The company has concluded the following lease contracts:
Bulgarian Energy Holding EAD concluded a contract with NPP Kozloduy EAD on 1 September 2015 for the rental
of an administrative building in Sofia, 16 Veslets Str. The contract period is 10 years, with an option for extension.
The monthly installment under the contract amounts to BGN 24 thousand, VAT excluded. To find the present value
of the lease liability, Bulgarian Energy Holding EAD has used a discount percentage of 3.50%, which is an interest
rate derived by the Company in financing its own activities during the last year, and corresponding to the market
levels. The asset was acquired by Bulgarian Energy Holding EAD through a purchase and sale agreement on
11 October 2022, and the leasing agreement has been terminated. The company recognizes revenue from the
termination of the leasing agreement in the amount of BGN 173 thousand.
Bulgarian Energy Holding EAD has been renting 4 new multifunctional devices. The contract was signed in 2017 and
has a 60-month validity period. The rental fee is BGN 380 per month for all devices. After the contract expiry date,
the parties may negotiate conditions for acquisition of the devices by the lessee. The present value of the lease liability
is the market value of the devices at the time of conclusion of the lease contract with direct sale by the same supplier,
without funding. The calculated interest rate for the lease is 1.41%. As of 31 December 2022 the contract has expired
and the assets have been returned to the lessor.
Bulgarian Energy Holding EAD has been renting 3 motor vehicles for a period of four years. The present value of the
lease liability is the market value of the vehicle at the time of the lease contract conclusion in a direct sale from the
Separate financial statement
31 December 2022
56
On 26 August 2019, the European Commission presented before the General Court its Defence in response to the
complaint lodged by Bulgarian Energy Holding EAD, Bulgargaz EAD and Bulgartransgaz EAD.
On 29 November 2019, Bulgarian Energy Holding EAD, Bulgargaz EAD and Bulgartransgaz EAD filed an
Opposition against the European Commission Defence.
On 20 February 2020, the Republic of Bulgaria filed through the Ministry of Foreign Affairs, within the period
specified by the General Court of the European Union, the official position of the Republic of Bulgaria on Case Т -
136/19, submitted by the Ministry of Energy and the Ministry Foreign Affairs, whereby the State intervened in support
of Bulgarian Energy Holding EAD, Bulgargaz EAD and Bulgartransgaz EAD against the European Commission,
before the General Court of the European Union.
The General Court examined additional documents and requested information to clarify all the circumstances involved
in the case. In a letter dated 14 March 2022 the Court requested the European Commission to provide non-confidential
versions of the documents listed. A response from the European Commission is still awaited.
On 29 September 2022, a hearing for the oral pleadings between the parties was held. It should be noted that the oral
pleadings mark the final stage of the proceedings.
A decision of the Court of the European Union is pending. In 2018, the Company recognized a provision in connection
with case COMP/B1/АТ.39849 – BEH gas in the amount of BGN 50,244 thousand. In 2022, the accrued expense for
the provision in the case amounts to BGN 754 thousand (2021: BGN 754 thousand). The total amount of the obligation
under the accrued provision as of 31 December 2022 is BGN 53,100 thousand (31 December 2021: BGN 52,346
thousand).
Legal claims
There are no significant legal claims brought against the Company.
Lease contracts
The lease liabilities of the Company are as follows:
31 December 2022 31 December 2021
Minimum
lease
payments
Discounting
Present
value of
installments
Minimum
lease
payments
Discounting
Present
value of
installments
BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
Within one year 93 (14) 79 325 (106) 219
Between one and five
years 213 (31) 182 1,164 (357) 807
Over five years 224 (12) 212 2,471 (342) 2,129
Total minimum lease
payments under lease
contracts
530 (57) 473 3,960 (805) 3,155
The company has concluded the following lease contracts:
Bulgarian Energy Holding EAD concluded a contract with NPP Kozloduy EAD on 1 September 2015 for the rental
of an administrative building in Sofia, 16 Veslets Str. The contract period is 10 years, with an option for extension.
The monthly installment under the contract amounts to BGN 24 thousand, VAT excluded. To find the present value
of the lease liability, Bulgarian Energy Holding EAD has used a discount percentage of 3.50%, which is an interest
rate derived by the Company in financing its own activities during the last year, and corresponding to the market
levels. The asset was acquired by Bulgarian Energy Holding EAD through a purchase and sale agreement on
11 October 2022, and the leasing agreement has been terminated. The company recognizes revenue from the
termination of the leasing agreement in the amount of BGN 173 thousand.
Bulgarian Energy Holding EAD has been renting 4 new multifunctional devices. The contract was signed in 2017 and
has a 60-month validity period. The rental fee is BGN 380 per month for all devices. After the contract expiry date,
the parties may negotiate conditions for acquisition of the devices by the lessee. The present value of the lease liability
is the market value of the devices at the time of conclusion of the lease contract with direct sale by the same supplier,
without funding. The calculated interest rate for the lease is 1.41%. As of 31 December 2022 the contract has expired
and the assets have been returned to the lessor.
Bulgarian Energy Holding EAD has been renting 3 motor vehicles for a period of four years. The present value of the
lease liability is the market value of the vehicle at the time of the lease contract conclusion in a direct sale from the
Bulgarian Energy Holding EAD
Separate financial statement
31 December 2022
57
same supplier, with no financing. The calculated interest rate for the leasing of two of the vehicles is 1.31%, and for
the third vehicle it is 2.27%. As of 31 December 2021, the current value of the liability is BGN 23 thousand.
Bulgarian Energy Holding EAD rents motor vehicles for a period of two years. The present value of the lease liability
is determined based on the market value of the vehicle at the time of the lease contract conclusion in a direct sale from
the same supplier, without financing, reduced proportionally to the term of use of the asset. The calculated interest
rate for the vehicle lease is 2.0039%. As of 31 December 2021, the current value of the liability is BGN 20 thousand.
Bulgarian Energy Holding EAD has rented a part of a real estate for administrative purposes for a period of five years
with an option for extension. The monthly installment under the rental contract amounts to BGN 4 thousand, excl.
VAT. To determine the present value of the lease liability, Bulgarian Energy Holding EAD has used a discount rate
of 2.45%, which is an interest rate obtained by the company in financing its own activities in the last year and
corresponds to the market levels. As of 31 December 2021, the current value of the liability is BGN 431 thousand.
The assets are used only by the company and there are no sublease contracts.
- Depreciation costs in the amount to BGN 259 thousand;
- Interest expenses amounting to BGN 96 thousand.
The total lease cash flow in 2022 was as follows:
- Payments related to lease contracts – BGN 380 thousand.
Others
The latest tax inspections of the Company were carried out by the tax administration as follows:
• Corporate tax – until 31 December 2020;
• VAT – until 31 December 2020;
• Personal income tax – until 31 December 2008;
• Social security – until 31 December 2008.
The Company’s management does not consider that there are significant risks resulting from the dynamic fiscal and
regulatory environment in Bulgaria that would require adjustments to the financial statements for the year ended on
31 December 2022.
35.Financial risk management objectives and policy
The Company owns financial assets consisting of trade receivables, loans granted to subsidiaries, cash and short-term
deposits that arise directly from the activity.
The financial liabilities of the Company include bond issues, related-party loans and trade payables. The main purpose
of the loans is to provide financing to the Company activity.
In 2022, as well as in 2021, the Company did not own or trade with derivative financial instruments.
The main risks arising from the Company’s financial instruments are liquidity risk, currency risk and credit risk.
Current risks are identified, measured and monitored using various control mechanisms introduced to determine
adequate prices for the services offered by the Company, as well as to adequately assess the market circumstances of
the investments made by it and the forms of maintenance of the free liquidity, without allowing an unjustified
concentration of risk and others. The Company’s risk management is currently conducted by the management and the
relevant structural units, depending on the type and specificity of the different kind of risk to which the Company is
exposed in its activities.
Separate financial statement
31 December 2022
57
same supplier, with no financing. The calculated interest rate for the leasing of two of the vehicles is 1.31%, and for
the third vehicle it is 2.27%. As of 31 December 2021, the current value of the liability is BGN 23 thousand.
Bulgarian Energy Holding EAD rents motor vehicles for a period of two years. The present value of the lease liability
is determined based on the market value of the vehicle at the time of the lease contract conclusion in a direct sale from
the same supplier, without financing, reduced proportionally to the term of use of the asset. The calculated interest
rate for the vehicle lease is 2.0039%. As of 31 December 2021, the current value of the liability is BGN 20 thousand.
Bulgarian Energy Holding EAD has rented a part of a real estate for administrative purposes for a period of five years
with an option for extension. The monthly installment under the rental contract amounts to BGN 4 thousand, excl.
VAT. To determine the present value of the lease liability, Bulgarian Energy Holding EAD has used a discount rate
of 2.45%, which is an interest rate obtained by the company in financing its own activities in the last year and
corresponds to the market levels. As of 31 December 2021, the current value of the liability is BGN 431 thousand.
The assets are used only by the company and there are no sublease contracts.
- Depreciation costs in the amount to BGN 259 thousand;
- Interest expenses amounting to BGN 96 thousand.
The total lease cash flow in 2022 was as follows:
- Payments related to lease contracts – BGN 380 thousand.
Others
The latest tax inspections of the Company were carried out by the tax administration as follows:
• Corporate tax – until 31 December 2020;
• VAT – until 31 December 2020;
• Personal income tax – until 31 December 2008;
• Social security – until 31 December 2008.
The Company’s management does not consider that there are significant risks resulting from the dynamic fiscal and
regulatory environment in Bulgaria that would require adjustments to the financial statements for the year ended on
31 December 2022.
35.Financial risk management objectives and policy
The Company owns financial assets consisting of trade receivables, loans granted to subsidiaries, cash and short-term
deposits that arise directly from the activity.
The financial liabilities of the Company include bond issues, related-party loans and trade payables. The main purpose
of the loans is to provide financing to the Company activity.
In 2022, as well as in 2021, the Company did not own or trade with derivative financial instruments.
The main risks arising from the Company’s financial instruments are liquidity risk, currency risk and credit risk.
Current risks are identified, measured and monitored using various control mechanisms introduced to determine
adequate prices for the services offered by the Company, as well as to adequately assess the market circumstances of
the investments made by it and the forms of maintenance of the free liquidity, without allowing an unjustified
concentration of risk and others. The Company’s risk management is currently conducted by the management and the
relevant structural units, depending on the type and specificity of the different kind of risk to which the Company is
exposed in its activities.
Bulgarian Energy Holding EAD
Separate financial statement
31 December 2022
58
35.1 Categories of financial instruments
The carrying amounts of financial assets and liabilities of the Company may be presented in the following categories:
31 December 31 December
Financial assets 2022 2021
BGN’000 BGN’000
Financial assets at fair value through other comprehensive income:
Publicly traded shares 656 568
Debt instruments, at amortised cost
Loans granted to related parties 1,638,213 2,368,423
Trade receivables from related parties 12,221 47,167
Trade and other receivables, incl. from Toplofikatsia Sofia EAD 46,306 287,186
1,696,740 2,702,776
Cash and cash equivalents 2,289,617 730,011
3,987,013 3,433,355
31 December 31 December
Financial liabilities 2022 2021
BGN’000 BGN’000
Financial liabilities, reported at amortised cost:
Bond issues 2,375,579 2,374,247
Loan from the European Investment Bank 215,379 176,174
Loans from related parties 213,228 -
Trade and other liabilities 3,548 3,161
Trade liabilities to related parties 3 3,123
2,807,737 2,556,705
Refer to note 4.9 for information on the accounting policy for each class of financial instruments. The methods used
to evaluate the fair values of financial assets and liabilities at fair value are disclosed in note 4.9. A description of the
policy and the purposes for the risk management of the Company regarding financial instruments is presented below.
