10 EXTRA PAGES ON REAL ESTATE

issue 88 april 2008

AmAm ChamCham Interview:Interview: BoykoBoyko Borisov,Borisov, SofiaSofia MayorMayor AlexAlex Nestor,Nestor, DundeeDundee PreciousPrecious MetalsMetals

Analysis:Analysis: TheThe RealReal EstateEstate OverviewOverview -- Business,Business, Residential,Residential, Recreation,Recreation, GolfGolf AlbaniaAlbania && CroatiaCroatia toto JoinJoin NATONATO

MeetMeet thethe newnew members:members: EmporikiEmporiki BankBank ,Bulgaria, KimimpexKimimpex TradeTrade && Leasing,Leasing, MBLMBL Ltd.,Ltd., VMVM FinanceFinance GroupGroup UnitedUnited BulgarianBulgarian BankBank

AmChamAmCham VolunteersVolunteers toto MakeMake ParksParks inin SofiaSofia NicerNicer

American Chamber of Commerce in Bulgaria

Business Park , Mladost 4 Area, Building 2, Floor 6, 1766 Sofia Tel.: (359 2) 9742 743 Fax: (359 2) 9742 741 homepage: www.amcham.bg e-mail: [email protected]

editorial

Dear Reader,

Let me ask you a very simple question: "Do you happen to have a car?" If your answer is 'yes,' keep on reading. If it is 'not,' skip the next paragraph.

So, you have an automobile, which is very likely to be used at least once a week in the Sofia downtown, where most of the government institutions, tax offices, banks, and other important businesses are located. Don't you think that getting around the downtown area has been becoming increasingly difficult? Sofia Mayor Boyko Borissov seems to agree with you. He gave us an inter- view (see Page 24), in which he explains that once the construction of Sofia Metropolitan is completed, the access to the city center will be regulated by a fee. But how long will the metro construction last? Four, five, or more years? By then, our nerves will be so frayed that most of us will have left Sofia for some other, better organized European capital. Living standards improve, as people work hard and more of them are able to afford city apartments and cars. They all want to live in a place with decent infrastructure. Every time they leave their apartments, however, they have to deal with congestion on unbelievable scale. Disappointment inevitably sets in. I understand the numerous problems the Sofia mayor has to tackle, yet he is expected to do a lot more by the taxpayers of the city under his rule. Some semblance of hope that things may start improving was generated during the meeting between AmCham members and Borissov, which we report on Page 22.

Several other materials in this issue of AmCham Bulgaria Magazine should grab your atten- tion as well. Boyko Vassilev explains the perspectives before Albania and Croatia after they were invited to join NATO on Page 34. Yuliana Boncheva on Page 26 tells us about the Catch-22 situation of Dundee Precious Metals, a company, which has been a long-time AmCham member. Something valuable to all of you is offered in the set of articles on real estate, which covers the future of golf course construction in Bulgaria, office space market, AmCham Bulgaria Magazine April 2008 and announcements of coming projects by large construction and investment companies from Page 4 to Page 20.

Enjoy your reading!

Milen Marchev Editor-in-Chief

page 1 contents

issue 88 april 2008

AmCham Bulgaria Magazine is a primary forum for political and economic analyses, news, viewpoints as well as for the presentation of new business oppor- tunities. The articles in the AmCham Bulgaria Magazine express the opinions of the authors and do not necessarily reflect the position of the American Chamber of Commerce in Bulgaria.

Publisher Writers: American Chamber of Commerce in Bulgaria Boyko Vassilev, Marina Tzvetkova, Business Park Sofia, Mladost 4 Area Mina Georgieva, Panayot Angarev, Building 2, Floor 6, Sofia 1766, Bulgaria Yuliana Boncheva Tel.: +359 (2) 9742 743 Fax: +359 (2) 9742 741 Advertising e-mail: [email protected] AmCham Bulgaria: www.amcham.bg Nadejda Vakareeva, [email protected] AmCham Bulgaria Magazine: Editor-in-Chief Milen Marchev, [email protected] Milen Marchev

Deputy Editor-in-Chief: The AmCham Bulgaria Magazine reaches a broad audience Christopher Karadjov of AmCham members, leading US, Bulgarian and internation- al companies, US and Bulgarian decision-makers, all Senior Editor: AmChams around the world. Irina Bacheva Subscription is free of charge. If you would like to subscribe to AmCham Bulgaria publications, please contact the ISSN 1312-935X AmCham Bulgaria office.

iF YOUR AD WERE pLACED HERE, AMCHAM ADVERTISING RATES

BACK COVER ...... 1330 BGN OUR ESSAGE SECOND COVER ...... 1220 BGN Y M THIRD COVER ...... 1180 BGN • WOULD BE CONVEYED TO THE LEADING US, INTERNATIONAL AND TWO PAGES SPREAD ...... 1440 BGN BULGARIAN COMPANIES OPERATING WITHIN BULGARIA; FULL PAGE ...... 960 BGN HALF PAGE ...... 780 BGN • WOULD REACH THE DESKS OF SENIOR EXECUTIVES AND DECISION-MAKERS QUARTER PAGE ...... 580 BGN WHO DEMAND HIGH QUALITY PRODUCTS AND SERVICES; LOGO ...... 350 BGN INSERT ...... 840 BGN • WOULD TRAVEL ACROSS THE EUROPEAN CONTINENT AS WELL AS THE UNITED STATES, TAKING FULL ADVANTAGE OF THE INTERNATIONAL NET- DISCOUNTS: WORK OF AMERICAN CHAMBERS OF COMMERCE;

2 AMCHAM MEMBERS ...... 20% • WOULD SERVE AS AN IDEAL NETWORKING OPPORTUNITY FOR POTENTIAL ADVERTISING AGENCIES ...... 15% FOREIGN INVESTORS AND BUSINESSMEN VISITING BULGARIA. MAX VOLUME DISCOUNT ...... 10%

THE RIGHT MESSAGE TO THE RIGHT AUDIENCE. For more details please contact: AmCham Bulgaria Office – Nadia Vakareeva, phone: 974 27 43/4, e-mail: [email protected] AmCham Bulgaria Magazine – Milen Marchev, phone: 846 88 32, e-mail: [email protected] AmCham Bulgaria Magazine April 2008 April Magazine AmCham Bulgaria amcham bulgaria

Board of Directors of the American Chamber of Commerce in Bulgaria President Mr. Borislav Boyanov Borislav Boyanov & Co. Vice President Mr. Anthony Hassiotis Bulgarian PostBank Contents Vice President Mr. Kenneth M. Lefkowitz New Europe Corporate Advisory Treasurer Tanya Kosseva-Boshova Landmark Property Bulgaria market overview Golf for Maniacs… …and Investors ...... 4 Members Ms. Olga Borissova Ellief Center, AUBG By Mina Tsvetkova Mr. George Georgiev Motorola Bulgaria Office Space Market in Sofia Mr. Thomas Higgins Balkan Accession Fund Mr. Andon Ichev General Electric Marks Record Growth ...... 10 Mr. Stefan Ivanov Citibank N.A. By MBL ltd. Ms. Dana Leff AbCRO Bulgaria Property Investors Project Steep Increase in Mr. Chris Thompson Consultant Commercial Rent Space ...... 12 Ms. Elitsa Tsaneva Ideal Standard Bulgaria Marketing Suite to Serve Sofia Airport Center . . . .14 Ex-Officio Member Mr. James Rigassio US Senior Commercial Attache Executive Director Valentin Georgiev Bourgas Plaza: First of a Kind ...... 16

