Bulgaria Moves to Scrap Czech Power Giant's License

View of the Czech power distributor CEZ offices in capital Tirana, Monday, Jan. 21, 2013.| Photo by : Hektor Pustina/AP

Bulgaria's State Commission for Energy and Water Regulation, DKEVR, on Tuesday started procedures to strip the local unit of power distributor CEZ of its license, media reported.

The move to scrap CEZ's license followed violent streets protests that led to the resignation of Bulgaria's Prime Minister, Boyko Borisov, on Wednesday.

Albania's Energy Regulatory Agency, ERE, took a similar move on January 21, when it nationalized  CEZ Shperndarje, after a debt dispute with the government in Tirana over unpaid electricity bills.

The company had been locked in a row with the Albanian government since the beginning of 2012.

The CEZ group slammed the Albanian decision to strip its subsidiary of its operating license, calling it an act of expropriation. It said the move was against Albania's own law and announced legal action, seeking damages of €200 million.   

A conglomerate of 92 companies, the CEZ group is the largest utility and biggest public company in Central and Eastern Europe.

The Czech Prime Minister, Petr Necas, on Tuesday reminded Bulgaria of its obligations under EU law toward the company.

"I expect Bulgaria as a member of the European Union to keep its international obligations, the European law as well as its own laws, including those regarding foreign investment protection," Necas said.

Previously, Necas threatened to block Albania’s EU integration process after Tirana stripped CEZ of it license.

“The Czech Republic cannot ignore this approach to a Czech investor, in the light of Albania's integration hopes,” he warned.