35.2 Liquidity risk
Liquidity risk arises if the Company fails to meet its obligations when they become due. The Company applies an
approach that provides the necessary liquidity to meet the obligations under normal or stressful conditions, without
incurring unacceptable losses.
One of the objectives of the holding is to provide, if necessary, financial resources to the subsidiaries to maintain their
operating activities, as well as to implement strategic projects.
The Company finances the operating activities of the companies in the group in two ways:
• Internal financing, within the economic group, by redistribution of the free cash resource. Bulgarian Energy
Holding EAD acts as an intermediary between the companies by coordinating the relations between them, or
accepting free-cash resources and granting such to the company in need by monitoring the transactions at
market levels. Granting cash (loans) to companies is made under the same conditions under which the resources
have been received from the subsidiaries plus, a relevant spread.
Interest rates on money loans and deposits are based on market levels. The interest rate conditions of currency
loans and deposits are tied to a percentage that is the market rate for similar transactions in the transaction
period (floating or fixed).
• External financing – in case of shortage of funds in the economic group, Bulgarian Energy Holding EAD may
undertake external financing actions. This is a preferred way to raise funds for the implementation of investment
projects. For the period 2013 - 2021, the Company successfully placed four bond issues on the Irish Stock
Exchange and the funds were used to finance investment costs and refinancing liabilities.
As at 31 December 2022, the maturity structure of the financial liabilities of the Company, based on the agreed
Separate financial statement
31 December 2022
58
35.1 Categories of financial instruments
The carrying amounts of financial assets and liabilities of the Company may be presented in the following categories:
31 December 31 December
Financial assets 2022 2021
BGN’000 BGN’000
Financial assets at fair value through other comprehensive income:
Publicly traded shares 656 568
Debt instruments, at amortised cost
Loans granted to related parties 1,638,213 2,368,423
Trade receivables from related parties 12,221 47,167
Trade and other receivables, incl. from Toplofikatsia Sofia EAD 46,306 287,186
1,696,740 2,702,776
Cash and cash equivalents 2,289,617 730,011
3,987,013 3,433,355
31 December 31 December
Financial liabilities 2022 2021
BGN’000 BGN’000
Financial liabilities, reported at amortised cost:
Bond issues 2,375,579 2,374,247
Loan from the European Investment Bank 215,379 176,174
Loans from related parties 213,228 -
Trade and other liabilities 3,548 3,161
Trade liabilities to related parties 3 3,123
2,807,737 2,556,705
Refer to note 4.9 for information on the accounting policy for each class of financial instruments. The methods used
to evaluate the fair values of financial assets and liabilities at fair value are disclosed in note 4.9. A description of the
policy and the purposes for the risk management of the Company regarding financial instruments is presented below.
35.2 Liquidity risk
Liquidity risk arises if the Company fails to meet its obligations when they become due. The Company applies an
approach that provides the necessary liquidity to meet the obligations under normal or stressful conditions, without
incurring unacceptable losses.
One of the objectives of the holding is to provide, if necessary, financial resources to the subsidiaries to maintain their
operating activities, as well as to implement strategic projects.
The Company finances the operating activities of the companies in the group in two ways:
• Internal financing, within the economic group, by redistribution of the free cash resource. Bulgarian Energy
Holding EAD acts as an intermediary between the companies by coordinating the relations between them, or
accepting free-cash resources and granting such to the company in need by monitoring the transactions at
market levels. Granting cash (loans) to companies is made under the same conditions under which the resources
have been received from the subsidiaries plus, a relevant spread.
Interest rates on money loans and deposits are based on market levels. The interest rate conditions of currency
loans and deposits are tied to a percentage that is the market rate for similar transactions in the transaction
period (floating or fixed).
• External financing – in case of shortage of funds in the economic group, Bulgarian Energy Holding EAD may
undertake external financing actions. This is a preferred way to raise funds for the implementation of investment
projects. For the period 2013 - 2021, the Company successfully placed four bond issues on the Irish Stock
Exchange and the funds were used to finance investment costs and refinancing liabilities.
As at 31 December 2022, the maturity structure of the financial liabilities of the Company, based on the agreed
Bulgarian Energy Holding EAD
Separate financial statement
31 December 2022
59
undiscounted payments, is presented below:
As of 31 December
2022
Carrying
amount
Agreed cash
flows
6 months
or less
6-12
months
1-2
years 2-5 years Over 5
years
BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
Bond issues 2,375,579 2,642,718 41,072 28,751 69,823 1,300,823 1,202,249
Loan from EIB 215,379 240,685 887 887 1,774 23,402 213,735
Loans from related
parties 213,228 214,850 181,420 5,572 11,143 16,715 -
Trade and other
liabilities 3,548 3,572 915 2,201 77 155 224
Trade liabilities to
related parties 3 3 3 - - - -
2,807,737 3,101,828 224,297 37,411 82,817 1,341,095 1,416,208
As of 31
December 2022
Carrying
amount
Agreed cash
flows
6 months or
less
6-12
months
1-2
years 2-5 years Over 5
years
BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
Bond issues 2,374,247 2,856,295 41,072 28,751 69,823 1,514,400 1,202,249
Loan from EIB 176,174 61,452 325 325 152 1,887 58,763
Trade and other
liabilities 3,161 194,527 926 2,197 650 1,950 188,804
Trade liabilities to
related parties 3,123 3,927 172 143 285 855 2,472
2,556,705 3,116,201 42,495 31,416 70,910 1,519,092 1,452,288
35.3 Interest rate risk
The Company is exposed to risks from changes in market interest rates primarily on financial assets and liabilities
with variable (floating) interest rate.
In the structure of the Company’s assets, interest -bearing assets are represented by cash, bank deposits and loans
granted, the majority of which have a fixed interest rate. The Company also has loans with a combined structure of
interest rates on loans, which contains two components – fixed and variable. The policy of the Company is to grant
cash at a fixed interest rate higher than that of the borrowed funds, including renegotiation of interest rates on existing
loans. This also minimizes the likelihood of an unfavourable change in cash flows. The borrowings of the Company
are in the form of long-term and short-term loans and have a fixed interest rate.
The following table illustrates the sensitivity of the annual net financial result after tax and of equity to a possible
change in interest rates on loans with a floating rate based on BIR in Bulgaria, amounting to +/- 0.01 % (for 2021 +/-
0.01%). These changes are considered probable based on observations of current market conditions. The calculations
are based on the change in the average market interest rate and the financial instruments held by the Company at the
end of the reporting period, which are sensitive to changes in the interest rate. All other parameters are accepted as
constant. There is no effect on other components of the Company’s equity.
Effect on net financial result after taxes
Interest rate increase Interest rate decrease
BGN’000 BGN’000
2022
Receivables from Toplofikatsia Sofia EAD,
bound by the BIR 7 (7)
2021
Receivables from Toplofikatsia Sofia EAD,
bound by the BIR 35 (35)
35.4 Currency risk
As of 31 December 2022, the Company has liabilities in currencies, other than BGN. During the year, the Company
also performed transactions in EUR in connection with absorbed bond issues, purchase of greenhouse gas emission
allowances, technical and other services received. The currency risk for these transactions related to possible
fluctuations in the foreign exchange rate is minimal due to the existence of a fixed exchange rate of the EUR to the
BGN, set by BNB. Bulgarian Energy Holding EAD also owns financial assets at fair value through other
Separate financial statement
31 December 2022
59
undiscounted payments, is presented below:
As of 31 December
2022
Carrying
amount
Agreed cash
flows
6 months
or less
6-12
months
1-2
years 2-5 years Over 5
years
BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
Bond issues 2,375,579 2,642,718 41,072 28,751 69,823 1,300,823 1,202,249
Loan from EIB 215,379 240,685 887 887 1,774 23,402 213,735
Loans from related
parties 213,228 214,850 181,420 5,572 11,143 16,715 -
Trade and other
liabilities 3,548 3,572 915 2,201 77 155 224
Trade liabilities to
related parties 3 3 3 - - - -
2,807,737 3,101,828 224,297 37,411 82,817 1,341,095 1,416,208
As of 31
December 2022
Carrying
amount
Agreed cash
flows
6 months or
less
6-12
months
1-2
years 2-5 years Over 5
years
BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
Bond issues 2,374,247 2,856,295 41,072 28,751 69,823 1,514,400 1,202,249
Loan from EIB 176,174 61,452 325 325 152 1,887 58,763
Trade and other
liabilities 3,161 194,527 926 2,197 650 1,950 188,804
Trade liabilities to
related parties 3,123 3,927 172 143 285 855 2,472
2,556,705 3,116,201 42,495 31,416 70,910 1,519,092 1,452,288
35.3 Interest rate risk
The Company is exposed to risks from changes in market interest rates primarily on financial assets and liabilities
with variable (floating) interest rate.
In the structure of the Company’s assets, interest -bearing assets are represented by cash, bank deposits and loans
granted, the majority of which have a fixed interest rate. The Company also has loans with a combined structure of
interest rates on loans, which contains two components – fixed and variable. The policy of the Company is to grant
cash at a fixed interest rate higher than that of the borrowed funds, including renegotiation of interest rates on existing
loans. This also minimizes the likelihood of an unfavourable change in cash flows. The borrowings of the Company
are in the form of long-term and short-term loans and have a fixed interest rate.
The following table illustrates the sensitivity of the annual net financial result after tax and of equity to a possible
change in interest rates on loans with a floating rate based on BIR in Bulgaria, amounting to +/- 0.01 % (for 2021 +/-
0.01%). These changes are considered probable based on observations of current market conditions. The calculations
are based on the change in the average market interest rate and the financial instruments held by the Company at the
end of the reporting period, which are sensitive to changes in the interest rate. All other parameters are accepted as
constant. There is no effect on other components of the Company’s equity.
Effect on net financial result after taxes
Interest rate increase Interest rate decrease
BGN’000 BGN’000
2022
Receivables from Toplofikatsia Sofia EAD,
bound by the BIR 7 (7)
2021
Receivables from Toplofikatsia Sofia EAD,
bound by the BIR 35 (35)
35.4 Currency risk
As of 31 December 2022, the Company has liabilities in currencies, other than BGN. During the year, the Company
also performed transactions in EUR in connection with absorbed bond issues, purchase of greenhouse gas emission
allowances, technical and other services received. The currency risk for these transactions related to possible
fluctuations in the foreign exchange rate is minimal due to the existence of a fixed exchange rate of the EUR to the
BGN, set by BNB. Bulgarian Energy Holding EAD also owns financial assets at fair value through other
Bulgarian Energy Holding EAD
Separate financial statement
31 December 2022
60
comprehensive income, including stock exchange traded shares of a Romanian company, but due to the amount of the
capital investment, the management believes that currency risk is insignificant.
35.5 Credit risk
In performing its activities, the Company is exposed to credit risk, which is related to the risk that some of its
counterparties will not be able to fully meet their obligations in the usual timeframe. The receivables of the Company
are presented in the statement of financial position in net amount, after deduction of the accrued impairment. Such
impairments are made for those receivables where and when there were events identifying losses from uncollectibility
based on previous experience.