Cleves Enlarges Luxury Portfolio with 45 Sofia 3M (East) AG . AA KRES EOOD . ABB Bulgaria EOOD . Abbott Laboratories S.A. . AbCRO - Bulgaria . Apartments ...... 17 Accor Services Bulgaria . ACO Building Elements Ltd. . ACSIOR Ltd. . ADIS Ltd. . Advance International Transport (Balkan) EAD . AES Corporation . AFA OOD . AIG Bulgaria Insurance & Reinsurance Company EAD . AIG Life Bulgaria . AIMS Human Capital . Alcoa Packaging Bulgaria . Alexander Hughes Bulgaria A Look into the Future - OOD . ALEXANDROV GROUP CORPORATION . Alfred C.Toepfer International . Alliance One Tobacco New Project on the Way in Sofia ...... 18 Bulgaria . Allied Pickfords Bulgaria . Alter Ego Company OOD . American College of Sofia . American By Ekaterina Nacheva, Marketing & Lease Manager English Academy . American Resarch Center in Sofia . American University in Bulgaria (AUBG) . Anglo- American School of Sofia . Anton Preslavski, Liebert Hiross . APIS - BULGARIA Ltd. . APOLO Ltd. . Aries Commerce . Ashtrom International Ltd. . Association Integra-BDS . Astra Zeneca UK Ltd. . Astral Holidays Dubai Investors Bid for Holiday AD . AT Engineering 2000 Ltd. . Auditing Company Versi and Partners Ltd. . AVON Cosmetics Bulgaria Ltd. Complex in ...... 20 . BAE Systems International Ltd. . Balkan Accession Fund . Balkan News Corporation Plc. . Balkan Star Automotive EOOD . Baxter AG . Bayer Bulgaria EOOD . BC Serdon . Berlitz Schools of Languages . amcham meetings BG Radio . BMG Ltd. . Bodyguard-Fire-K Ltd. . Borislav Boyanov & Co. . Braykov's Legal Office . British American Tobacco . Brown Forman Beverages Worldwide Sofia Branch LLC . Bulgaria Platinum Group AmCham Meets Sofia Mayor ...... 22 EAD . Bulgarian American Enterprise Fund . Bulgarian Charities Aid Foundation (BCAF) . Bulgarian Land Development EAD . Bulgarian Telecommunications Company AD . Business Media Group . Business Park Boiko Borissov:Our city is the Sofia EOOD . CallPoint New Europe AD . Candole Partners EOOD . Car Rental Bulgaria Ltd. . Carlsberg undisputed leader in Bulgaria's economy ...... 22 Bulgaria AD . Cefin Bulgaria EOOD (IVECO dealer) . Center for the Study of Democracy . CENTURY 21 Bulgaria . Chelopech Mining EAD . Chris Thompson, Independent Consultant . Cisco Systems Bulgaria . news Citibank N.A.- Sofia Branch . City University of Seattle . Cleves EOOD . CMS Cameron McKenna EOOD . Coca-Cola HBC Bulgaria AD . Coface Bulgaria Credit Management Services EOOD . Colgate-Palmolive Chelopech - Gold and Dirt ...... 26 Adria . COLLIERS International . ConsulTeam Recruitment and Selection Ltd. . Cook Communications . By Yuliana Boncheva Corstjens Worlwide Movers Group . CPM Consultancy Sllc . Curtis / Balkan Ltd. . D&IC (Dun and Bradstreet Representative) . DeConi International . Deloitte Bulgaria OOD . DENIMAR Ltd. . Devin AD . DHL Dundee Precious Metals Expects Express Bulgaria Ltd. . Diageo Bulgaria Ltd . Diamed Ltd. . Dimitrov, Petrov & Co. . Djingov, Gouginski, Kyutchukov, & Velichkov . DLA Piper Weiss-Tessbach Branch Sofia . Dobrev, Kinkin & Lyutskanov Law Firm . Governmental "Go Ahead" Soon ...... 32 Domaine Boyar International AD . Dr. Emil Benatov & Partners . Dr. I.S. Greenberg Medical Center, Ellen Ruth By Irina Bacheva Greenberg, Ph.D. . DuPont de Nemours International S.A. . DynCorp International LLC . Economedia AD . Effekten Und Finanz - Sofia AD . Ekotoi - Service Ltd. . Electron Progress EAD . Eli Lilly and Company . analisys Elido (Lamel Ltd.) . Elmec Sport Bulgaria EOOD . Elta consult AD associated partner of CB Richard Ellis for Bulgaria . Emerson Process Management AG . Emporiki Bank Bulgaria EAD . Encouragement Bank AD . The Umbrella that Failed to Open ...... 34 Enel Maritza East 3 AD . Enemona SA . Engineeringservice Sofia Ltd. . Environmental Quality Management, By Boyko Vassilev Inc. . Epsilon Interactive International . Equest EAD . ERATO HOLDING Plc . Ernst & Young Bulgaria . European Bank for Reconstruction and Development (EBRD) . Flying Cargo Bulgaria Ltd. - Licensee of FedEx . amcham events Force Delta Ltd. . Forem Consulting Bulgaria . Fortel Engineering LTD. . Forton International JSCo . Foster Wheeler Energia Polska, Branch Office Bulgaria . Foundation for Local Government Reform . G4S Security Five new AmCham Members Presented ...... 38 Services Bulgaria JSC . General Electric International . General Security ltd. . Genmark Automation Bulgaria Plc. . GlaxoSmithKline . Global Benefits Group GBGI CEE LLC Representrative Office . Goodyear Dunlop csr corner Tires Romania . Grand Hotel Sofia . Grenville Bulgaria . Grey Worldwide Bulgaria EOOD . Hewlett- AmCham Members Asked to Packard Bulgaria Ltd. . Hilton Sofia . Holiday Inn Sofia . Honeywell EOOD . Hotel Yastrebets Wellness & SPA . IBM Bulgaria . IBS Bulgaria Ltd. . Ideal Standard Bulgaria . Immo Industry Bulgaria . In Time Volunteer May 17 ...... 40 Ltd. . Industrial Holding Bulgaria . ING Bank Sofia Branch . Interbrands Marketing & Distribution Inc. OOD . Interdean . International University College . Investbank Plc. . IP Consulting Ltd. . ISI Emerging Enemona Stakes on Energy Markets (Internet Securities, Inc.) . Johnson & Johnson Doo. . Johnson Controls Electronics Bulgaria . Junior Efficiency Projects ...... 41 Achievement Bulgaria . AD . Kamenitza AD . Kamor Auto EOOD . Katilin Popov Enforcement Officers . Kempinski Hotel Grand Arena . Kimimpex Trade and Leasing Ltd. (2be) . Kolbis International Transfer Corporation . KPMG Bulgaria . Kraft Foods Bulgaria . LANDMARK Property Bulgaria . Lexim Be There for the "Ghastly Bunch" ...... 42 Sofia Ltd. . Lindner Immobilien Management EOOD . Lirex BG Ltd. . Lowe Swing Communications . M AmCham Bulgaria Magazine April 2008 By Georgi Ivanov & M Air Cargo Service Bulgaria Ltd. . M3 Communications Group, Inc. A Hill & Knowlton Associate . Magnetic Head Technologies . Maria Vranovska, MD, MBA . Marsh EOOD . MARTERN EOOD . Mathnasium enforcement (Rossimat Ltd.) . MBL Ltd. . McDonald's Bulgaria Ltd. . Mellon Bulgaria EAD . Merck Sharp & Dohme Bulgaria . Mercurius-Sofia . Microsoft Bulgaria . Miltech Ltd. . Mmd, Corporate, Public Affairs & Public A New Project on Cross-border Relations Consultants . Mobiltel EAD . Monbat Plc. . Moody International Ltd. . Moten Sport . Moto- Debt Collection Gets Speed in Bulgaria ...... 44 Pfohe Ltd. . Motorola Bulgaria EAD . National DISTRIBUTORS . NATO Defense College Anciens' Association By Katilin Popov, Enforcement Officer in Sofia . NDT Equipment Supplies Ltd. . Neochimiki Bulgaria S.A. . Neterra Communications . Neumann International AG . New Europe Corporate Advisory . New Europe Directories Bulgaria . Nexcom Bulgaria EAD . On Bulgaria Ltd. . Opet/Aygaz Bulgaria EAD . Oracle East Central Europe Limited - Branch Bulgaria member news . Orbit Ltd. . Orkikem Ltd. . OSG Records Management . Outsource Partners International . Ozone AES Geo Energy Launches Construction Laboratories Bulgaria . PANDA - IP Ltd. . Penev & Partners Law Offices . Penkov, Markov & Partners OOD of a Wind Park ...... 46 . Pfizer Luxembourg SARL, Representation Office Bulgaria . Philip Morris Bulgaria EOOD . Pioneer Semena Bulgaria EOOD . Piraeus Bank Bulgaria AD . Plesio Computers Jsc . Popov Legal Office . Postbank page (Eurobank EFG Bulgaria AD) . PostPath . Praktiker EOOD . Pratt & Whitney . PricewaterhouseCoopers 3 New Laguna: Driving Pleasure with . Procter & Gamble Bulgaria . ProSoft . PSG Payroll Services Ltd. . Radisson SAS Grand Hotel . Complete Peace of Mind ...... 46 Reader's Digest EOOD . Regus Bulgaria Ltd. . Renault Nissan Bulgaria SRL . Rising Force Co., Ltd. . Rockwell/Intelpack . S&T Bulgaria . Sanofi - Aventis Bulgaria EOOD . Scandinavia Motors Ltd. . Schenker TeleLink Launches Education Project ...... 47 EOOD . Schering - Plough Central East - Bulgaria . SEAF Management Bulgaria EOOD . Sheraton Sofia Hotel Balkan . Sherita M Ltd. . Siemens EOOD . Sienit Ltd. . SigmaBleyzer Investment Group LLC - new members ...... 47 Representative Office . SKE Bulgaria EOOD . Sofstroy AD . Soravia Bulgaria Ltd. . Stanton Chase International Bulgaria . Stefan Dimitrov, Norman Realestate Co. Ltd. . Symix Bulgaria OOD . TechnoLogica MBL EOOD . TeleLink EAD . The Coca-Cola Company Bulgaria . Tishman Management Company Ltd. . Tissue Bank Osteocenter Bulgaria EAD . TMF . Totema Engineering . Trans Company Ltd. . VM Finance Group TravelStoreMaker.com . Tumbleweed ® Communications Corporation EOOD . UniCredit Bulbank . Unimasters Logistics Plc . Unique Estates . Unisys Bulgaria Branch . United Bulgarian Bank . United Consulting Ltd. exhibitions . United Healthcare Bulgaria Group of Companies . United Medical Communications . Vaptsarov Holding AD . Vector Management Bulgaria EOOD . Videolux Holding / Technopolis . VIP Security Ltd. . VISA Europe Bulgaria Promoted at Logan Airport ...... 48 . VM Finance Group . VSK Kentavar Ltd. . Welcome to Bulgaria . Westinghouse Energy Systems Bulgaria Branch . World Courier Bulgaria . WorleyParsons Europe Energy Services Ltd. . Wrigley Bulgaria EOOD . Xerox Bulgaria Ltd. . Yavlena EOOD . Zlati Dinev Studio in partnership with Outerbridge/Morgan . market overview Golf for Maniacs… By Mina Tsvetkova

