The National Assembly Ad Hoc Committee probing the signing and termination of a USD 1 billion memorandum with Gemcorp and IP3 by the Kiril Petkov Cabinet on Tuesday gave a hearing to Alexander Nikolov, who signed the document on March 23, 2022 in his capacity as minister of energy between December 2021 and August 2022.
Nikolov told the Committee that the memorandum with Gemcorp Holdings and IP3 Corporation was non-binding and no claims can possibly be laid to the Bulgarian State. "The only investment intentions declared to Bulgaria in any form whatsoever are related to Sofia Municipality," the ex-minister commented.
He argued that, under the memorandum, the technological company with a financial partner expressed interest in potential assets in Bulgaria and in sharing in a transformation of the energy sector. This, however, was not implemented. "A commitment that was non-existent anyway was abandoned after the media fuss and the public discontent," Nikolov explained.
According to Temenuzhka Petkova MP of GERB-UDF and former energy minister, Energy Ministry experts were not involved in the drafting of the memorandum. Besides this, there are no analyses and opinions showing the basis on which it was decided to sign this memorandum, its purpose, and the way Bulgaria and the Bulgarian power industry would benefit from it. Petkova was adamant that the memorandum was binding and that it had to be ratified because of a commitment to arbitration. "The Bulgarian side is exposed to financial risks in one form or another," she added. In her opinion, ratification of a document is not optional because this is required by the Constitution once the document contains an arbitration clause.
Nikolov countered that the arbitration clauses were included solely and exclusively as a safeguard for Bulgaria.
The Ad Hoc Committee also heard caretaker Energy Minister Rosen Hristov, who said that a unilateral termination of the memorandum by Bulgaria will enter into effect in a couple of weeks' time.
Hristov specified that a letter requesting termination by mutual agreement was sent first, but the document was not signed by the counterparties. Then Hristov sent a letter of unilateral termination, which will become a fact 30 days after dispatch. Meanwhile letters from the two companies were received to the effect that they agree to the termination and waive all claims, but they did not sign an agreement on termination by mutual agreement. In the Minister's opinion, the companies are waiting for the lapse of the period for unilateral termination.
"For the time being, no damages sustained by Bulgaria have been identified but the reason for this is that a full-scale check by the Energy Ministry is not yet completed," Hristov commented, adding that a check into damages caused by an information leak is also conducted. The State Agency for National Security has been asked to assess whether the indications and attempts to obtain information are related to the memorandum and what information had been provided and whether this was detrimental to the country or not, he added.
In a related development, Continue the Change co-chair and former prime minister Kiril Petkov told a news briefing in Parliament that the memorandum is non-binding and legally optional. Except for two confidentiality clauses, the document does not place the parties under any legally binding obligations, he specified.
In the summer of 2022, the Council of Ministers decided to terminate this memorandum, there is a clear record of this decision which has been submitted to the National Assembly registry, Petkov stressed.
He recalled that caretaker Energy Minister Rossen Hristov confirmed at the previous Ad Hoc Committee meeting that the companies can refer their claims to the Arbitration Court in Paris within two years. Both Gemcorp and IP3, however, have confirmed in writing that they waive all claims to the Bulgarian State.
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