The Company has a significant concentration of credit risk associated with receivables from related companies and
commercial counterparties under cession contracts. The Company undertakes the following precautionary measures:
• on the loan contracts - lien of machinery and equipment, mortgages on property and others;
• for commercial and other receivables that are overdue and when they arose they were not secured, deferred
payment arrangements are concluded and collateral is agreed at an amount not less than the initially
recognized amount of the receivable;
• on the other contracts that were not previously secured, the following usual actions are taken in case of
overdue payment – offsetting of liabilities to the Company against overdue receivables from the same, and
if the amount of the debts does not cover the receivable, other out-of-court opportunities to settle the
receivables are sought.
The Company is currently monitoring and analyzing the servicing of the receivables, the reasons for the defaults and
the changes in the financial capacity of debtor companies, and the status and quality of the collaterals received is
controlled.
Exposure to credit risk
The Company’s maximum credit exposure for recognized financial assets amounts to their respective carrying amount
in the statement of financial position as at 31 December 2022:
31 December
2022
31 December
2021
Financial assets
BGN’000 BGN’000
Financial assets at fair value through other comprehensive income 656 568
Debt instruments at amortised cost, that are not purchased or
originally created assets with credit impairment 830,713 533,205
Debt instruments, at amortised cost, that are purchased or originally
created assets with credit impairment 866,027 2,169,571
Cash 2,289,617 730,011
3,987,013 3,433,355
The Company has a significant concentration of credit risk due to receivables from loans granted to related entities
and receivables from Toplofikatsia Sofia EAD under long-term cession contracts.
The following table contains information about the exposure to credit risk for trade loans receivables from related and
unrelated parties of the Company as of 31 December 2022 and 31 December 2021.
Separate financial statement
31 December 2022
60
comprehensive income, including stock exchange traded shares of a Romanian company, but due to the amount of the
capital investment, the management believes that currency risk is insignificant.
35.5 Credit risk
In performing its activities, the Company is exposed to credit risk, which is related to the risk that some of its
counterparties will not be able to fully meet their obligations in the usual timeframe. The receivables of the Company
are presented in the statement of financial position in net amount, after deduction of the accrued impairment. Such
impairments are made for those receivables where and when there were events identifying losses from uncollectibility
based on previous experience.
The Company has a significant concentration of credit risk associated with receivables from related companies and
commercial counterparties under cession contracts. The Company undertakes the following precautionary measures:
• on the loan contracts - lien of machinery and equipment, mortgages on property and others;
• for commercial and other receivables that are overdue and when they arose they were not secured, deferred
payment arrangements are concluded and collateral is agreed at an amount not less than the initially
recognized amount of the receivable;
• on the other contracts that were not previously secured, the following usual actions are taken in case of
overdue payment – offsetting of liabilities to the Company against overdue receivables from the same, and
if the amount of the debts does not cover the receivable, other out-of-court opportunities to settle the
receivables are sought.
The Company is currently monitoring and analyzing the servicing of the receivables, the reasons for the defaults and
the changes in the financial capacity of debtor companies, and the status and quality of the collaterals received is
controlled.
Exposure to credit risk
The Company’s maximum credit exposure for recognized financial assets amounts to their respective carrying amount
in the statement of financial position as at 31 December 2022:
31 December
2022
31 December
2021
Financial assets
BGN’000 BGN’000
Financial assets at fair value through other comprehensive income 656 568
Debt instruments at amortised cost, that are not purchased or
originally created assets with credit impairment 830,713 533,205
Debt instruments, at amortised cost, that are purchased or originally
created assets with credit impairment 866,027 2,169,571
Cash 2,289,617 730,011
3,987,013 3,433,355
The Company has a significant concentration of credit risk due to receivables from loans granted to related entities
and receivables from Toplofikatsia Sofia EAD under long-term cession contracts.
The following table contains information about the exposure to credit risk for trade loans receivables from related and
unrelated parties of the Company as of 31 December 2022 and 31 December 2021.
Bulgarian Energy Holding EAD
Separate financial statement
31 December 2022
61
31 December 2022 Gross exposure
to credit risk
Impairment of
expected credit
loss and
corrective
interest
Net exposure Impairment rate
for credit losses
BGN’000 BGN’000 BGN’000 BGN’000
Loans granted to related parties that
are not assets originally created with
credit impairment
1,673,526 (901,339) 772,187 53,86%
Receivables from Toplofikatsia
Sofia EAD 593,255 (546,963) 46,292 92,20%
31 December 2022 Nominal
exposure to
credit risk
Adjustment
to fair value
and discount
Impairment
for expected
credit loss
and interest
rate
adjustments
Net
exposure
Rate of fair
value
adjustment,
discount, and
impairment
for expected
credit losses
BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
Loans granted to related parties that
were originally assets originally
created with credit impairment
1,496,210 (630,184) - 866,026 42.12%
Receivables from Toplofikatsia
Sofia EAD, that are not assets
originally created with credit
impairment
342,435 (107,056) (235,379) - 100.00%
31 December 2021 Gross exposure
to credit risk
Impairment of
expected credit
loss and
corrective
interest
Net exposure
Impairment
rate for credit
losses
BGN’000 BGN’000 BGN’000 BGN’000
Loans granted to related parties that
were assets originally created with
credit impairment
213,634 (14,782) 198,852 6.92%
Receivables from Toplofikatsia Sofia
EAD 950,787 (663,612) 287,175 69.80%
31 December 2021
Nominal
exposure to
credit risk
Fair value
adjustment and
discount
Net exposure
Fair value
adjustment and
discount
BGN’000 BGN’000 BGN’000 BGN’000
Loans granted to related parties that
were assets originally created with
credit impairment
3,386,432 (1,216,861) 2,169,571 35.93%
As of 31 December 2022, the Company has a significant concentration of trade receivables and loans to the following
partners:
Separate financial statement
31 December 2022
61
31 December 2022 Gross exposure
to credit risk
Impairment of
expected credit
loss and
corrective
interest
Net exposure Impairment rate
for credit losses
BGN’000 BGN’000 BGN’000 BGN’000
Loans granted to related parties that
are not assets originally created with
credit impairment
1,673,526 (901,339) 772,187 53,86%
Receivables from Toplofikatsia
Sofia EAD 593,255 (546,963) 46,292 92,20%
31 December 2022 Nominal
exposure to
credit risk
Adjustment
to fair value
and discount
Impairment
for expected
credit loss
and interest
rate
adjustments
Net
exposure
Rate of fair
value
adjustment,
discount, and
impairment
for expected
credit losses
BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
Loans granted to related parties that
were originally assets originally
created with credit impairment
1,496,210 (630,184) - 866,026 42.12%
Receivables from Toplofikatsia
Sofia EAD, that are not assets
originally created with credit
impairment
342,435 (107,056) (235,379) - 100.00%
31 December 2021 Gross exposure
to credit risk
Impairment of
expected credit
loss and
corrective
interest
Net exposure
Impairment
rate for credit
losses
BGN’000 BGN’000 BGN’000 BGN’000
Loans granted to related parties that
were assets originally created with
credit impairment
213,634 (14,782) 198,852 6.92%
Receivables from Toplofikatsia Sofia
EAD 950,787 (663,612) 287,175 69.80%
31 December 2021
Nominal
exposure to
credit risk
Fair value
adjustment and
discount
Net exposure
Fair value
adjustment and
discount
BGN’000 BGN’000 BGN’000 BGN’000
Loans granted to related parties that
were assets originally created with
credit impairment
3,386,432 (1,216,861) 2,169,571 35.93%
As of 31 December 2022, the Company has a significant concentration of trade receivables and loans to the following
partners:
Bulgarian Energy Holding EAD
Separate financial statement
31 December 2022
62
As of 31 December 2022 Internal credit risk
categorisation
Expected credit
losses (IFRS 9)
Relative share
of the claim to
the carrying
amount of all
receivables, %
Natsionalna Elektricheska Kompania EAD Phase 3 For the whole life 29%
Natsionalna Elektricheska Kompania EAD
Assets originally
created with credit
impairment For the whole life 46%
TPP Maritsa East 2 EAD
Assets originally
created with credit
impairment For the whole life 5%
Bulgargaz EAD Phase 3 For the whole life 1%
Toplofikatsia Sofia EAD Phase 3 For the whole life 3%
Toplofikatsia Sofia EAD
Assets originally
created with credit
impairment For the whole life 0%
At 31 December 2021 Internal
categorization of the
credit risk
Expected
credit losses
(IFRS 9)
Relative share of
the receivable to
the carrying
amount of all
receivables, %
Natsionalna Elektricheska Kompania EAD Phase 3 For the whole life 1%
Natsionalna Elektricheska Kompania EAD Assets originally
created with credit
impairment For the whole life 47%
TPP Maritsa East 2 EAD Assets originally
created with credit
impairment For the whole life 33%
Toplofikatsia Sofia EAD Phase 3 For the whole life 11%
The high concentration of trade receivables and loans to Natsionalna Elektricheska Kompania EAD and TPP Maritsa
East 2 EAD is due to the support provided by BEH EAD in its capacity as a parent company and financial holding
engaged in stabilizing the financial position of the two companies, in view of their key position in the security and
stability of the Bulgarian power system. Given the importance and strategic significance of the activities performed
by Natsionalna Elektricheska Kompania EAD and TPP Maritsa East 2 EAD, Bulgarian Energy Holding will continue
its actions aimed at stabilizing their financial condition.
Age analysis of the debt instruments at amortized cost on 31 st December is presented below:
Separate financial statement
31 December 2022
62
As of 31 December 2022 Internal credit risk
categorisation
Expected credit
losses (IFRS 9)
Relative share
of the claim to
the carrying
amount of all
receivables, %
Natsionalna Elektricheska Kompania EAD Phase 3 For the whole life 29%
Natsionalna Elektricheska Kompania EAD
Assets originally
created with credit
impairment For the whole life 46%
TPP Maritsa East 2 EAD
Assets originally
created with credit
impairment For the whole life 5%
Bulgargaz EAD Phase 3 For the whole life 1%
Toplofikatsia Sofia EAD Phase 3 For the whole life 3%
Toplofikatsia Sofia EAD
Assets originally
created with credit
impairment For the whole life 0%
At 31 December 2021 Internal
categorization of the
credit risk
Expected
credit losses
(IFRS 9)
Relative share of
the receivable to
the carrying
amount of all
receivables, %
Natsionalna Elektricheska Kompania EAD Phase 3 For the whole life 1%
Natsionalna Elektricheska Kompania EAD Assets originally
created with credit
impairment For the whole life 47%
TPP Maritsa East 2 EAD Assets originally
created with credit
impairment For the whole life 33%
Toplofikatsia Sofia EAD Phase 3 For the whole life 11%
The high concentration of trade receivables and loans to Natsionalna Elektricheska Kompania EAD and TPP Maritsa
East 2 EAD is due to the support provided by BEH EAD in its capacity as a parent company and financial holding
engaged in stabilizing the financial position of the two companies, in view of their key position in the security and
stability of the Bulgarian power system. Given the importance and strategic significance of the activities performed
by Natsionalna Elektricheska Kompania EAD and TPP Maritsa East 2 EAD, Bulgarian Energy Holding will continue
its actions aimed at stabilizing their financial condition.