The Bell Tower villa community, located on the Southeast corner of Rama Golf and Villas development near the town of . Golf maniacs in Japan peel off 150,000 Students from the International Tourism The first golf course in Bulgaria - near Euro a year to practice their favorite College have already acquired some the town of Ihtiman - was built in 2000. sport at a specific golf course. The annu- experience in servicing top-class tourists Two more projects were completed and al card in France costs about 50,000 in Europe, the United States and the are already in operation - near Ravno Euro. Americans pay some $3,000 to Caribbean Islands (including at golf Pole, in the Elin Pelin municipality, and in $3,500 per year. The golf mania is tak- courses), and will be able to work at golf . Three of the projects have been ing more and more victims in Korea and projects located along the Black Sea awarded with a "first-class investment" China. coast. The inclusion of Bulgaria in the certificate. Cabland Golf Complex - golf catalogue highlights the objective to was the first to receive such a Will the golf craze reach transform this country into a direct com- certificate. The owners of the company - Bulgaria? petitor to Spain and Portugal, all the the Malta-based Darnik Investment with more so because the golf courses under 80 percent and the Pomorie municipality Symptoms indicate that Bulgaria may be construction near Balchik, , with 20 percent - have invested about included on the list of the leading mar- , Dolna Banya, and 370 million Euro. The bulk of the funds kets, as several projects are being sold Bansko have been designed by world- for the projects were provided by the as "five-star" with quality golf courses class designers. Bulgaria's climate is Gallagher family, who have invested nearby, the British Independent wrote suitable for all-year tourism, the cata- heavily in several golf courses in Spain. 4 several months ago. Bulgaria has already logue claims. The Spanish Ferry Group also received a been included in the golf catalogue of "first-class investor certificate" for the the Association of the British Tour According to data released by the golf course at the village of Katina, near Operators. This country is seen as a BulgariaInvest Agency, Sofia, where the company has invested future golf destination in Southeast about 260 million Leva. According to Europe, and the Dobrudzha Black Sea some 700 million Leva will unofficial information, the company is a shore is emerging as the major golf be invested front for local advertising boss Krassimir tourism destination in Bulgaria for the Gergov. He also owns the St. Sofia Golf

AmCham Bulgaria Magazine April 2008 April Magazine AmCham Bulgaria next several years with at least three in large-scale construction of golf cours- Course in Ravno Pole, which was opened world-class golf courses. es in Bulgaria. in 2004. Gergov plans the construction market overview …and Investors

of golf courses also along the Black Sea coast. Most of the A study conducted by the KPMG consultancy found that:

mushrooming golf course ● There are golf courses in more than 130 countries worldwide, with 59 percent of projects the total in the United States, 20 percent in Europe and 12 percent in Asia.

in the country are located in the northern ● Any person above the age of 12, playing more than eight times a year, may be section of the Black Sea coast. Razlog considered as golfer; the average golfer is about 40, with income above 50,000 and Bansko are not far behind, and both Euro per year, playing golf some 20 times a year. resort centres have started projects for constructing terrains for the golf maniacs. ● There are more than 6,000 golf courses in Europe. Of them, 500 are in Scotland, There are plans for the construction of 43 in the , 15 in Poland, 8 in Hungary and Slovenia each, and 2 some 30 golf courses in Bulgaria in the in Romania. near future. Investors plan to operate the golf courses all the year round, mostly for ● Some 1,000 new golf courses are commissioned every year. foreign tourists. ● More than 56 million persons play golf. The number of European golfers is esti- Vassil Zlatev, father of LUKOil - Bulgaria mated at 6 million, North Americans - more than 28 million, and Japanese - 16 boss Valentin Zlatev, also has the ambi- million. tion to be recognized as a golf investor. The Terra Tour Service company, in ● The annual golf products turnover in the world exceeds $2 billion. which Vassil Zlatev indirectly owns a 50- percent stake, plans to build a golf ● The profit from golf in the United States is estimated at $62.2 million per year, course near Pravets. Golf Club Iber, which makes golf the most profitable sport in the world, exceeding in terms of which was also awarded a "first-class profit the entertainment industry and gambling. investor" certificate, intends to invest ● close to 75 million Leva in a golf course Europeans spend 2.3 billion Euro a year for golf-related travel, and the North near Dolna Banya. The BBSS Gallup co- Americans spend more than $64 billion. owner Kantcho Stoytchev is investing in a ● golf course in the Tabiyata location near Golf tourism brings Scotland some 150 million Euro a year, with one quarter of Balchik. There will be three golf centres this amount coming from U.S. tourists. between the towns of Balchik and ● The United States tops the list in terms of exported golf-related products for $650 Kavarna - one of them will be bordering on the sea and is being built by Swedish million, followed by China with $600 million. manager Bengt-Ake Rees and was ● Japan tops the list in terms of imported golf-related products - $340 million per designed by one of the most famous year. golfers ever, Garry Player. The 70-year AmCham Bulgaria Magazine April 2008

page 5 market overview

old champion is convinced that this will be the best golf centre in the world. May the golf ball turn into a gold mine?

