Award-Winning IPP Financing in Bulgaria

Delphos served as a financial advisor to The AES Corporation on this greenfield, lignite-fired power project with installed capacity of 670 MW, which received Project Finance magazine’s Power Deal of the Year award in 2005 for Europe. Total project costs are approximately Euro 1.1 billion, of which Euro 750 million was provided in the form of limited recourse senior debt and the remainder as sponsor equity. The project benefits from a 600 MW PPA with NEK, Bulgaria’s state-owned transmission grid company, but there is no sovereign guarantee in favor of the lenders. The project is one of the largest foreign direct investments in Southeast Europe. The lenders/guarantors include the European Bank for Reconstruction and Development (EBRD), the Multilateral Investment Guarantee Agency (MIGA), COFACE, Hermes, Calyon, ING, and BNP Paribas. Delphos was the original co-developer of this project and subsequently sold an 88% stake to The AES Corporation. As a co-developer of the project, Delphos proposed a project structure to the Bulgarian government (“BOOT”) that did not require a sovereign guarantee. Delphos proposed and negotiated a lignite conversion (tolling) contract with NEK, which at the time was an integrated utility but has subsequently been unbundled. When the government wished to validate the proposed capacity tariff, Delphos and its partner won an international tender. As financial advisors to The AES Corporation, Delphos consulted the sponsor on various aspects of the financing, including creating and optimizing a financing plan, creation of a financial model, soliciting interest from financing agencies, writing marketing and disclosure materials, negotiating favorable terms for the political risk insurance policy, participating in lender due diligence, and related activities. As the project was developed in an environment of sector deregulation and privatization, we helped AES replace the original tolling contract with separate Power Purchase and Lignite Supply Agreements. We also assisted AES in obtaining a government letter with certain assurances to the lenders with respect to the future restructuring and privatization of the off-taker.



  • Renewables & Power

Client Name

AES Maritza East 1

Services Provided

  • Capital Raising


  • Central & Eastern Europe


  • Bulgaria