Age analysis of the debt instruments at amortized cost on 31 st December is presented below:
Bulgarian Energy Holding EAD
Separate financial statement
31 December 2022
63
31 December 2022 Not due From 0-180
days
From 180-360
days Over 360 days Total
BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
Gross value of related party loans
granted 3,169, 737 - - - 3,169, 737
Fair value and discount corrective (630,184) - - - (630,184)
Loss from modification (55) - - - (55)
Impairment (901,285) - - - (901,285)
1,638, 213 - - - 1,638, 213
Gross value of related party trade
receivables 29,904 - - - 29,904
Impairment (17,683) - - - (17,683)
12,221 - - - 12,221
Gross value of trade and other
receivables 10,970 - - - 10,970
Impairment (10,956) - - - (10,956)
14 - - - 14
Gross value of receivables from
Toplofikatsia Sofia EAD 812,202 36,051 24,948 13,517 886,718
Adjustments for impairments and
modifications (765,910) (36,051) (24,948) (13,517) (840,426)
46,292 - - - 46,292
Net value of loans and receivables 1,696,740 - - - 1,696,740
31 December 2021 Not due From 0-180
days
From 180-360
days Over 360 days Total
BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
Gross value of related party loans
granted 3,600,066 - - - 3,600,066
Fair value and discount corrective (1,216,861) - - - (1,216,861)
Loss from modification (86) - - - (86)
Impairment (14,696) - - - (14,696)
2,368,423 - - - 2,368,423
Gross value of related party trade
receivables 62,165 - - - 62,165
Impairment (14,998) - - - (14,998)
47,167 - - - 47,167
Gross value of trade and other
receivables 11,049 - - - 11,049
Impairment (11,038) - - - (11,038)
11 - - - 11
Gross value of receivables from
Toplofikatsia Sofia EAD 514,366 228,828 31,903 110,179 934,248
Adjustments for impairments and
modifications (276,163) (228,828) (31,903) (110,179) (647,073)
287,175 - - - 287,175
Net value of loans and receivables 2,702,776 - - - 2,702,776
Separate financial statement
31 December 2022
63
31 December 2022 Not due From 0-180
days
From 180-360
days Over 360 days Total
BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
Gross value of related party loans
granted 3,169, 737 - - - 3,169, 737
Fair value and discount corrective (630,184) - - - (630,184)
Loss from modification (55) - - - (55)
Impairment (901,285) - - - (901,285)
1,638, 213 - - - 1,638, 213
Gross value of related party trade
receivables 29,904 - - - 29,904
Impairment (17,683) - - - (17,683)
12,221 - - - 12,221
Gross value of trade and other
receivables 10,970 - - - 10,970
Impairment (10,956) - - - (10,956)
14 - - - 14
Gross value of receivables from
Toplofikatsia Sofia EAD 812,202 36,051 24,948 13,517 886,718
Adjustments for impairments and
modifications (765,910) (36,051) (24,948) (13,517) (840,426)
46,292 - - - 46,292
Net value of loans and receivables 1,696,740 - - - 1,696,740
31 December 2021 Not due From 0-180
days
From 180-360
days Over 360 days Total
BGN’000 BGN’000 BGN’000 BGN’000 BGN’000
Gross value of related party loans
granted 3,600,066 - - - 3,600,066
Fair value and discount corrective (1,216,861) - - - (1,216,861)
Loss from modification (86) - - - (86)
Impairment (14,696) - - - (14,696)
2,368,423 - - - 2,368,423
Gross value of related party trade
receivables 62,165 - - - 62,165
Impairment (14,998) - - - (14,998)
47,167 - - - 47,167
Gross value of trade and other
receivables 11,049 - - - 11,049
Impairment (11,038) - - - (11,038)
11 - - - 11
Gross value of receivables from
Toplofikatsia Sofia EAD 514,366 228,828 31,903 110,179 934,248
Adjustments for impairments and
modifications (276,163) (228,828) (31,903) (110,179) (647,073)
287,175 - - - 287,175
Net value of loans and receivables 2,702,776 - - - 2,702,776
Bulgarian Energy Holding EAD
Separate financial statement
31 December 2022
64
The change in impairment of expected credit losses of the loans and receivables during the year is as follows:
31 December
2022
31 December
2021
BGN’000 BGN’000
Impairment as at 1 January 687,805 1,195, 327
Reintegration of impairments (note 8) (45,692) (6,730)
Impairment charge (note 8) 1,176, 898 531,754
Write-off impairment (122,965) (1,032,546)
Impairment as at 31 December 1,696,046 687,805
36. Fair value measurement
The Company classifies assets and liabilities at fair value into three levels based on the significance of the inputs used
in determining the fair value of financial assets and liabilities. The hierarchy of fair value includes the following levels:
• Level 1: quoted prices (unadjusted) on active markets for identical assets or liabilities;
• Level 2: input other than quoted prices included in Level 1 that can be monitored in respect of an asset or
liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
• Level 3: input for an asset or liability that is not based on observable market data.
An asset or liability is classified to the lowest level of significant input used to determine its fair value.
36.1 Fair value measurement of financial instruments
Financial assets measured at fair value in the statement of financial position are grouped into the following categories
according to the fair value hierarchy:
Level 1
31 December
2022
31 December
2021
BGN’000 BGN’000
Financial assets at fair value
through other comprehensive income
Publicly traded shares 654 566
The measurement methods and techniques used in determining fair value have not changed compared to the previous
reporting period. The Company owns 6,041 shares of Transgaz S.A., Romania, which are traded on the Romanian
Stock Exchange. The investment is classified as a financial asset at fair value through other comprehensive income,
and is presented in BGN. The fair values as at 31 December 2022 and 31 December 2021 were determined on the
basis of published quotes of active market prices.
Level 3
31 December
2022
31 December
2021
BGN’000 BGN’000
Financial assets at fair value
through other comprehensive income
Shares which are not traded on the stock exchange and are not
based on observed market prices 2 2
The Company holds 10,000 registered shares in Balkangaz 2000 AD, Botevgrad, with nominal value of BGN 1 (one)
each. The company has a subscribed and paid-in capital in the amount of BGN 903 thousand. Bulgarian Energy
Holding EAD (previously, Bulgargaz EAD) is a shareholder since the incorporation of the company in 2000. The
investment of Bulgarian Energy Holding EAD in Balkangaz 2000 AD was impaired and derecognized from the
Separate financial statement
31 December 2022
64
The change in impairment of expected credit losses of the loans and receivables during the year is as follows:
31 December
2022
31 December
2021
BGN’000 BGN’000
Impairment as at 1 January 687,805 1,195, 327
Reintegration of impairments (note 8) (45,692) (6,730)
Impairment charge (note 8) 1,176, 898 531,754
Write-off impairment (122,965) (1,032,546)
Impairment as at 31 December 1,696,046 687,805
36. Fair value measurement
The Company classifies assets and liabilities at fair value into three levels based on the significance of the inputs used
in determining the fair value of financial assets and liabilities. The hierarchy of fair value includes the following levels:
• Level 1: quoted prices (unadjusted) on active markets for identical assets or liabilities;
• Level 2: input other than quoted prices included in Level 1 that can be monitored in respect of an asset or
liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
• Level 3: input for an asset or liability that is not based on observable market data.
An asset or liability is classified to the lowest level of significant input used to determine its fair value.
36.1 Fair value measurement of financial instruments
Financial assets measured at fair value in the statement of financial position are grouped into the following categories
according to the fair value hierarchy:
Level 1
31 December
2022
31 December
2021
BGN’000 BGN’000
Financial assets at fair value
through other comprehensive income
Publicly traded shares 654 566
The measurement methods and techniques used in determining fair value have not changed compared to the previous
reporting period. The Company owns 6,041 shares of Transgaz S.A., Romania, which are traded on the Romanian
Stock Exchange. The investment is classified as a financial asset at fair value through other comprehensive income,
and is presented in BGN. The fair values as at 31 December 2022 and 31 December 2021 were determined on the
basis of published quotes of active market prices.
Level 3
31 December
2022
31 December
2021
BGN’000 BGN’000
Financial assets at fair value
through other comprehensive income
Shares which are not traded on the stock exchange and are not
based on observed market prices 2 2
The Company holds 10,000 registered shares in Balkangaz 2000 AD, Botevgrad, with nominal value of BGN 1 (one)
each. The company has a subscribed and paid-in capital in the amount of BGN 903 thousand. Bulgarian Energy
Holding EAD (previously, Bulgargaz EAD) is a shareholder since the incorporation of the company in 2000. The
investment of Bulgarian Energy Holding EAD in Balkangaz 2000 AD was impaired and derecognized from the
Bulgarian Energy Holding EAD
Separate financial statement
31 December 2022
65
financial statements prepared prior to 2007 due to the company's deteriorated financial position. At 31 December 2022
and 31 December 2021 the investment in the shares of Balkangaz 2000 AD is presented in the financial statement
according to IFRS 13 by using level 3 of the hierarchy of the fair values.
36.2 Fair value measurement of non-financial instruments
The following table presents the levels of the non-financial asset hierarchy at 31 st December that are periodically
measured at fair value:
31 December
2022
31 December
2021
Level 3 Level 3
BGN’000 BGN’000
Property, plant and equipment:
- land 2,160 2,160
2,160 2,160
The fair value of the Company’s immovable property is determined on the basis of reports from independent licensed
appraisers (see note 19).
Land (Level 3)
Land is measured using the market analogy method, with adjustments on derived comparable market prices. The
comparable unit market prices are adjusted to the valued sites by adjustments for the differences in their functional
and technical parameters and in the possibility of future development. Functional parameters take into account the
purpose, status, location, engineering infrastructure and transport accessibility. The technical parameters mainly take
into account the possible intensity of construction, terrain and geological features of land. The degree of development
is conditioned by the construction of the necessary technical infrastructure.
As of 31 December 2022, a fair appraisal report prepared by an independent appraiser in the amount of BGN 2,160
thousand has been determined as a fair value of the land (two properties).
37. Capital management policy and procedures
The Board of Directors’ policy is to keep a strong capital base so as to maintain the trust of customers, creditors and
the market as a whole, and to provide the grounds for business development in the future. The aim of the management
is to provide balance between higher return that may be possible with higher levels of indebtedness, and its benefits
from a strong capital position. The Company’s objective is to achieve a return on equity of more than 5%. As of 31
December 2022, the return on equity was 11.90% (31 December 2021: 6.64%). There were no changes in the
Company's capital management throughout the year.
38.Events after the reporting period
No adjusting events or significant non-adjusting events occurred between the reporting date of the financial statements
and the date of their approval for publication, except for the following:
Change in the Management of Bulgarian Energy Holding EAD
With a protocol decision of 19 January 2023, the Minister of Energy, Zheko Mihailov Zhekov, was dismissed as a
member of the Board of Directors of Bulgarian Energy Holding EAD. He was replaced by Andrey Stefanov Zhivkov
until a new competition procedure was conducted. According to the minutes of the Board of Directors' meeting on 21
January 2023, Andrey Stefanov Zhivkov was selected as the second executive director. The change was registered in
the Commercial Register and Register of Non-Profit Legal Entities at the Registry Agency on 26 January 2023.
With a protocol decision of 19 January 2023, the Minister of Energy, Stelyan Penchev Kolev, was dismissed as a
member of the Board of Directors of Bulgarian Energy Holding EAD. He was replaced by Ivo Ivanov Todorov until
a new competition procedure was conducted. The change was registered in the Commercial Register and Register of
Non-Profit Legal Entities at the Registry Agency on 27 January 2023.