Golf is luxury. For those, who play golf. And for those, who make money out of this business. However, prices in Bulgaria are still low. A standard 18-hole golf game costs 55 Leva, which includes only the fee for using the golf course. An additional 15 Leva is needed to rent equipment. A golf cart, used to ferry players from one tee to the next, costs 25 Leva. Those, who just start to play golf, will need a coach, and a 30-minute lesson costs 15 Leva, and 50 balls would require another 7 Leva. There are also club cards, available at different prices at different golf courses.

A golf course, however, does not make money out of annual fees paid by the Exclusive houses with private swimming pools are available near the golf courses. club members (the golden membership card for the golf course at Ihtiman costs 1,700 Leva), but also by renting the facil- A Place for Maniacs ities on the golf course. A golf project is Golf can be actively played for more than 200 days a year in Bulgaria, at some not only a place for sports and recre- places even for 300 days a year. Bulgaria's high golf season will span from June ation, but also a venue for business con- to September, when it is a low golf season for Spain, Portugal and Cyprus (and tacts and conferences. Investments in partially in Greece and Turkey) due to high temperatures there and the status of golf courses must be programmed for a the golf course terrains. Golfers will be attracted also by natural landmarks, which long period of time - some 10 years, allow the construction of golf courses and various projects, and the immediate according to experts. proximity of top-class spa center and hotels. The available water resources in Bulgaria allow for the quality maintenance of golf terrains (for comparison, the Currently, the construction of a golf maintenance of the more than 300 golf courses in Spain costs more than 500 course in Bulgaria needs some 4-6 mil- million Euro per year). lion Euro, which does not include the rel- evant infrastructure. The final price thus Maintenance is the most expensive item ny owned by brothers Nikolay and depends to a large extend on the terrain in the golf business, as it requires about Kostadin Kaloyanov and by Yordan profile - for instance, whether it is moun- 30,000 to 40,000 Leva per month. Kanazirev, acts both as an investor and tainous or not. The basic standards of contractor. The golf course was designed the golf course are related both to tech- BG Golf Geography by Yan Usmann and is almost complet- nical parameters - game length and ed. It has an area of 900 decares and 18 width, surface areas - and to the location Golf courses, satellite villages and resi- tees. It will be surrounded by residential of the various holes, the distances dential projects are emerging as the new buildings, family houses and a hotel pro- between them and the adjacent facilities. mania among real estate investors in ject with a total of 700 apartments in five Bulgaria. The projects are concentrated separate quarters. The project is sched- A golf course compatible with the applic- around large cities and resorts. The uled for completion next year, but parts able standards would require an overall region around Razlog and Bansko is of it will be commissioned this summer. area of 800 to 1,000 decares. The pur- again becoming a "champion" with a total The investments are expected to rise as chase of the land is a one-time invest- of seven projects. Some of them are high as 130 million Euro. 6 ment, which will swallow a major portion already in construction, while the rest are of the total investment within a very short still on the drawing boards. Six of the golf The floor area of the residential units is time. The problem in Bulgaria lies in the courses will be on the territory of the estimated at a total of 120,000 sq. fact that the areas required for the con- , and one will be in meters. The project will match the five- struction of a golf project must be added Bansko. star criteria, with a modern SPA centre, up from a number of smaller lots, which swimming pools, tennis and volleyball makes things exceptionally difficult. This The first mega-project is already in con- courts and a riding school. The second means that the construction alone of a struction - the Golf Holidays Club project developed by Balkanstroy is the

AmCham Bulgaria Magazine April 2008 April Magazine AmCham Bulgaria high-class 18-hole golf course would with a total area of 1,400 decares at 130-million-Leva Pirin Golf and Country require some 5 to 10 million Euro. Batalovoto area. The Balkanstroy compa- Club in the location Cernako-Batolevoto.

market overview

The company was awarded the "first- and others, will be the investor of this close proximity to Trakiiski Skali, but on class certificate" for its second project, project. the territory of the Balchik municipality. It which is yet to be built. Its project area is being built by the Black Sea Rama is set at 1,000 decares, with 780 Razlog municipality will receive 20 per- company, owned by the advertising boss decares allocated to the golf course. It cent of the shares in White Mountain Krassimir Gergov and sociologists Andrei will also be surrounded by a residential Golf Club against 1,400 decares of land Raichev and Kancho Stoichev. The pro- building, a hotel project and a sports and for a golf course near the village of ject is situated on an area of 1,000 recreation facility. It is scheduled for Godlevo. The project will be financed by decares in Tabiyata area. This project completion three to four years. Austria's Nord Investment. was designed by Garry Player as well. The first golf players will be able to use The third project of Balkanstroy, devel- For the time being, Bansko has only one the course next September. oped jointly with the Razlog municipality, golf project, developed by the Golf Plus the Kulinoto Ski and Golf at Kulinoto company of Bulgaria's first cosmonaut "The project will cost some 100 million area, will offer a combination of golf and Georgi Ivanov. The company bought 370 Euro", Krassimir Gergov, who also chairs ski. Its budget is set at 240 million Leva. decares of municipal land at a tender the Bulgarian Golf Association, said last Besides a golf course, the company will held several years ago. The tender year. The funds for financing of the pro- build also a ski centre with 59 km of ski results were challenged and the imple- ject came from the sale "on the green" tracks and 20 km of lifts. The facilities mentation of the project was delayed. of the 350 family houses on the territo- will be surrounded by hotels and resi- ry of the project. dential projects with 3,000 beds. There will be a There is one more golf course, located The region of Razlog has attracted boom of golf courses along immediately after Black Sea Rama on scores of Bulgarian and foreign investors the Northern Black Sea the way to Balchik. It is being built on a over the last year alone. The price per coast total of 968 dca. The investment is again square meter of land there rose to 100 made by Balkanstroy AD and Barrage Euro. Several large vacation projects are A golf course for 120 million Leva is cur- and Co. EOOD. The project, named in the process of construction, and more rently being built near the village of Lighthouse Golf Resorts, will cost 56 mil- than 1,000 decares in the regions of the Bozhurets near Kavarna. The Trakiiski lion Euro. There will be a professional golf courses have already been pur- Skali project was designed again by the 18-hole golf course, training course, rid- chased. Four of the villages in the legendary Garry Player. The overall ing school, spa center, hotel, shopping Razlog municipalities will also have their design of the complex was made by the centre and luxury residences. golf courses. The local parliament decid- largest company in this sector - WATS. ed at its latest session that the munici- Kavarna Mayor Tsonko Tsonev claims Golf courses will be built also on the ter- pality will participate by a contribution in that this will be the largest investment ritory of the Shabla municipality. The kind in four companies in the estates of ever made along the Northern Black Sea TIM group of companies and the owner the villages of Debarsko, Godlevo, Gorno coast. The mega-project is owned by of the Litex soccer team, Grisha Dragalishte and Dolno Dragalishte. Bulgarian investors, who have registered Ganchev, have demonstrated their inter- Tempe as a company in Austria. est in developing these projects. The project near Debarsko will be the However, it is still too early to specify the fourth financed and built by Balkanstroy. The golf course will be situated on an parameters and the investments. The municipality will contribute in kind a area of 1,800 decares on a site over- total of 1,390 decares of land in the looking the sea. Besides golf courses, Close to 100 million Euro will be invest- Golf and Spa Resort joint-stock the project will have a five-star hotel, 90 ed in golf courses along Bulgaria's company and will have a 30-percent villas and a huge spa centre. The future Southern Black Sea coast, according to stake. complex will also have numerous restau- preliminary data provided by local munic- rants, clubs, a shopping centre and a ipalities. The Spanish company Cabland Razlog Municipality will partner with the yacht port. The project capacity is esti- started the construction of the first pro- British ECPM in a joint-stock company, mated at 700 to 900 beds. The first sec- ject about three years ago. According to called Razlog Golf Club. The municipal- tion must be completed in the summer the design, the huge project will cost ity will acquire a 30-percent stake of 2008, and the next stage is scheduled more than 53 million Euro. The golf against a contribution in kind of 2,235 for completion in 2010. Some 100 of the course will be situated on 2000 decares decares of land near the village of Dolno residential apartments have already been and will have 18 tees. It is a part of a 8 Dragalishte. sold "on the green." mega-project for a luxury residential development with chalets, hotels, shop- Another 1,430 decares of land are to be The idea is that only owners of real ping strips, casino and tennis courts. allocated for the golf course near the vil- estate within the project will be allowed lage of Gorno Dragalishte. It will be built to play golf there. The rest will have to A golf course will be commissioned at by the Razlog Valley Golf and Spa pay an annual fee of 40,000 Euro to the the location of Silihlyarski Yurt near Company, in which the municipality will World Golf Association in order to be . The municipality is a partner own 30 percent of the shares. The able to use the golf course. in Primorsko Golf Company, which

AmCham Bulgaria Magazine April 2008 April Magazine AmCham Bulgaria Valley company, with partners Krassimir invests in the project. The construction Katev, Vladimir Karolev, Angel Lingorski, One more golf course is being built in will cost 12 million Leva. ■

market overview Office Space Market in Sofia Marks Record

Growth By MBL ltd.

