Olivier Marquette for Trud Daily: Bulgaria and USA will develop relations in energy and defense

Intro: Bulgaria and the United States got closer after the purchase of F-16 jet fighters. Behind this partnership there are years of work, meetings with the government and many numbers that brought the American investments in top-6 of the foreign investors ranking in the country. The most recent data shows that we export more than we import from the USA. The explanation by the AmCham Bulgaria is that we are competitive, and we have succeeded in the trade races with other European counties on the American market. Which are the directions in which both countries can work in future? Which American companies have interest to take part in energy projects and which is the most important thing according to Olivier Marquette, AmCham Bulgaria President, in order many other American investments to come to Bulgaria.

Mr. Marquette, some days ago you gathered representatives of the American business in Bulgaria to meet with the government. How you can describe the partnership between the Bulgarian authorities and the business?

The role of AmCham is to promote the Transatlantic relations between Bulgaria and the USA and to encourage good business climate in the country and the economic ties between both countries. Another our goal is to upgrade what was achieved so far. One of the ways to achieve that is through constant dialog with the government. This is the reason that motivates us to organize such meetings with the authorities to gain benefits for both parties, including our members. Such a meeting we organized on October 7th this year. The discussion made us happy because of the fair and constructive dialog which we reached with the government. We are satisfied by the fact that along with the Prime Minister Borissov, the event was attended by many ministers. On our behalf there were around 300 members in the hall. A key moment which I must mention with that regard, is the mutual acknowledgement about the extremely successful year of bilateral relations.

The F-16 jet planes purchase is described as “the step towards the rapprochement between both countries”. Can you please comment the deal?

The progress with regard the commercial relations is visible mainly in the deal between Bulgaria and the United States for the new F-16 Block 70 jet fighters. More specifically defense is among the spheres in which we have achieved a significant progress with the government. That deal in fact provoked a severe debate in society. On behalf of AmCham we are happy that we have contributed to the successful closing by “Lockheed Martin”, which are our member. Bulgaria bought eight fighters F-16 Block 70, which is the best that the company has ever produced in this jet fighters category. As a representative of the Chamber I can’t say additional details about the deal on behalf of the manufacturer, but what is already known is that the first jet fighter will be delivered in end of 2022. In the next year – 2020 – the training of the future pilots and maintenance technicians will start in the United States. Another important part of the contracts is the industrial partnership. Randy Howard, Business Development Director of Lockheed Martin, mentioned during the breakfast with the government, that in the context of this partnership it is expected development of some activities and projects in Bulgaria.

Which are the spheres in which we can achieve more development in the relations of both countries?

Apart from defense, these are energy and cyber-security.

Read more: Olivier Marquette’s Opening Speech at the 2019 AmCham Business Breakfast with the Bulgarian Government – U.S. Business Has Always Been Demonstrating Good Will in Partnership with Bulgarian Authorities.

Olivier Marquette explaining the current development of the Bulgarian – U.S. relations.
What is the share of the American companies in energy projects in Bulgaria?

The U.S. companies continue contributing to the energy security and diversification of the energy supply in Bulgaria. Speaking about energy security of the country, I can point out the two so-called American TPPs – Maritsa East 1 and 3. They are being branded as American, but I would emphasize that both have European suppliers and equipment and many Bulgarian people working there. Both plants – AES Galabovo and ContourGlobal Maritsa East 3 – contribute to the energy security of Bulgaria because they generate electricity from local resources – lignite coal from “Maritsa East Mines”.

In the sphere of nuclear energy, from many years now “Westinghouse” operates successfully in Bulgaria. They handle projects for safety and operations of the Kozloduy NPP. Another example I can give is that in the very first time of the Energy history of Bulgaria, in 2019 “Bulgargaz” bought and imported cheaper liquified natural gas from America. I would mention only two of the suppliers – Sempra Energy and Cheniere Energy. In addition, AmCham supported a technical meeting between Bulgarian and American energy experts. With regard the realization of the Belene NPP project there is some interest by “General Electric” for equipment delivery.

What is your advice for the development of the energy projects in Bulgaria?

For Bulgaria the energy independence and diversification of fuel supply are very important, especially in the nuclear energy and LNG. Now Bulgaria relies of a single gas supplier, but it works actively to secure other sources. For example, the Interconnector Greece – Bulgaria that will open a unique opportunity for gas import from other countries globally, including the USA.