With a protocol decision of the Minister of Energy dated 24 April 2023, Anton Georgiev Simeonov, Veselina
Lachezarova Kanatova-Buchkova, Angel Emilov Yankov, Andrey Stefanov Zhivkov, and Ivo Ivanov Todorov were
dismissed as members of the Board of Directors of Bulgarian Energy Holding EAD. As representatives of the State
on the Board of Directors of Bulgarian Energy Holding EAD, Angel Emilov Yankov, Andrey Stefanov Zhivkov, and
Separate financial statement
31 December 2022
65
financial statements prepared prior to 2007 due to the company's deteriorated financial position. At 31 December 2022
and 31 December 2021 the investment in the shares of Balkangaz 2000 AD is presented in the financial statement
according to IFRS 13 by using level 3 of the hierarchy of the fair values.
36.2 Fair value measurement of non-financial instruments
The following table presents the levels of the non-financial asset hierarchy at 31 st December that are periodically
measured at fair value:
31 December
2022
31 December
2021
Level 3 Level 3
BGN’000 BGN’000
Property, plant and equipment:
- land 2,160 2,160
2,160 2,160
The fair value of the Company’s immovable property is determined on the basis of reports from independent licensed
appraisers (see note 19).
Land (Level 3)
Land is measured using the market analogy method, with adjustments on derived comparable market prices. The
comparable unit market prices are adjusted to the valued sites by adjustments for the differences in their functional
and technical parameters and in the possibility of future development. Functional parameters take into account the
purpose, status, location, engineering infrastructure and transport accessibility. The technical parameters mainly take
into account the possible intensity of construction, terrain and geological features of land. The degree of development
is conditioned by the construction of the necessary technical infrastructure.
As of 31 December 2022, a fair appraisal report prepared by an independent appraiser in the amount of BGN 2,160
thousand has been determined as a fair value of the land (two properties).
37. Capital management policy and procedures
The Board of Directors’ policy is to keep a strong capital base so as to maintain the trust of customers, creditors and
the market as a whole, and to provide the grounds for business development in the future. The aim of the management
is to provide balance between higher return that may be possible with higher levels of indebtedness, and its benefits
from a strong capital position. The Company’s objective is to achieve a return on equity of more than 5%. As of 31
December 2022, the return on equity was 11.90% (31 December 2021: 6.64%). There were no changes in the
Company's capital management throughout the year.
38.Events after the reporting period
No adjusting events or significant non-adjusting events occurred between the reporting date of the financial statements
and the date of their approval for publication, except for the following:
Change in the Management of Bulgarian Energy Holding EAD
With a protocol decision of 19 January 2023, the Minister of Energy, Zheko Mihailov Zhekov, was dismissed as a
member of the Board of Directors of Bulgarian Energy Holding EAD. He was replaced by Andrey Stefanov Zhivkov
until a new competition procedure was conducted. According to the minutes of the Board of Directors' meeting on 21
January 2023, Andrey Stefanov Zhivkov was selected as the second executive director. The change was registered in
the Commercial Register and Register of Non-Profit Legal Entities at the Registry Agency on 26 January 2023.
With a protocol decision of 19 January 2023, the Minister of Energy, Stelyan Penchev Kolev, was dismissed as a
member of the Board of Directors of Bulgarian Energy Holding EAD. He was replaced by Ivo Ivanov Todorov until
a new competition procedure was conducted. The change was registered in the Commercial Register and Register of
Non-Profit Legal Entities at the Registry Agency on 27 January 2023.
With a protocol decision of the Minister of Energy dated 24 April 2023, Anton Georgiev Simeonov, Veselina
Lachezarova Kanatova-Buchkova, Angel Emilov Yankov, Andrey Stefanov Zhivkov, and Ivo Ivanov Todorov were
dismissed as members of the Board of Directors of Bulgarian Energy Holding EAD. As representatives of the State
on the Board of Directors of Bulgarian Energy Holding EAD, Angel Emilov Yankov, Andrey Stefanov Zhivkov, and
Bulgarian Energy Holding EAD
Separate financial statement
31 December 2022
66
Ivo Ivanov Todorov were elected for a period of three years. Veselina Lachezarova Kanatova-Buchkova and Kalin
Boyanov Filipov were elected as independent members for a period of three years.
With a protocol decision of the Board of Directors dated 24 April 2023, Andrey Stefanov Zhivkov was chosen as the
second executive officer. The change was registered in the Commercial Register and Register of Non-Profit Legal
Entities at the Registry Agency on 2 May 2023.
Loan agreements with related parties
In January 2023, the subsidiary TPP Maritsa East 2 EAD made an early repayment of its liability under a loan
agreement dated 6 December 2021, in the amount of BGN 82,189 thousand, thereby completing the contract.
In March 2023, the subsidiary Bulgargaz EAD made an early repayment of its liability under a loan agreement dated
25 February 2022, in the amount of BGN 200,000 thousand, resulting in the termination of the contract.
On 3 April 2023, a loan agreement was concluded between Bulgarian Energy Holding EAD and Bulgargaz EAD in
the form of a credit line for the repayment of liabilities under contracts for natural gas delivery concluded between
Bulgargaz EAD and suppliers under the following conditions:
- Limit: BGN 200,000,000 (two hundred million);
- Validity: 12 months from the date of contract execution;
- Interest rate: 3.275% per annum on the utilized amount.
As of the date of the financial statement, the funds have not been utilized.
On 17 February 2023, a loan agreement was concluded between Bulgarian Energy Holding EAD and
Bulgartransgaz ЕАD for the financing of the implementation of a public procurement project named “ Spatial planning,
investment design, delivery of necessary materials and equipment, construction, and commissioning of the project:
Capacity extension of Underground Gas Storage Chiren - drilling fund .” initiated with a decision dated 8 August 2022.
The conditions of the contract are as follows:
• Loan amount (principal): BGN 65,156,525 (sixty-five million, one hundred fifty-six thousand, five hundred
twenty-five);
• Utilization period: Up to 6 months from the date of the contract, upon submission of a request;
• Grace period for payment of the principal: 24 months from the date of utilizing the respective amount;
• Repayment term for the utilized amount: 60 months after the expiration of the grace period for principal
payment;
• Interest rate: 3.275% per year.
On 10 March 2023, Bulgartransgaz ЕАD raised a request for further financing in the amount of up to BGN 22,370,675.
This amount represents the difference between the initially provided financial resource under the contract of 17
February 2023 and the offered price from the participant ranked second in the public procurement process. The reason
for the request is the refusal of the participant ranked first to enter into a contract with Bulgartransgaz ЕАD due to the
objective impossibility to implement the activities within the specified timeframe in the draft contract. On 7
April 2023, an annex to the contract was executed and the funds were utilized on 26 April 2023.
Credit rating
On 6 February 2023, Moody's upgraded the credit outlook of Bulgarian Energy Holding EAD from stable to positive,
confirming the Group's long-term rating at Ba1 and the rating of the non-subordinated and non-secured bonds of the
holding at Ва2. The credit rating outlook was upgraded to positive due to improved financial indicators, progress in
the liberalization of the electricity market, and the advantages that the BEH Group possesses, including its activities
in electricity production and public supply of natural gas.
On 27 March 2023, Fitch Ratings upgraded the credit rating of Bulgarian Energy Holding EAD from "BB" to "BB+"
with a stable outlook. The rating upgrade was caused by improvements in the company's individual profile, including
stable financial results, significant debt reduction, an improved regulatory framework, and strong support from the
sole shareholder - the state.
Founding a new subsidiary within the BEH Group
As a leading energy company in the country and on the Balkans, BEH Group expanded its portfolio by founding a
new company to support the efforts of the Republic of Bulgaria in reducing exhaust emissions in line with EU climate
policies and the need for investments in sustainable activities.
Separate financial statement
31 December 2022
66
Ivo Ivanov Todorov were elected for a period of three years. Veselina Lachezarova Kanatova-Buchkova and Kalin
Boyanov Filipov were elected as independent members for a period of three years.
With a protocol decision of the Board of Directors dated 24 April 2023, Andrey Stefanov Zhivkov was chosen as the
second executive officer. The change was registered in the Commercial Register and Register of Non-Profit Legal
Entities at the Registry Agency on 2 May 2023.
Loan agreements with related parties
In January 2023, the subsidiary TPP Maritsa East 2 EAD made an early repayment of its liability under a loan
agreement dated 6 December 2021, in the amount of BGN 82,189 thousand, thereby completing the contract.
In March 2023, the subsidiary Bulgargaz EAD made an early repayment of its liability under a loan agreement dated
25 February 2022, in the amount of BGN 200,000 thousand, resulting in the termination of the contract.
On 3 April 2023, a loan agreement was concluded between Bulgarian Energy Holding EAD and Bulgargaz EAD in
the form of a credit line for the repayment of liabilities under contracts for natural gas delivery concluded between
Bulgargaz EAD and suppliers under the following conditions:
- Limit: BGN 200,000,000 (two hundred million);
- Validity: 12 months from the date of contract execution;
- Interest rate: 3.275% per annum on the utilized amount.
As of the date of the financial statement, the funds have not been utilized.
On 17 February 2023, a loan agreement was concluded between Bulgarian Energy Holding EAD and
Bulgartransgaz ЕАD for the financing of the implementation of a public procurement project named “ Spatial planning,
investment design, delivery of necessary materials and equipment, construction, and commissioning of the project:
Capacity extension of Underground Gas Storage Chiren - drilling fund .” initiated with a decision dated 8 August 2022.
The conditions of the contract are as follows:
• Loan amount (principal): BGN 65,156,525 (sixty-five million, one hundred fifty-six thousand, five hundred
twenty-five);
• Utilization period: Up to 6 months from the date of the contract, upon submission of a request;
• Grace period for payment of the principal: 24 months from the date of utilizing the respective amount;
• Repayment term for the utilized amount: 60 months after the expiration of the grace period for principal
payment;
• Interest rate: 3.275% per year.
On 10 March 2023, Bulgartransgaz ЕАD raised a request for further financing in the amount of up to BGN 22,370,675.
This amount represents the difference between the initially provided financial resource under the contract of 17
February 2023 and the offered price from the participant ranked second in the public procurement process. The reason
for the request is the refusal of the participant ranked first to enter into a contract with Bulgartransgaz ЕАD due to the
objective impossibility to implement the activities within the specified timeframe in the draft contract. On 7
April 2023, an annex to the contract was executed and the funds were utilized on 26 April 2023.
Credit rating
On 6 February 2023, Moody's upgraded the credit outlook of Bulgarian Energy Holding EAD from stable to positive,
confirming the Group's long-term rating at Ba1 and the rating of the non-subordinated and non-secured bonds of the
holding at Ва2. The credit rating outlook was upgraded to positive due to improved financial indicators, progress in
the liberalization of the electricity market, and the advantages that the BEH Group possesses, including its activities
in electricity production and public supply of natural gas.
On 27 March 2023, Fitch Ratings upgraded the credit rating of Bulgarian Energy Holding EAD from "BB" to "BB+"
with a stable outlook. The rating upgrade was caused by improvements in the company's individual profile, including
stable financial results, significant debt reduction, an improved regulatory framework, and strong support from the
sole shareholder - the state.