Inventory offices in the second half of 2007. The mobile operator Globul also moved to a new corporate head office taking sole tenancy The office space market in Sofia marked yet another strong in Building Six in Business Park Sofia. quarter finishing off the year on an upbeat note. The inventory of Class A and B offices continued to grow after 48,350 sq. Construction Activity meters of new office space was delivered for the last three months of the year bringing the total to 784,000 sq. meters by Construction of office buildings continues to be strong. By the the end of 2007. The record increase is even more impressive on end of December, more than 580,000 sq. meters of Class A and an annual basis after more than 166,500 sq. meters of new B office space is under development in Sofia. The total size of offices were added to the existing stock throughout the year. This planned/proposed office buildings even exceeds that number, number also includes office space in owner occupied buildings bringing the total pipeline over 1,000,000 sq. meters. More than as well as buildings with condo form of ownership. All of the two thirds of the space under development is in suburban areas newly delivered space in Q4 2007 is located in suburban sub- where Tzarigradsko Shosse Corridor is shaping up as the lead- markets. ing office destination. Megapark, Europe Tower, and Sofia Airport Center are among the large-scale office schemes scheduled to Net Absorption break ground in 2008. 10 Following a strong pre-leasing activity as a result of the growing Vacancy demand for modern office space, net absorption recorded anoth- er flagship quarter with 47,710 sq. meters. The annual figure in Vacancy levels continued to decrease in Q4 2007 as office 2007 reached approximately 151,500 sq. meters driven by busi- inventory increased by more than 6 percent and vacant ness expansions. This is a very strong result since new deliver- space grew marginally by 1.7 percent. By the end of 2007, ies totaled 166,500 sq. meters during that period. With some the overall vacancy rate for Class A and B office space in exceptions office developments continue to be delivered with Sofia dropped down to 4.9 percent from 5.1 percent three

AmCham Bulgaria Magazine April 2008 April Magazine AmCham Bulgaria very high pre-lease and pre-sale rates. Some multinational com- months earlier. A couple of properties that were delivered in panies like Actavis and Deloitte relocated their country head the beginning of 2007 and which contributed to the increase market overview

in vacant space continue to struggle.

CBD continues to perform strong with vacancy just below 2 per- cent, followed by suburban and midtown submarkets with 5.6 percent. In addition, midtown vacancy is the only one that record- ed an increase mainly due to one property that was marketed as retail space for most of the year and then listed as Class B office space by the end of Q4. Rental Rates

The average asking rent level for suburban Class A office space posted a notable increase. The last marketed as Class A sub- urban office space at level as low as 12 Euro/sq. meter was leased several months ago. At the same time some landlords are already asking up to 18 Euro/sq. meter. This has led to an increase in the average rent for suburban markets with 14.6 per- cent from Q3 level. As of the end of Q4 2007, asking net rents for prime properties range between 14 Euro and 20 Euro per sq. meter. The last available premium priced office space at 26 Euro/sq. meter in Landmark Centre was also taken up and absorbed in Q4 2007.

On the other hand, average asking net rents for Class B office space remained stable except in the CBD where a 3.3 percent decrease was recorded after some space listed at the unrea- sonable for Class B office space 18 Euro/sq. meter was dis- counted in the offering to 15 Euro/sq. meter in Q4 2007. Rents range between 7.50 Euro/sq. meters and 16 Euro/sq. meter depending on location. 57 percent of the available Class B office space is listed at 10 Euro/sq. meter or less. Investment Market

On the investment side, the market recorded the largest portfolio sale to date worth 210 million Euro. However, apart from six office buildings, the transaction also included retail, flex and land prop- erties. Yields remain higher compared to other established and emerging European markets. That is unlikely to change in the near future due to the effects of U.S. mortgage market meltdown, which is limiting global liquidity and raising the cost of debt and capital. In addition, the international agency Fitch Ratings recent- ly has revised Bulgaria's outlook to negative from stable due to its wide current account deficit. AmCham Bulgaria Magazine April 2008 Market Outlook

Following the record level of new deliveries in the second half of 2007 we forecast 2008 to be even more dynamic, since more than 260,000 sq. meters of Class A and B office space is scheduled for completion. As a consequence net absorption will likely increase from 2007 levels, because a significant amount of page the space expected for delivery is already pre-leased or pre-sold. 11 Vacancy rates are expected to remain stable throughout the Q1 2008. Only a slight increase in vacant space is possible.

Provided that no new projects initiate an active marketing cam- paign with premium or discount rents and no landlords raise their currently listed rents, the average asking rent level is expected to remain stable for a couple of quarters. The average asking Class A rental rate for midtown submarkets, however, could increase somewhat by the end of 2008. ■ market overview Property Investors Project Steep Increase in Commercial Rent Space

Retail Trade for expansion. It will invest some EUR 120mn in the construction of six big Plans announced by property develop- facilities under the Tempo brand. ers indicate that more than 100,000 Separately, Delta Holding wants to take square metres of retail space in large over the two existing HIT retail stores in centres should be added to the market the capital Sofia. Delta Holding will in 2008, which means that the current spend additional EUR 80mn on opening figure will be nearly doubled. Many new 20 medium-sized stores under the shopping centres will be opened in Piccadilly brand. The competition in the cities outside the capital Sofia, with retail segment will further mount with and expected to see the entry of French Carrefour (the sec- their first shopping malls. Bulgaria still ond biggest retail chain worldwide) and occupies the last place in the EU in German Tengelmann. The latter envis- terms of retail space in large multi- ages the opening of some 30 stores functional centres (about 15-16 square (worth EUR 60mn) by March 2009 with metres per 1,000 people) but the situ- its total investment programme being ation will change markedly in the next EUR 250mn for construction of 200 3-4 years, as more than a 10-fold units. The Germans, whose local sub- growth could be expected for the peri- sidiary Immobilia Bulgaria already od in case that all presented projects received bank lending, will operate are implemented. Looking at the loca- under the Plus trade mark. tion of the projected shopping malls, the capital Sofia remains the most Office Buildings attractive place for investors as its rentable retail area in shopping malls is The office space in Sofia increased by expected to reach about 600,000 announced at the end of last year 29% or 116,000 square metres in 2007 square metres in 2010. Varna will follow plans to nearly triple its existing net- to 704,600 square metres at the end of with some 240,000 square metres while work in the country to some 75 units. the year according to estimates of real the third place will be for Plovdiv. But Kaufland, which is the most dynamical- estate consultant Colliers. The robust considering penetration levels (square ly expanding retailer, revealed plans for growth of the office market in the cap- metres per 1,000 inhabitants) the Black investing another EUR 25-30mn this ital is expected to continue, as some Sea city of Varna will hold the leading year in the opening of five stores. The 590,000 square metres of office space position. MBL Consultancy estimates company operates 14 facilities at pre- is under construction. In line with that this indicator will reach 650 square sent and plans to boost their number to expectations, suburban areas account- metres for the city in the mid-term and 40 in future. One of the first entrants, ed for more than 60% of the new sup- concludes that some of the projects for German Metro, also revealed plans for ply, while the rise of inventory in the construction of shopping malls may be expansion and will invest EUR 17mn for broad centre and the central business unsuccessful. The city however relies building a hypermarket in . The district was much lower. This trend will on the big influx of tourists in the sum- plans of Metro envisage construction of be retained in future with nearly 70% of mer months. six new facilities by 2011 with invest- the office space in construction being ments estimated at some EUR 55mn. in suburban areas. Demand continued 12 The retail chains of supermarkets and The new owner of the retail chain to dominate the market and vacancy discount stores are expanding at quick Piccadilly, Serbia's business group rates further declined to mere 4% of at pace as well. The leading retailer Billa Delta has boasted very ambitious plans end-2007. The highest vacancy of 5%