You are the President of AES Bulgaria too, which owns AES Galabovo TPP. Can you please share some results of the company? How do you see its development in the country?

AES Galabovo TPP is the brand new and the most modern thermal power station in Southeast Europe. Since the beginning of the year it produced 2,2 million MWh electricity which is 7,9% of the overall electricity consumption in the country. AES Corporation owns the St. Nikola Wind Farm as well. It generated additional 206,000 MWh which is 0,7% of the overall consumption. Thus, since the beginning of this year the company has produced 8,6% of the total electricity of Bulgaria. I would like to mention also, that the other American TPP – ContourGlobal Maritsa East 3 – has generated 3,1 million MWh power for the same period, which is 11% of the overall electricity consumption.

About the development of the AES Galabovo TPP for us it is important to reached a mutual beneficial and acceptable solution for both parties – the state and the investors. Such a solution should consider the importance of the thermal power stations for Bulgaria. We as a chamber are totally aware that to be developed further the positive investment climate in the country, such a decision is needed that it supports the attraction of future investments in Bulgaria and to protect the rights of those that have already invested here.

Important factor for the operation of the power stations is the prices of the carbon emissions. It has increased over the past years that reflected in the wholesale price. Considering the emission price as a factor, it should not be forgotten that TPPs represent 45% of the total power generation capacity of Bulgaria. Thus, we have to foresee measures to continue their operation. The Bulgarian government has already taken such steps with that regard for the development of capacity remuneration mechanism.

How many are the American companies that have invested in Bulgaria? Could you please share some of the good examples?

Over 140 companies operate in Bulgaria, and 95% of them are AmCham members. There are many successful stories of American investors such as “Dundee Precious Metals” which inaugurated the first mine in the last 40 years at Krumovgrad. The gold mine project is of total USD 165 million.

Another global brand – Coca-Coca – expanded its production capacity of its factory at Kostinbrod with BGN 40 million investment. Among the big investors we should mention Sensata Technologies that are manufacturer and supplier of high-temperature sensors for the automotive industry.

How does AmCham help Bulgarian companies to reach the U.S. market and vice versa? How do you promote Bulgaria to American companies?

AmCham Bulgaria links Bulgarian companies with the Commercial Service of the U.S. Embassy in Bulgaria (USCS). It is important that they are our members too in order to facilitate the dialog. From that point on the procedures are carried out by the Commercial service colleagues. It is important to mention that any Bulgarian company should register a legal entity in the United States in order to ease their access to the market. In addition, jointly with the USCS this year we organized a very successful event called “Explore USA” at which we presented to the Bulgarian companies the opportunities of the American market and success stories of those Bulgarian businesses that are already operating there.

Why does Bulgaria exports more to the U.S. than it imports?

Bulgaria is part of the big global supply chain and thanks to its competitive cots, incl. cost of labor, well-trained talents, tax level, as well as the political stability and EU membership, the country succeeds to gain significant share of the goods imported in the United States. The data from the Transatlantic report 2019 of the AmChamEU shows that the country exports products for USD 659 million including computer and electronic equipment, textile, crops and machinery. The U.S. export to Bulgaria is at total USD 382 million in pharmaceutical, machinery, and others. I will give some personal example – I am French, and I’ve recently noticed that in France along with the French wine there are bottles of Bulgarian wine as well. I like it a lot and I like its taste too. All of it shows that Bulgaria is competitive in the global market.

A moment from the interview between Olivier Marquette and Katerina Kovacheva at the new office of AmCham Bulgaria.
What is your advice to the American investors that are looking towards Bulgaria?

Of course, the first thing I would advise them to become our members. AmCham Bulgaria has the network of contacts and proper information that we could share with them how they should do and not to do here. Also, we can link them with other U.S. investors that are already in Bulgaria. They could be beneficial for any new comer in order not wonder in vain while structuring their business plan in the country.

The most important for the new investors, apart from the positive characteristics of the country such as taxes, labor, competitive levels of the costs, I would mention the predictability of the regulatory framework and the business environment. It is important to mention that the good example represented by the U.S. investments in Bulgaria show that the business environment in Bulgaria is good for attracting new ones.

Interview for Trud Daily by Katerina Kovacheva. Photo: Tsvetan Tomchev

Source in Bulgarian.