Founding a new subsidiary within the BEH Group
As a leading energy company in the country and on the Balkans, BEH Group expanded its portfolio by founding a
new company to support the efforts of the Republic of Bulgaria in reducing exhaust emissions in line with EU climate
policies and the need for investments in sustainable activities.
Bulgarian Energy Holding EAD
Separate financial statement
31 December 2022
67
In accordance with a protocol decision of the Minister of Energy (No. Е - РД -16-8 dated 09.03.2023), BEH EAD
established a subsidiary company named National Energy Operator EAD , with its headquarters located at 16 Veslets
Str., Sofia. The scope of its activities includes the construction and operation of electrical facilities and other activities
not prohibited by law. The sole shareholder of the company's capital is Bulgarian Energy Holding EAD, with equity
of BGN 30,000,000 (thirty million). The equity is divided into 30,000,000 (thirty million) ordinary registered shares,
each with a nominal value of BGN 1 (one), provided through a monetary contribution from BEH EAD. The company
was entered into the Commercial Register of non-profit legal entities on 04.04.2023.
ESG rating
On 6 April 2023, Sustainalytics upgraded the ESG rating of BEH Group, resulting in an improvement in the overall
evaluation from 34.2 points ('high risk') to 33.9 points (“ high risk ” ). According to the rating report dated 6 April 2023,
there were changes in the assessment of BEH Group's exposure to various material risks related to ecological, social,
and managerial aspects. The evaluation of the company ’ s exposure increased from 54.3 points ( “ medium risk ” ) to
56.0 points (“ high risk ” ). Additionally, the assessment of the company's management performance in governing these
aspects improved from 39.9 points ( “ average performance ” ) to 42.7 points ( “ average performance ” ).
Separate financial statement
31 December 2022
67
In accordance with a protocol decision of the Minister of Energy (No. Е - РД -16-8 dated 09.03.2023), BEH EAD
established a subsidiary company named National Energy Operator EAD , with its headquarters located at 16 Veslets
Str., Sofia. The scope of its activities includes the construction and operation of electrical facilities and other activities
not prohibited by law. The sole shareholder of the company's capital is Bulgarian Energy Holding EAD, with equity
of BGN 30,000,000 (thirty million). The equity is divided into 30,000,000 (thirty million) ordinary registered shares,
each with a nominal value of BGN 1 (one), provided through a monetary contribution from BEH EAD. The company
was entered into the Commercial Register of non-profit legal entities on 04.04.2023.
ESG rating
On 6 April 2023, Sustainalytics upgraded the ESG rating of BEH Group, resulting in an improvement in the overall
evaluation from 34.2 points ('high risk') to 33.9 points (“ high risk ” ). According to the rating report dated 6 April 2023,
there were changes in the assessment of BEH Group's exposure to various material risks related to ecological, social,
and managerial aspects. The evaluation of the company ’ s exposure increased from 54.3 points ( “ medium risk ” ) to
56.0 points (“ high risk ” ). Additionally, the assessment of the company's management performance in governing these
aspects improved from 39.9 points ( “ average performance ” ) to 42.7 points ( “ average performance ” ).
1
INDEPENDENT AUDITORS ’ REPORT
To the sole shareholder of
Bulgarian Energy Holding EAD
Sofia, 16 Veslets Str.
Report on the Audit of the Separate Financial Statements
Qualified Opinion
We have audited the separate financial statements of Bulgarian Energy Holding EAD („ the Company “ ,
„ BEH EAD “ ), which comprise the separate statement of financial position as of 31 December 2022
and separate statement of profit or loss, separate statement of comprehensive income, separate
statement of changes in equity and separate statement of cash flows for the year then ended, and
notes to the separate financial statements, including a summary of significant accounting policies.
In our opinion, except for the possible effect of the matter described in the “Basi s for Qua lified Opinion”
section of our report, the accompanying separate financial statements give a true and fair view of the
financial position of the Company as of 31 December 2022 and of its financial performance and its
cash flows for the year then ended in accordance with International Financial Reporting Standards
(IFRS), as adopted by the EU and Bulgarian legislation.
Basis for Qualified Opinion
As of 31 December 2022, the investment in the subsidiary Bulgargaz EAD is presented at historic
cost, which is BGN 325,391 thousand and the carrying value of the investment exceeds the
subsidiary’s net assets by BGN 154,419 thousand. In 2022 BEH EAD provided loans to Bulgargaz
EAD so that the subsidiary can pay to suppliers and meet its operating needs. We were not able to
obtain reasonable assurance regarding the recoverable amount of the investment in the subsidiary
Bulgargaz EAD. Accordingly, we were not able to obtain sufficient and appropriate audit evidence to
determine whether and to what extent impairment of this investment is required as of 31 December
2022 in accordance with IAS 36 “ Impairment of assets ” .
We conducted our audit in accordance with International Standards on Auditing (ISA). Our
responsibilities under these standards are further described in the section "Auditor's Responsibilities
for the Audit of the Separate Financial Statements". We are independent of the Company in
accordance with the International Code of Ethics for Professional Accountants (including International
Independent Standards) issued by the International Ethics Standards Board for Accountants (IESBA
Code), together with the ethical requirements of Bulgarian Independent Financial Audit Act, and we
have fulfilled our other responsibilities in accordance with these requirements. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the separate financial statements of the current period. These matters were addressed in
the context of our audit of the separate financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters. In addition to the matter
described in the “Basis for Qualified Opinion” section we have determi ned the matter described below
to be the key audit matter to be communicated in our report.
INDEPENDENT AUDITORS ’ REPORT
To the sole shareholder of
Bulgarian Energy Holding EAD
Sofia, 16 Veslets Str.
Report on the Audit of the Separate Financial Statements
Qualified Opinion
We have audited the separate financial statements of Bulgarian Energy Holding EAD („ the Company “ ,
„ BEH EAD “ ), which comprise the separate statement of financial position as of 31 December 2022
and separate statement of profit or loss, separate statement of comprehensive income, separate
statement of changes in equity and separate statement of cash flows for the year then ended, and
notes to the separate financial statements, including a summary of significant accounting policies.
In our opinion, except for the possible effect of the matter described in the “Basi s for Qua lified Opinion”
section of our report, the accompanying separate financial statements give a true and fair view of the
financial position of the Company as of 31 December 2022 and of its financial performance and its
cash flows for the year then ended in accordance with International Financial Reporting Standards
(IFRS), as adopted by the EU and Bulgarian legislation.
Basis for Qualified Opinion
As of 31 December 2022, the investment in the subsidiary Bulgargaz EAD is presented at historic
cost, which is BGN 325,391 thousand and the carrying value of the investment exceeds the
subsidiary’s net assets by BGN 154,419 thousand. In 2022 BEH EAD provided loans to Bulgargaz
EAD so that the subsidiary can pay to suppliers and meet its operating needs. We were not able to
obtain reasonable assurance regarding the recoverable amount of the investment in the subsidiary
Bulgargaz EAD. Accordingly, we were not able to obtain sufficient and appropriate audit evidence to
determine whether and to what extent impairment of this investment is required as of 31 December
2022 in accordance with IAS 36 “ Impairment of assets ” .
We conducted our audit in accordance with International Standards on Auditing (ISA). Our
responsibilities under these standards are further described in the section "Auditor's Responsibilities
for the Audit of the Separate Financial Statements". We are independent of the Company in
accordance with the International Code of Ethics for Professional Accountants (including International
Independent Standards) issued by the International Ethics Standards Board for Accountants (IESBA
Code), together with the ethical requirements of Bulgarian Independent Financial Audit Act, and we
have fulfilled our other responsibilities in accordance with these requirements. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the separate financial statements of the current period. These matters were addressed in
the context of our audit of the separate financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters. In addition to the matter
described in the “Basis for Qualified Opinion” section we have determi ned the matter described below
to be the key audit matter to be communicated in our report.
2
Impairment of loans granted to related parties and receivables from “ Toplofikatsia Sofia ”
EAD
Notes 4.9.1 Financial assets, 23 Receivables from “Toplofikatsia Sofia” EAD , 32.1 Loans granted
to related parties and 35.5 Credit risk to the separate financial statements
Key audit matter How this matter was addressed during the
audit
As of 31 December 2022, Company ’ s
financial assets with carrying value BGN
3,987,013 thousand contain BGN
1,696,740 thousand of debt instruments
carried at amortised cost in accordance
with IFRS 9 “ Financial instruments ” .
Company’ s debt instruments carried at
amortised cost mainly consist of loans to
related parties with carrying value of BGN
1,638,213 thousand and receivables from
“Toplofikatsia Sofia” EAD with carrying
value of BGN 46,292 thousand. The
recoverable amount of these financial
assets is one of the main accounting
estimates used in preparing the separate
financial statements, because it requires
application of management ’ s significant
judgements, key estimates and
assumptions and these receivables
account for 23% of Company ’ s total assets.
Because of the significance of the
estimates and their related uncertainties
due to the worsened macroeconomic
environment we determined the impairment
of the loans provided to related parties and
receivables from Toplofikatsia Sofia” E AD
as key audit matter.
Note 35.5 Credit risk to the separate
financial statements discloses information
about management’ s judgements and
assumptions in determining the amount of
expected credit losses as of 31 December
2022 of Company ’ s debt instruments
carried at amortised cost.
During our audit, the audit procedures included,
but were not limited to the following:
- analysis of the adequacy of the policies and
procedures applied with respect to the
classification, subsequent measurement and
monitoring of financial assets and their
compliance with IFRS 9 and best practice,
especially the effects on financial assets of
the macroeconomic environment and the
uncertainty in the energy industry as a result
of the military conflict in Ukraine and the
sanctions imposed against the Russian
Federation;
- analysis and assessment if there are factors
indicating significant increase of credit risk
related to the debt instruments carried at
amortised cost;
- inquiries as to how and to what extent the
negative impact of the war in Ukraine, the
sanctions against the Russian Federation and
the observable external data were taken into
account by management in their assessment
of the Company ’ s expected credit losses;
- calculation of the required impairment of
individual receivables and performance of
tests of details to determine their
classification and amount;
- analysis of the financial condition of the
debtors and whether treatment of the contract
terms is appropriate;
- application of professional judgement in
assessing the key assumptions used in the
models for calculation of expected credit
losses on loans granted to related parties and
receivables from Toplofikatsia Sofia EAD;
• assessment of the adequacy of disclosures in
the separate financial statements, including
the main assumptions, judgements and
estimates as well as Company ’ s exposure to
credit risk.
Information Other than the Separate Financial Statements and Auditors ’ Report Thereon
Management is responsible for other information. Other information consists of the separate activity
report and the corporate governance statement prepared by management in accordance with the
applicable legislation requirements, but does not include the separate financial statements and our
auditors ’ report thereon.
Our opinion on the separate financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon. In connection with our audit of the separate
Impairment of loans granted to related parties and receivables from “ Toplofikatsia Sofia ”
EAD
Notes 4.9.1 Financial assets, 23 Receivables from “Toplofikatsia Sofia” EAD , 32.1 Loans granted
to related parties and 35.5 Credit risk to the separate financial statements
Key audit matter How this matter was addressed during the
audit
As of 31 December 2022, Company ’ s
financial assets with carrying value BGN
3,987,013 thousand contain BGN
1,696,740 thousand of debt instruments
carried at amortised cost in accordance
with IFRS 9 “ Financial instruments ” .