This article is based on extracts from ISI Emerging Markets IntelliNews publications: Bulgaria This Week and Bulgaria Country Report. For more detailed information please contact ISI Emerging Markets office in Sofia at +359 2 8160404 AmCham Bulgaria Magazine April 2008 April Magazine AmCham Bulgaria or [email protected] market overview

is recorded in suburban areas, while the third quarter, which is higher than built-to-suit facilities. Some 46% of the the ones in the central business district the one recorded in the first six months inventory represents warehouses, while and the broad centre stand at 3% and of 2007. The rents are estimated at manufacturing accounts for 25%. 2%, respectively. The expectations of EUR 12-26 per square metre for Class According to Colliers, approximately the real estate consultant are that the A offices and EUR 8-16 per square 70,000 square metres of industrial low vacancy rates will be retained metre for Class B. space is due to be delivered in the first throughout this year and spikes could half of 2008. The new supply can be seen only in the final months of Industrial and Logistic result in a slight increase in the vacan- 2008. Strong demand contributed to Facilities cy rates, which currently stand at only further increase in rents that reached 3%. In Plovdiv, Colliers estimates indus- EUR 15 per square metre. The steep- As regards the industrial segment of trial office space at 600,000 square est rise was recorded in suburban the commercial real estates market, metres at the end of 2007. The district areas. The very strong expansion of several large-scale projects will boost is the second biggest location in the the office market last year was con- supply in the coming years but the country for industrial projects because firmed by data provided by another business will remain heavily concentrat- of its strategic position. It offers sever- commercial property consultant MBL, ed in three settlements -- Sofia, al well-defined industrial zones, which estimating that supply of Class A and Plovdiv, and Varna. Nevertheless, ambi- again are dominated by owner-occu- Class B office space in the capital tious investments are underway in the pied and built-to-suit facilities. The Sofia increased by 8.5% in the third northern cities of Ruse and Shumen. ongoing projects envisage supply of quarter of the year reaching 735,650 Burgas lags considerably behind with additional 77,000 square metres of square metres at the end of 102,000 square metres of contempo- space with half of it representing ware- September. Projects in construction are rary industrial space at the end of houses. Varna, the biggest seaside city expected to raise the count by 520,000 2007. In Sofia, the inventory industrial in the country, did not see any major in 2-3 years. MBL estimated the vacan- space (projects with built-up area of industrial developments in 2007 and the cy rate at 5.1% at the end of more than 2,000 square metres) inventory remained unchanged at September, which is a slight improve- reached 1.2mn square metres at the 300,000 square metres. The main pro- ment from 5.3% three months earlier. It end of 2007. The share of speculative ject in the region is Logistics Park also highlighted the record high absorp- space is 14% (165,000 square metres) Varna, which will offer 80,000 square tion rate of 56,000 square metres in dominated by owner-occupied and metres of rent space this year. ■ AmCham Bulgaria Magazine April 2008

page 13 market overview

Marketing Suite to Serve Sofia Airport Center Tishman International Companies and GE Real Estate Central & Eastern Europe unveiled a state-of-the-art marketing suite for Sofia Airport Center, Bulgaria's newest cutting-edge business complex, on March 5, 2008. Official guests at the ceremony were Minister of European Affairs Gergana Grancharova and Deputy Mayor of Sofia Municipality Minko Gerdjikov.

A first in the Bulgarian real estate market, the 5,000 square-foot marketing suite will serve as an information hub and show- case for Sofia Airport Center. "The goal of this space is to provide a fully interac- tive and user-friendly venue where ten- ants, tenant brokers, and corporate real From left: Minko Gerdjikov, Deputy estate executives can preview the excep- Mayor of Sofia; Gergana tional opportunities available at Sofia Grancharova, Minister of EU Affairs; Airport Center and engage in critical Julian Edwards, General Manager, aspects of the site selection process," Tishman Management Company said Julian Edwards, European managing EOOD; and Jim Rigassio, U.S. Commercial Attache in Bulgaria. director of Tishman International.

Created to exemplify the high standard to which Sofia Airport Center is being designed and built, the marketing suite will feature the full range of space plan- ning and interior design options available Joe Wilson, member of the U.S. to tenants, from the interior open ceil- Congress (right) wrote a letter to ings, to an array of carpeting and tile Arthur Moore, Tishman's Group Financing Director. In the letter, choices to light fixtures, and other cus- Congressman Wilson said that he tom finishes. The marketing suite also appreciated Moore's efforts to advance provides tenants with a glimpse of Sofia U.S.-Bulgarian relations through Airport Center's leading-edge infrastruc- investments. On left is pictured Robert ture, on par with comparable projects in Smart, retired commanding officer of the South Carolina National Air Europe and America, such as its vari- Guard. able air volume HVAC system and raised access floors for wiring, which will be "As seasoned developers of business ing as many as 2.6 million passengers fully visible beneath the glass floor of complexes that are home to industry- per year. After construction, the property the Marketing Suite. Designed to leading global firms, we know how impor- will offer approximately 180,000 sq. address tenants' need for the greatest tant it is for tenants of this caliber to be meters of commercial space in two- to technological capacity, raised floors pro- assured of the quality of the finished three-story retail and other commercial vide easy access to all data, cable and product. We have put a tremendous buildings and low to mid-rise office build- electrical wiring, and are efficient for amount of effort into creating a marketing ings. evolving technology. suite that will be both luxurious and func- tional, providing a productive atmosphere The high-profile property is being devel- 14 Visitors of the marketing suite will also for tenants to be active participants in the oped and managed according to have access to a range of valuable creation of their space, while demonstrat- Western European and U.S. standards, resources, such as on-site planning, ing Tishman's high standard for excel- and will be visible from access roads design, architecture and management lence," said Pepa Dimitrova, director of approaching the Airport. Potential ten- professionals. Two fully equipped confer- operations and development with ants of Sofia Airport Center include ence centers will offer wireless internet Tishman. Now, on its way to becoming a retailers, logistics and storage compa- access and conferencing capabilities, LEEDS certified project, Sofia Airport nies, local and international food com- while a spacious lounge area and restau- Center will occupy a prime site approxi- panies, and businesses and companies

AmCham Bulgaria Magazine April 2008 April Magazine AmCham Bulgaria rant are ideal for hosting lunches and mately three minutes from the new Sofia that need to operate from premises extended meetings. Airport, which is capable of accommodat- adjacent to the airport. ■

market overview

Bourgas Plaza: First of a Kind

3D project of Bourgas Plaza.

