The existing vicious model in domestic energy puts the energy transition at serious risk of getting lost in the labyrinth of shadowy political and economic interests of the conglomerate associated with businessman Hristo Kovachki. This is what the report „The Eight Circles of the Kovachki Coal Empire“ by „Greenpeace“ – Bulgaria warns about.
The analysis of the complex puzzle of connections and dependencies is a follow-up to the Financial Mines investigation, which in 2018 described the circles of mines and plants whose ownership is hidden behind layers of offshore companies. However, the contours of the Kovachki Coal Empire are much wider and include intermediaries draining the public company „Toplofikatsia Sofia“, a trader and verifier of greenhouse emissions, a pension fund for investments in heating systems, an insurance company – a „favorite of the state“, and last but not least – a lobbying association for „green future“ of the Brown Coal Empire.
The „From Brown to Green“ platform is being activated at the moment when Bulgaria is facing the ambitious task of transforming its economy and energy, and for this, 5.7 billion euros have been earmarked under the Recovery and Resilience Mechanism and 1.3 billion euros under the Fund for Fair transition. The role of this association of companies from the Coal Empire is to promote their development plans as green and good for people and regions. Against the background of the long history of pollution of enterprises of this circle, examples of poor treatment of workers and plans to burn waste and biomass of unclear origin, the platform falls under the definition of greenwashing („painting in green“).
Enterprises from the Kovacki Coal Empire are not among the most decent taxpayers. A total of BGN 330 million in outstanding liabilities to the National Revenue Agency at the end of 2020 have 17 companies identified as part of this conglomerate. As of the same date, receivables in the amount of BGN 10 million were written off by statute of limitations. The NRA provided this information in a summarized form, without a breakdown for each company, in response to an inquiry by „Greenpeace“ – Bulgaria under the Law on Access to Public Information.
Such practices are possible because of the regulatory comfort provided to the enterprises of this conglomerate for years by a number of institutions such as the Financial Supervision Commission, the Energy and Water Regulatory Commission, the National Revenue Agency, the Ministry of Environment and Water, the Commission for the Protection of the competition. Most recently, in 2019, the four employers’ organizations in Bulgaria filed a report with the CPC about „non-market commercial practices“ of „certain entities“ – all from the Kovachki Coal Empire.
In 2020, the Commission ruled that there is no concentration in the energy sector, because the foreign natural persons – owners of the companies owning the Bulgarian enterprises, have no other assets in Bulgaria.
In the same year, „Bobov Dol“ TPP remitted loans for 31 million BGN to the British owners of other seemingly unrelated enterprises from the Coal Empire. BGN 22 million are receivables from „Bovard“ – owner of „Toplofikatsia – Burgas“, and another BGN 9 million – from „Cataland“, owner of „Toplofikatsia – Pleven“ and „Toplofikatsia Ruse“. This saves „Bobov Dol“ TPP BGN 3.1 million in corporate tax.
„Energy transformation is key to our collective efforts to tackle the climate crisis and preserve the planet. In a country like Bulgaria, it is of key importance that the funds from the European Union and the national budget ensure a secure and clean future for the communities that live with the consequences of the coal industry, and not to help reproduce a system with many vices,“, “Greenpeace” Bulgaria Climate and Energy Campaign Coordinator Desislava Mikova said.