Company’ s debt instruments carried at
amortised cost mainly consist of loans to
related parties with carrying value of BGN
1,638,213 thousand and receivables from
“Toplofikatsia Sofia” EAD with carrying
value of BGN 46,292 thousand. The
recoverable amount of these financial
assets is one of the main accounting
estimates used in preparing the separate
financial statements, because it requires
application of management ’ s significant
judgements, key estimates and
assumptions and these receivables
account for 23% of Company ’ s total assets.
Because of the significance of the
estimates and their related uncertainties
due to the worsened macroeconomic
environment we determined the impairment
of the loans provided to related parties and
receivables from Toplofikatsia Sofia” E AD
as key audit matter.
Note 35.5 Credit risk to the separate
financial statements discloses information
about management’ s judgements and
assumptions in determining the amount of
expected credit losses as of 31 December
2022 of Company ’ s debt instruments
carried at amortised cost.
During our audit, the audit procedures included,
but were not limited to the following:
- analysis of the adequacy of the policies and
procedures applied with respect to the
classification, subsequent measurement and
monitoring of financial assets and their
compliance with IFRS 9 and best practice,
especially the effects on financial assets of
the macroeconomic environment and the
uncertainty in the energy industry as a result
of the military conflict in Ukraine and the
sanctions imposed against the Russian
Federation;
- analysis and assessment if there are factors
indicating significant increase of credit risk
related to the debt instruments carried at
amortised cost;
- inquiries as to how and to what extent the
negative impact of the war in Ukraine, the
sanctions against the Russian Federation and
the observable external data were taken into
account by management in their assessment
of the Company ’ s expected credit losses;
- calculation of the required impairment of
individual receivables and performance of
tests of details to determine their
classification and amount;
- analysis of the financial condition of the
debtors and whether treatment of the contract
terms is appropriate;
- application of professional judgement in
assessing the key assumptions used in the
models for calculation of expected credit
losses on loans granted to related parties and
receivables from Toplofikatsia Sofia EAD;
• assessment of the adequacy of disclosures in
the separate financial statements, including
the main assumptions, judgements and
estimates as well as Company ’ s exposure to
credit risk.
Information Other than the Separate Financial Statements and Auditors ’ Report Thereon
Management is responsible for other information. Other information consists of the separate activity
report and the corporate governance statement prepared by management in accordance with the
applicable legislation requirements, but does not include the separate financial statements and our
auditors ’ report thereon.
Our opinion on the separate financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon. In connection with our audit of the separate
3
financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or whether our
knowledge obtained in the audit may indicate that there is a material misstatement or otherwise the
other information appears to be materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required to report that
fact.
As described in the "Basis for Qualified Opinion" section of this report, we are not able to obtain
sufficient and appropriate audit evidence on the matter described in this section. Accordingly, we are
unable to conclude whether the other information does not contain material misstatement in relation
to this matter.
Responsibilities of Management and Those Charged with Governance for the Separate
Financial Statements
Management is responsible for the preparation and fair presentation of these separate financial
statements in accordance with IFRS, adopted by the EU and Bulgarian law, as well as for such
internal control system as management deems necessary to ensure the preparation of separate
financial statements that do not contain material misstatements, whether due to fraud or error.
In preparing the separate financial statements, management is responsible for assessing the
Company’s ability to continue as a going concern, disclosing, as applicable, matters relate d to going
concern and using the going concern basis of accounting unless management either intends to
liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting
process.
Auditors ’ Responsibilities for the Audit of the Separate Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs and Bulgarian Independent Financial Audit Act will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.
As part of our audit in accordance with ISAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
− identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control;
− obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company ’s internal control;
− evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management;
− conclude on the appropriateness of mana gement’s use of the going concern basis of accou nting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Company’s ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw attention
financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or whether our
knowledge obtained in the audit may indicate that there is a material misstatement or otherwise the
other information appears to be materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required to report that
fact.
As described in the "Basis for Qualified Opinion" section of this report, we are not able to obtain
sufficient and appropriate audit evidence on the matter described in this section. Accordingly, we are
unable to conclude whether the other information does not contain material misstatement in relation
to this matter.
Responsibilities of Management and Those Charged with Governance for the Separate
Financial Statements
Management is responsible for the preparation and fair presentation of these separate financial
statements in accordance with IFRS, adopted by the EU and Bulgarian law, as well as for such
internal control system as management deems necessary to ensure the preparation of separate
financial statements that do not contain material misstatements, whether due to fraud or error.
In preparing the separate financial statements, management is responsible for assessing the
Company’s ability to continue as a going concern, disclosing, as applicable, matters relate d to going
concern and using the going concern basis of accounting unless management either intends to
liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting
process.
Auditors ’ Responsibilities for the Audit of the Separate Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs and Bulgarian Independent Financial Audit Act will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.
As part of our audit in accordance with ISAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
− identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control;
− obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company ’s internal control;
− evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management;
− conclude on the appropriateness of mana gement’s use of the going concern basis of accou nting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Company’s ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw attention
4
in our auditor’s report to the related disclosures in the financial statements or, if such disclosures
are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
up to the date of our auditor’s report. However, future events or conditions may cause the
Company to cease to continue as a going concern;
− evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with those charged with governance, we determine those matters
that were of most significance in the audit of the financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditor’s report unless l aw or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of
such communication.
We are jointly liable for the performance of our joint audit and the issued joint auditors’ opinion in
accordance with the requirements of Bulgarian Independent Financial Audit Act. Upon acceptance
and performance of the joint audit engagement on which we report, we have complied with the
“Guidelines on performance of joint audit“, issued by Bulgarian Institute of Certified Public
Accountants and Bulgarian Commission for Public Oversight of Statutory Auditors.
Report on Other Legal and Regulatory Requirements
In addition to our responsibilities for reporting under ISAs, described above in section “Information
Other than the Separate Financial Statements and Auditors ’ Report Thereon” regarding the separate
activity report and the corporate governance statement, we have performed the additional procedures
contained in the Guidelines of the professional organisation of certified public accountants and
registered auditors in Bulgaria - Institute of Certified Public Accountants (ICPA). The procedures on
the existence, form and contents of the other information have been carried out in order to state
whether the other information includes the elements and disclosures in accordance with Chapter
Seven of Bulgarian Accountancy Act and Bulgarian Public Offering of Securities Act, (article 100n,
paragraph 10 of POSA in connection with Art. 100n, paragraph 8, items 3 and 4 and paragraph 4,
item 3 of POSA).
Statement Pursuant to Article 37, Paragraph (6) of Bulgarian Accountancy Act
Based on the procedures performed, we describe the outcome of our work:
(a) the information included in the separate activity report for the year ended 31 December 2022,
for which the separate financial statements have been prepared, corresponds to the report
on which we have expressed a qualified opinion in the “ Report on the Audit of the Separate
Financial Statements” section above;
(b) the separate activity report has been prepared in accordance with Chapter Seven of the
Accounting Act and Article 100 (n), paragraph 7 of Public Offering of Securities Act.
in our auditor’s report to the related disclosures in the financial statements or, if such disclosures
are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
up to the date of our auditor’s report. However, future events or conditions may cause the
Company to cease to continue as a going concern;
− evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with those charged with governance, we determine those matters
that were of most significance in the audit of the financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditor’s report unless l aw or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of
such communication.
We are jointly liable for the performance of our joint audit and the issued joint auditors’ opinion in
accordance with the requirements of Bulgarian Independent Financial Audit Act. Upon acceptance
and performance of the joint audit engagement on which we report, we have complied with the
“Guidelines on performance of joint audit“, issued by Bulgarian Institute of Certified Public
Accountants and Bulgarian Commission for Public Oversight of Statutory Auditors.
Report on Other Legal and Regulatory Requirements
In addition to our responsibilities for reporting under ISAs, described above in section “Information
Other than the Separate Financial Statements and Auditors ’ Report Thereon” regarding the separate
activity report and the corporate governance statement, we have performed the additional procedures
contained in the Guidelines of the professional organisation of certified public accountants and
registered auditors in Bulgaria - Institute of Certified Public Accountants (ICPA). The procedures on
the existence, form and contents of the other information have been carried out in order to state
whether the other information includes the elements and disclosures in accordance with Chapter
Seven of Bulgarian Accountancy Act and Bulgarian Public Offering of Securities Act, (article 100n,
paragraph 10 of POSA in connection with Art. 100n, paragraph 8, items 3 and 4 and paragraph 4,
item 3 of POSA).
Statement Pursuant to Article 37, Paragraph (6) of Bulgarian Accountancy Act
Based on the procedures performed, we describe the outcome of our work:
(a) the information included in the separate activity report for the year ended 31 December 2022,
for which the separate financial statements have been prepared, corresponds to the report
on which we have expressed a qualified opinion in the “ Report on the Audit of the Separate
Financial Statements” section above;
(b) the separate activity report has been prepared in accordance with Chapter Seven of the
Accounting Act and Article 100 (n), paragraph 7 of Public Offering of Securities Act.
5
(c) The corporate governance statement for the financial year for which the separate financial
statements have been prepared meets the requirements of Chapter Seven of the Accounting
Act and Article 100 (n), paragraph 8 of Public Offering of Securities Act.
(d) As a result of the acquired knowledge and understanding of the Company's activities and the
environment in which it operates, we have not identified any cases of material misstatement
in the separate activity report, except for the possible effect of the matter described in the
section "Other Information other than Separate Financial Statement and the Auditors ’ Report
Thereon" in "Report on the Audit of the Separate Financial Statements".
Statement Pursuant to Article 100m, Paragraph (10) of Bulgarian Public Offering of Securities
Act
Based on the procedures performed and our knowledge of the Company and the environment in
which it operates, in our opinion, there is no material misstatement in the description of the main
characteristics of the internal control system and of the risk management system of the Company in
connection with the financial reporting process and also in the information pursuant to Article 10,
paragraph 1, items “c” , “d”, “f”, “h” and “i” of Directive 2004/25/EC of the European Parliament and of
the Council of 21 April 2004 on takeover bids, which are included in the corporate governance
statement, being a component of the annual management report.
Additional reporting concerning the audit of financial statements in connection with Article
100m, paragraph (4), subparagraph (3) of Bulgarian Public Offering of Securities Act
− Statement on Article 100m, paragraph 4, subparagraph (3), item "b" of Public Offering of
Securities Act
Related party transactions are disclosed in note 32 to the separate financial statements. Based on
the performed audit procedures on related party transactions as part of our audit of the separate
financial statements as a whole, no facts, circumstances or other information have come to our
attention that caused us to conclude that the related party transactions are not disclosed in the
accompanying separate financial statements for the year ended on 31 December 2022, in all material
respects, in accordance with the requirements of IAS 24 „Related Party Disclosures“ . The results of
our audit procedures on related party transactions were taken into consideration for the purposes of
issuing our auditors ’ opinion on the separate financial statements as a whole, not for issuing a
separate opinion only on related party transactions.
− Statement on Article 100m, paragraph (4), subparagraph 3, item "c" of Public Offering of
Securities Act
Our responsibilities for audit of the separate financial statements as a whole, described in our report
in section „Auditors’ Responsibilities for the Audit of the Separate Financial Statements“, include
assessment whether the separate financial statements present fairly the significant transactions and
events. Based on the performed audit procedures on the significant transactions, which are
fundamental to the separate financial statements for the year ended on 31 December 2022, no facts,
circumstances or other information have come to our attention that caused us to conclude that there
are instances of unfair presentation and disclosure in accordance with the requirements of IFRS, as
adopted by the European Union. The results of our audit procedures on the significant transactions
and events of the Company, which are material to the separate financial statements, were taken into
consideration for the purposes of issuing an auditors ’ opinion on the separate financial statements as
a whole, not for issuing a separate opinion only on the significant transactions.