Bourgas Plaza will be developed as the Potential customers are more than just in front of the mall. Bourgas Plaza first shopping center in Bourgas and the 445,000 people in total, including the has the unique advantage of being part region, designed according to the best city of Bourgas and the region around it, of a powerful retail destination, which international practices. The investor of as follows: more than 260,000 people gathers in a neighborhood retail giants the project is Gort Holdings and within half an hour drive, more than like METRO, Technomarket, Baumax, Bridgecorp Ltd. As such, the mall will 355,000 people within an hour's drive, and Carrefour. All together these retail- feature spacious facilities, good visibility and more than 445,000 people within an ers benefit significantly from the syner- of the retail stores, and easy navigation hour and a half drive. Additionally, there gies that have been created by comple- of the traffic of visitors throughout the is a seasonal tourist inflow of approxi- menting the offers of each other, thus, mall. The building will consist of two lay- mately one million within an hour's drive. creating an appealing target for con- 16 ers - a ground and a first floor, offering sumers from Bourgas and the region. In a tenant mix which represents prominent Bourgas Plaza is located on addition, there is a huge residential area international and Bulgarian retailers. Transportna Street in a very convenient just across from Bourgas Plaza which According to preliminary plans the pro- and well-connected area in the northern makes the shopping center attractive ject will include: 10,000 square meters part of Bourgas, close to the extension and with the potential to be visited Carrefour Hypermarket; more than 90 of the Trakia Highway coming from throughout the day and the whole week. retail stores; food court; restaurants and Sofia into the city. Transportna Street Bourgas Plaza is easily accessible by cafes; 1,270 open-air parking spaces; leads to the Black Sea resorts of Sunny car and public transportation, with sev-

AmCham Bulgaria Magazine April 2008 April Magazine AmCham Bulgaria GLA of Bourgas Plaza on 27,000 square Beach and Nessebar, meaning there is eral bus lines servicing the area of the meters; intensive car and tourist traffic passing mall. ■ market overview

Cleves Enlarges Luxury Portfolio with 45 Sofia Apartments Cleves, the Sofia investment company The quality of our projects is proven and leasing luxury properties, acquired in we do not compromise with that." March one more building in close prox- imity to downtown Sofia. The deal is esti- Emil Metchikian, general manager of mated at 8.1 million Euro. Boulevard ARCO Invest EOOD, said:"It is a great Residence is constructed by Arco Invest chance and at the same time - a chal- OOD, and is located only five minutes lenge for our team to develop the project from the Alexander Nevski Cathedral, like Boulevard Residence. We are very adjoining four streets: Madrid Boulevard, happy that we have the opportunity, Cherkovna Street, Ljulebourgas Street, senior international business people and together with reputable company like and Maritsa Street. The area of the diplomats working in Sofia. All Cleves Cleves, to realize something valuable and entire lot is 3,800 square meters. The apartments are stylish, interior-designed, impressive." apartments in the 10-story multifunction- fully-furnished, and beautifully equipped. al building are 45 with 60 parking spaces The company owns and operates all the Peter Diakov, general manager of allocated for them. Shops, restaurants, apartments in its portfolio in order to be Cleves EOOD, said: "Arco is a very pro- contemporary offices and an under- able to offer the highest standards of ser- fessional company, and we are pleased to ground parking lot are also stipulated vice. have concluded this agreement with them. except the luxury apartments. According The apartments will be very attractive, to Cleves, the project will be completed Veiko Taevere, CEO of the development and the location is excellent. This acqui- by the end of 2010, and it will be division of Arco Vara AS, said:"This sition fits perfectly with Cleves' strategy of extremely attractive for foreign customers. deal demonstrates the potential for devel- being able to offer for rent up-market Cleves EOOD (www.cleves.bg) is in the opment of the projects in the central parts properties in the best parts of Sofia. In an process of acquiring a 40-million-Euro of Sofia City. It's good to see that our area which already has a good range of portfolio of up-market, newly-built resi- long experience in property developments restaurants, cafes, shops, banks and dential property in the best areas of brings success also on the foreign mar- schools, these apartments will appeal to Sofia. The company focuses on the top- kets. Our strategy is focused on projects the diplomats and international compa- end of the rentals market; its clients are with good location and built infrastructure. nies who are Cleves' primary clients." ■ AmCham Bulgaria Magazine April 2008

page 17 market overview

A Look into the Future - New Project on the Way in Sofia MEGAPARK will meet tomorrow's standards today By Ekaterina Nacheva, Marketing & Lease Manager Soravia Bulgaria team is extremely glad to announce the forthcoming launch of its new project in Sofia - the powerful and futuristic MEGAPARK complex. The project is designed by the prominent Viennese architectural firm Brunner/ A&GP International and now, assumed by U.M.A. Architektur Ziviltechniker GmbH.

The newest challenging project will be realized under the conditions of a strong competition on the office real estates market in Sofia. Many huge projects are in the pipeline as among the major pro- jects, whose delivery is expected to influence the market in the next two years, is MEGAPARK.

MEGAPARK has many competitive prior- ities as one of them is its prime location. Located in the Eastern part of the capi- tal Sofia, on one of the newly formed business districts - Tsarigradsko Shosse Boulevard, which is also one of the most important entrances and exits of the city. The complex is in the immediate vicinity of the intersection leading to Sofia Airport, the city center and the South- East regions of the capital and thus is ideally situated for both transport and local entertainment.

Location is just the first strength. The System, high speed elevators, indepen- hotels, shopping parks and residential project will offer buildings of approxi- dent power generator, 24/7 security, buildings in various European countries. mately 111 000 m2 built-up area most of video monitoring etc. Construction works All the projects are rented out or sold to which office space. MEGAPARK fea- will be done in three stages - first is the well-known international companies such tures more than 50 000 m2 of Class "A" biggest office part together with the as Hilton, UniCredito Bank Group, Euro office space, 3 500 m2 of ground floor retail part; second is the hotel develop- Bank, Price Waterhouse Coopers, SAP, retail space, and a separate hotel with ment and the third stage is a separate DHL, Siemens, LG Electronics, Johnson SPA and conference center. Most impor- office building which you can see on the Controls etc. 18 tant in traffic-shocked Sofia, MEGA- picture below. All three stages are com- PARK comes equipped with two levels bined in one communicative main body In Sofia, Soravia Real Estate is present- underground parking, as well as above- of the complex. ed through Soravia Bulgaria's branch ground parking for the complex guests office and has developed three office and visitors. The complex includes MEGAPARK is a project of Soravia Real buildings, entirely rented out and sold to everything 21st Century businesses Estate, part of Soravia Group, based in international investors - International needs: office space with flexible floor Austria. Soravia Real Estate is one of the Business Center /headquarter of plans, pleasant work environments, major real estates developers in the CEE Globul/, Soravia Center /headquarter of

AmCham Bulgaria Magazine April 2008 April Magazine AmCham Bulgaria recreational area with coffee shops, food Area with large portfolio of developed PostBank/ and EUROPARK /headquarter corners, bank office, beauty shop, HVAC and successfully realized office centers, of Johnson Controls/. ■

market overview

Dubai Investors Bid for Holiday Complex in Borovets

Riverland will be an outstanding residential complex, with low-rise buildings and a plenty of green areas in between, styled as an English park. In the first three months of 2008 Bulgarian Land Development Plc. (BLD) presented three of its projects at five of the biggest property exhibitions in Romania, Russia, Denmark, Dubai and Cannes (MIPIM). At the International Property Show in Dubai, BLD was the only Bulgarian developer, who drew world leading investors' attention towards the booming property market in Bulgaria.

The show was held for the fourth time and featured prime real estate projects across the globe ranging from commer- cial properties to high and low-density residential developments, distinctive leisure and shopping centres as well as The International Property Show in Dubai was attractive, with eye-catching lights. upscale resorts and hotels. The event is lent investment opportunity in regard with "We are very satisfied with our presen- also regarded as a powerful networking the Super Borovets project. tation in Dubai and we are going to platform that attracts high net-worth expand our operations in the UAE mar- investors, and leading players in the local, Riverland will be an outstanding resi- ket significantly," said Dimitar Savov, regional, and international property mar- dential complex, with low-rise buildings executive director of BLD at the event. kets, and other related industries. and a plenty of green areas in between, Talking about his future plans, he styled as an English park. Amenities of revealed that BLD's marketing strategy Even positioned against well-known prop- the resort will include two swimming includes participation in another three erty destinations such as Malaysia, pools (outdoor and indoor) as the out- exhibitions by the end of the year - Singapore, Thailand, Germany, the United door one will act as a skating rink in BalPex in Sofia, KIPS in Kuwait and States and Dubai, Bulgaria received high winter, bowling, spa and fitness leisure CEPIF in Poland, the latter being the marks for its diverse nature and mar- centre, a business office with a confer- biggest property investment event for 20 velous investment opportunities. BLD's ence hall, a ski wardrobe, a lobby bar, Eastern Europe. stand enjoyed a great deal of interest two restaurant and a piazza cafe, sport from the more than 27,000 visitors of the facilities and children playground, retail The other two residential developments, show and the company accomplished a area. which BLD presented, were July Morning lot of business contacts. Seaside Resort in Kavarna and Harmony BLD will invest more than 27 million Euro Hills (near ), which had been In the focus of attention was Riverland in the development of the project. The acknowledged as "Best Affordable Ski & Leisure Resort, BLD's latest holiday company forecasts that more than 30 Development" worldwide by the presti-

