Hydro Power Cascade Gorna Arda
The idea to construct a hydro power structure on the upper valley of Arda river arose in the 1980s. At that time a plan was devised for construction of three dams – Madan, Ardino and Sarnitsa with adjoining hydroelectric plants. The work on the project in the 1980s was mainly on ideological level. After 1989 the project was frozen for about 10 years.
In 1998, the work on the Hydro power cascade Gorna Arda was resumed. This became a fact with the signing of an agreement between Bulgaria and Turkey on November 4, 1998. In October 1999 Bulgaria’s Prime Minister Ivan Kostov and his Turkish counterpart Bülent Ecevit gave the official start of the project at a first groundbreaking ceremony.
The announced project parameters envisaged the construction of the three dams – Madan, Ardino and Sarnitsa – to be finished by 2006. Each one of these dams was to be with an HPP, with total capacity structure of 170 MW and production of 466 million kWh of electricity per year. The announced value of the structure was 220 million USD. The project was temporarily stopped shortly after its start due to financial difficulties from the Turkish side.
On March 22, 2001 the government press office announced that “the Government of the Republic of Bulgaria, by a Decision 135, abolishes Decision 580 from 2000 for concession of future water site – Madan dam and its pressure derivation – public state property, first step of Gorna Arda cascade, to be constructed with concessionary assets”.
The annulment of the decision for concession is on account of the not presented unsubmitted evidence for financial and technical resources concerning the realization of the project by the shareholder in HEC Gorna Arda - Ceylan İnşaat – Ceylan Holding associate.
The Ankara Commercial Court put Ceylan Insaat property under distraint,thus securing and guaranteeing the creditor claims of Capitalbank, an associate of Ceylan Holding, that is under special supervision. The distraint forbids execution of any deals or payments, as well as power of disposition of real estates, owned by the company.
Revocation of the decision granting a concession launched a series of negotiations between the National Electricity Company and "Ceylan Holding" for its replacement as a participant in the project.
Several foreign companies, including the Italian Enel Power, showed interest to invest in the project, accepting the participation of Turkey. Despite the conducted negotiations, they did not come to an agreement about introducing new partners in Gorna Arda.
In March 2008, Turkish company CCG Insaat Sanayi Ytirim Ve Turizm A.S., that took Ceylan’s assets after it was declared insolvent, filed a lawsuit against NEK in the Paris Court of Arbitration. The CCG claim was for 75 million EUR. The company claimed that NEK tried to terminate their participation in Hydro Power Company Gorna Arda, against the will of CCG.
In the end of 2008, the Austrian company EVN, with a serious experience on the Bulgarian energy market, expressed interest in participating in the Gorna Arda project. The negotiations with CCG Insaat Sanayi Ytirim Ve Turizm A.S. resulted in an agreement that EVN and Alpine Bau would buy the Turkish company’s share in HEC Gorna Arda. In return, CCG Insaat Sanayi Ytirim Ve Turizm A.S. temporarily suspended its claim in the Paris court of arbitration.
On September 2, 2009, the Government of the Republic of Bulgaria, led by the Prime Minister Boyko Borisov, decided to determine Hydro Power Company Gorna Arda AD as an investor of Gorna Arda cascade.
The Council of Ministers also approved a letter to support the realization of the investment project. With its approval, the final structure of Hydro Power Company Gorna Arda became possible. NEK, EVN and Alpine Bau were referred as shareholders in the company.
In the beginning of 2010 Alpine Bau reviewed its development priorities and declared its intention to withdraw from Gorna Arda project.
On July 19, 2010 in Vienna, in the presence of the Prime Minister Boyko Borisov, a joint-stock agreement was signed between NEK and EVN. This agreement set the actual beginning of establishing a Bulgarian-Austrian company for construction and exploitation of hydro cascade Gorna Arda. The agreement provides EVN to own 70% of the company.
Gorna Arda cascade will give a significant boost to the local economy in Smolyan and Kardzhali regions. Our goal is to turn Gorna Arda into an attractive tourism development center in the region, which is among the most popular places for rural and winter tourism in Bulgaria.