(c) The corporate governance statement for the financial year for which the separate financial
statements have been prepared meets the requirements of Chapter Seven of the Accounting
Act and Article 100 (n), paragraph 8 of Public Offering of Securities Act.
(d) As a result of the acquired knowledge and understanding of the Company's activities and the
environment in which it operates, we have not identified any cases of material misstatement
in the separate activity report, except for the possible effect of the matter described in the
section "Other Information other than Separate Financial Statement and the Auditors ’ Report
Thereon" in "Report on the Audit of the Separate Financial Statements".
Statement Pursuant to Article 100m, Paragraph (10) of Bulgarian Public Offering of Securities
Act
Based on the procedures performed and our knowledge of the Company and the environment in
which it operates, in our opinion, there is no material misstatement in the description of the main
characteristics of the internal control system and of the risk management system of the Company in
connection with the financial reporting process and also in the information pursuant to Article 10,
paragraph 1, items “c” , “d”, “f”, “h” and “i” of Directive 2004/25/EC of the European Parliament and of
the Council of 21 April 2004 on takeover bids, which are included in the corporate governance
statement, being a component of the annual management report.
Additional reporting concerning the audit of financial statements in connection with Article
100m, paragraph (4), subparagraph (3) of Bulgarian Public Offering of Securities Act
− Statement on Article 100m, paragraph 4, subparagraph (3), item "b" of Public Offering of
Securities Act
Related party transactions are disclosed in note 32 to the separate financial statements. Based on
the performed audit procedures on related party transactions as part of our audit of the separate
financial statements as a whole, no facts, circumstances or other information have come to our
attention that caused us to conclude that the related party transactions are not disclosed in the
accompanying separate financial statements for the year ended on 31 December 2022, in all material
respects, in accordance with the requirements of IAS 24 „Related Party Disclosures“ . The results of
our audit procedures on related party transactions were taken into consideration for the purposes of
issuing our auditors ’ opinion on the separate financial statements as a whole, not for issuing a
separate opinion only on related party transactions.
− Statement on Article 100m, paragraph (4), subparagraph 3, item "c" of Public Offering of
Securities Act
Our responsibilities for audit of the separate financial statements as a whole, described in our report
in section „Auditors’ Responsibilities for the Audit of the Separate Financial Statements“, include
assessment whether the separate financial statements present fairly the significant transactions and
events. Based on the performed audit procedures on the significant transactions, which are
fundamental to the separate financial statements for the year ended on 31 December 2022, no facts,
circumstances or other information have come to our attention that caused us to conclude that there
are instances of unfair presentation and disclosure in accordance with the requirements of IFRS, as
adopted by the European Union. The results of our audit procedures on the significant transactions
and events of the Company, which are material to the separate financial statements, were taken into
consideration for the purposes of issuing an auditors ’ opinion on the separate financial statements as
a whole, not for issuing a separate opinion only on the significant transactions.
6
Reporting on compliance of the electronic format of the separate financial statements
included in the annual separate financial report on the activity under Art. 100n, para 4 of
Bulgarian Public Offering of Securities Act with the requirements of ESEF Regulation
In addition to our responsibilities and reporting under ISA, described above in the section "Auditors ’
Responsibilities for the Audit of the Separate Financial Statements", we have followed the procedures
in accordance with the Guidelines on Issuing of Audit Opinion regarding the Implementation of the
European Single Electronic Format ( ESEF) for the financial statements of companies whose
securities are admitted to trading on a regulated market in the European Union (EU)" of Bulgarian
Institute of Chartered Accountants (ICPA) in Bulgaria". These procedures include verifying the
electronic file format and whether the human readable part of it corresponds to the audited separate
financial statements and expressing an opinion regarding the compliance of the electronic format of
the separate financial statements of Bulgarian Energy Holding EAD for the year ending 31 December
2022, contained in the electronic file „ 635400E1RWKJXPSBCV07-20221231-BG-SEP.xhtml “ , with
the requirements of Commission Delegated Regulation (EU) 2019/815 of 17 December 2018
supplementing Directive 2004/109/EC of the European Parliament and of the Council with regard to
regulatory technical standards on the specification of a single electronic reporting format (“ESEF
Regulation”). Based on these requirements, the electronic format of the separate financial statements
included in the annual separate financial report on the activity under Art. 100n, para. 4 of Bulgarian
Public Offering of Securities Act, must be submitted in XHTML format.
The management of the Company is responsible for the application of the requirements of ESEF
Regulation when preparing the electronic format of the separate financial statements in XHTML.
Our opinion is only regarding the electronic format of the separate financial statements included in
the electronic file „ 635400E1RWKJXPSBCV07-20221231-BG-SEP.xhtml “ and does not include the
other information contained in the annual separate financial report on the activity under art. 100n,
para. 4 of Bulgarian Public Offering of Securities Act.
Based on the performed procedures, our opinion is that the electronic format of the separate financial
statements of the Company for the year ended 31 December 2022, contained in the attached
electronic file „ 635400E1RWKJXPSBCV07-20221231-BG-SEP.xhtml “ , on which we are issuing a
qualified audit opinion, has been prepared in all material respects in accordance with the
requirements of the ESEF Regulation.
Reporting Pursuant to Article 59 of Bulgarian Independent Financial Audit Act in relation to
Article 10 of Regulation (ЕС) No 537/2014
In accordance with the requirements of Bulgarian Independent Financial Audit Act and in relation with
Article 10 of Regul ation (ЕС) No 537/2014, we report additionally the information as follows:
− Grant Thornton OOD and Zaharinova Nexia EOOD, as participants in the consortium DZZD
"AUDIT BEH" were appointed as statutory auditors of the separate financial statements of
Bulgarian Energy Holding EAD for the year ending 31 December 2022 with Decision No E -RD-
21-22 by the Minister of Energy dated 4 December 2020 for a period of three years.
− The audit of the separate financial statements of the Company for the year ended on 31
December 2022 has been performed for second consecutive year by Grant Thornton OOD and
Zaharinova Nexia EOOD.
− We confirm that our joint audit opinion is consistent with the additional report to the audit
committee, which was provided in accordance with Article 60 of Bulgarian Independent Financial
Audit Act.
Reporting on compliance of the electronic format of the separate financial statements
included in the annual separate financial report on the activity under Art. 100n, para 4 of
Bulgarian Public Offering of Securities Act with the requirements of ESEF Regulation
In addition to our responsibilities and reporting under ISA, described above in the section "Auditors ’
Responsibilities for the Audit of the Separate Financial Statements", we have followed the procedures
in accordance with the Guidelines on Issuing of Audit Opinion regarding the Implementation of the
European Single Electronic Format ( ESEF) for the financial statements of companies whose
securities are admitted to trading on a regulated market in the European Union (EU)" of Bulgarian
Institute of Chartered Accountants (ICPA) in Bulgaria". These procedures include verifying the
electronic file format and whether the human readable part of it corresponds to the audited separate
financial statements and expressing an opinion regarding the compliance of the electronic format of
the separate financial statements of Bulgarian Energy Holding EAD for the year ending 31 December
2022, contained in the electronic file „ 635400E1RWKJXPSBCV07-20221231-BG-SEP.xhtml “ , with
the requirements of Commission Delegated Regulation (EU) 2019/815 of 17 December 2018
supplementing Directive 2004/109/EC of the European Parliament and of the Council with regard to
regulatory technical standards on the specification of a single electronic reporting format (“ESEF
Regulation”). Based on these requirements, the electronic format of the separate financial statements
included in the annual separate financial report on the activity under Art. 100n, para. 4 of Bulgarian
Public Offering of Securities Act, must be submitted in XHTML format.
The management of the Company is responsible for the application of the requirements of ESEF
Regulation when preparing the electronic format of the separate financial statements in XHTML.
Our opinion is only regarding the electronic format of the separate financial statements included in
the electronic file „ 635400E1RWKJXPSBCV07-20221231-BG-SEP.xhtml “ and does not include the
other information contained in the annual separate financial report on the activity under art. 100n,
para. 4 of Bulgarian Public Offering of Securities Act.
Based on the performed procedures, our opinion is that the electronic format of the separate financial
statements of the Company for the year ended 31 December 2022, contained in the attached
electronic file „ 635400E1RWKJXPSBCV07-20221231-BG-SEP.xhtml “ , on which we are issuing a
qualified audit opinion, has been prepared in all material respects in accordance with the
requirements of the ESEF Regulation.
Reporting Pursuant to Article 59 of Bulgarian Independent Financial Audit Act in relation to
Article 10 of Regulation (ЕС) No 537/2014
In accordance with the requirements of Bulgarian Independent Financial Audit Act and in relation with
Article 10 of Regul ation (ЕС) No 537/2014, we report additionally the information as follows:
− Grant Thornton OOD and Zaharinova Nexia EOOD, as participants in the consortium DZZD
"AUDIT BEH" were appointed as statutory auditors of the separate financial statements of
Bulgarian Energy Holding EAD for the year ending 31 December 2022 with Decision No E -RD-
21-22 by the Minister of Energy dated 4 December 2020 for a period of three years.
− The audit of the separate financial statements of the Company for the year ended on 31
December 2022 has been performed for second consecutive year by Grant Thornton OOD and
Zaharinova Nexia EOOD.
− We confirm that our joint audit opinion is consistent with the additional report to the audit
committee, which was provided in accordance with Article 60 of Bulgarian Independent Financial
Audit Act.
7
− We declare that prohibited non-audit services referred to in Article 64 of Bulgarian Independent
Financial Audit Act were not provided.
− We confirm that we remained independent of the Company in performing the audit.
− For the period for which we were engaged as statutory auditors, we have not provided any other
services to the Company in addition to the statutory audit, which have not been disclosed in the
separate activity report or the separate financial statements,
4 May 2023
Grant Thornton OOD Zaharinova Nexia EOOD
Audit firm with reg. No 032 Audit firm with reg. No 138
Silvia Dinova Stoicho Milev
Registered auditor, responsible for the audit Registered auditor, responsible for the audit
Mariy Apostolov, Managing Partner Dimitrina Zaharinova, Manager
Bulgaria, Sofia, 1421 Bulgaria, Sofia, 1309
26, Cherni Vrah Blvd. 157-159 Konstantin Velichkov Blvd., fl. 1, office 3
− We declare that prohibited non-audit services referred to in Article 64 of Bulgarian Independent
Financial Audit Act were not provided.
− We confirm that we remained independent of the Company in performing the audit.
− For the period for which we were engaged as statutory auditors, we have not provided any other
services to the Company in addition to the statutory audit, which have not been disclosed in the
separate activity report or the separate financial statements,
4 May 2023
Grant Thornton OOD Zaharinova Nexia EOOD
Audit firm with reg. No 032 Audit firm with reg. No 138
Silvia Dinova Stoicho Milev
Registered auditor, responsible for the audit Registered auditor, responsible for the audit
Mariy Apostolov, Managing Partner Dimitrina Zaharinova, Manager
Bulgaria, Sofia, 1421 Bulgaria, Sofia, 1309
26, Cherni Vrah Blvd. 157-159 Konstantin Velichkov Blvd., fl. 1, office 3