Austrian utility EVN said it has informed Bulgaria that it intends to launch arbitration proceedings in order to safeguard its investments in the country.
The announcement comes as a result of various actions taken by the Bulgarian regulatory authorities and other state agencies in the country compromising EVN and its businesses, the company said.
These actions reduce the company's proceeds from the sale of electricity. "Moreover, by not acknowledging actual financing costs, the payment of feed-in compensation to which producers of renewable energy are entitled is reduced," the company said.
EVN added that the announcement is in response to the repeal of a special levy for network access of renewable energy production installations by the recent decision of the Bulgarian administrative court in March.
"From EVN AG's perspective, the result of this decision represents a further violation of Bulgaria's investment protection obligations."
Meanwhile, the company's local unit, EVN Bulgaria, urged the country's energy regulator to revise the electricity prices effective for the next three months, as the high cost of green energy can threaten the viability of the system.
The company said its renewables-related losses in Bulgaria will come in at 40 million levs ($26 million/20 million euro) in the second quarter of 2013, if the regulator retains the current tariffs, and estimated its losses generated from July 2012 to March 2013 at 100 million levs.