AmCham Bulgaria Magazine April 2008 April Magazine AmCham Bulgaria development in Borovets due to the percent of the future owners of the prop- gious British magazine Homes Overseas exclusive natural environment and excel- erty will be Bulgarian residents. last year. ■

amcham meetings AmCham Meets Sofia Mayor Infrastructure, privatization, social issues shared during business meeting with municipality

From Left: Traianka Orfanidu, President of Force Delta, U.S. Ambassador to Bulgaria John Beyrle, Mayor of Sofia Boyko Borissov, and Borislav Boyanov, AmCham President. The guests provoked a lot of questions and comments from members. A recent business breakfast with Sofia Mayor Boyko Borissov Despite the problems with the executive power, the municipal- attracted the interest of the AmCham community and ity is doing its job, so the investors are invited to our projects, Bulgarian media. The event provoked an extensive discussion Borissov went on saying. There is a 27-percent increase of the on social, economical and financial issues. Special guests FDI to the capital in comparison to 2006, and the amount of were Borissov's deputy mayors, U.S. Ambassador John Beyrle, FDI in Sofia is 3 billion Euro, which makes 53 percent of the and 120 AmCham member companies. total investments in Bulgaria.

The mayor said that the investment priorities of Sofia include The speeches of Mayor Borissov and Sofia Chief Architect further extension of the metro system, better treatment of Peter Dikov provoked a lot of questions among the members. waste, and improvements in the road infrastructure. The mayor Borislav Stratev, country leader of Deloitte Bulgaria, inquired invited businesses to make their investments in city projects, about the time schedule of the building of underground park- having in mind the analysis of the credit rating agency ing lots in the capital. Answering that question, the chief Standard Poor's, which has increased the rating of Sofia to architect said Sofia is to launch bids for the construction of BB+ with a positive outlook. Before the businesses and the five underground car parks: two of them will be at the metro U.S. ambassador, Borissov reported very good budget perfor- stations near TSUM and in the so-called Cross area in mance of the municipality for 2006-2007. Lozenets; the other one would be at Vazrajdane Square, Tsar Boris Blvd., and Tsar Osvoboditel Blvd. The bids will start 22 "Unfortunately, for the 1 billion Leva that we are going to be before the end of the month and the planned parking capac- provided to the budget for 2008 from the income taxes of Sofia ity will amount to 4,000 places. Until the end of the month, residents, we expect to receive only 200 million Leva in state the municipality will announce tenders for more than 60 pub- subsidies", Borissov said. He accused the government of delib- lic parking lots, Peter Dikov said. The unclear legal scheme erate cutting the money for the capital, by saying that "the has obstructed for more than two years the procedures for municipality is working very well, but its salary is lowered." public parking lots but the municipality is ready to face this critical issue. "Every year Sofia increases the revenues to the budget by

AmCham Bulgaria Magazine April 2008 April Magazine AmCham Bulgaria more than 150 million Leva, and in return the Bulgarian gov- The municipality has 20 ready projects for smaller garages, ernment constantly reduces the subsidies," Borissov said. Dikov added. The municipality is working hard on the con- amcham meetings

From Left: Teodor Milev, Partners in Learning Lead Central and Eastern Europe (CEE), Microsoft, Kenneth Lefkowitz, AmCham Vice President and Managing Partner of NECA, Andon Ichev, National Advisor for Bulgaria, General Electric International, and Stefan Ivanov, Citigroup Country Officer. struction of the so-called South Arc of Sofia, as well as on the "This is an energy project that is of a great importance to us, North Speedy Tangent, so that the drivers do not cross the and we aim at a procedure that will satisfy the investors, not centre of Sofia when heading for Plovdiv from Lyulin district, at one that will be quick and not transparent," Zheliazkov said. the chief architect said. According to municipality's Minko Gerdjikov, the elections will not hamper the conclusion of the project. In fact, he remind- Kenneth Lefkowitz, AmCham vice president, raised the ques- ed of some other big projects of interest to the investors: the tion with the privatization of the Sofia Thermal Power Plant, metro system, and the plant for waste processing. pointing at some investors' fears about time and the coming elections. The municipality's chief secretary Rossen "The municipality is very successful at increasing the rev- Zheliazkov said that the major obstacles come from the own- enues, so that businessmen can invest in the city," Gerdjikov ership, which is spread between municipality with 58 percent, said when asked for comment by Mariana Menzies, Euromax and the state with 42 percent. Zheliazkov assured that this pri- resources consultant, on the increased credit rating of Sofia. vatization is a priority project and up until middle of the next According to Gerdjikov, the municipality has the administrative year the tender procedure will end up. potential for absorbing the European Union funding. "We have AmCham Bulgaria Magazine April 2008

page 23

Mr. Anthony Hassiotis, CEO and Chairman of MB of Postbank welcomes the Mr. Peter Dikov, Chief Architect of Sofia made a detailed presentation on the Mayor of Sofia Boyko Borissov. future municipality projects. amcham meetings

Boiko Boryssov: Our city is the undisputed leader in Bulgaria's Mr. Minko Gerdjikov, deputy mayor at Sofia municipality, elaborating on the issues raised by the AmCham members. envisaged record financial resources for projects, as well as economy resources for alienating of terrains and buildings," he added. - Mayor Borissov, how would you describe the investment climate in Bulgaria's capital city - Sofia? Yordanka Fandakova, deputy mayor for culture and education, elaborated on the issue raised by Teodor Milev of Microsoft on - The international rating agency Standard & Poor's upgraded the state of the primary and secondary schools and the need the perspective of Sofia's credit rating, setting it currently at to make them more European like. According to Fandakova, BB+ with a positive outlook. Sofia accounts for 16 percent of there is a lack of an integral state policy to face the many the country's population and generates more than 30 percent issues in the education process, and unfortunately the munic- of the national gross domestic product. The leading role of ipality has limited responsibility to proceed. "I hope the decen- Sofia in Bulgaria's economy is boosted by the presence of tralization will mean more involvement of the municipality, so main offices of top local and international banks and compa- that the education becomes more practical," she said. nies, including of course those of the large U.S. companies. Direct foreign investments in Sofia rose by 27 percent in 2006 Katilin Popov, enforcement officer, asked whether the munici- to about $3 billion, which amounts to 53 percent of all foreign pality has plans for using private enforcement officers in col- investments in Bulgaria. This tendency is expected to persist lecting municipality debts. Gerdjikov assured there were dis- throughout 2008 and the next several years. Bulgaria's acces- cussions on the matter, and the municipality will do that. Some sion to the EU in 2007 resulted in a renewed foreign interest 20 percent of the companies have not paid yet their garbage towards this country. fees and this is a problem for the municipality, he also said. Kremikovtsi alone has debts of 5 million Leva. Another issue - How would you define the relations between the central is the low tax assessment of the prestigious buildings in the and the local authorities? capital, including embassies, which are estimated at the 200,000 Leva on average. - In order to be fully frank to all potential investors, I have to emphasize that Bulgaria still lags behind in terms of financial In his presentation, during the breakfast, Gerdjikov said that for decentralization and the state is draining four fifths of the finan- the last two years his team has succeeded very much in cial resources of the capital city. Sofia contributes close to 1 increasing of the municipal revenues. At present, the munici- billion Leva to the state treasury and receives back less than pality has collected 320 million Leva, thanks to the better orga- 200 million Leva. The capacity of the municipality to increase nization, and in contrast to two years ago when the amount its revenue has been improved after the state decided to grant was 124 million Leva. the local administrations the right to raise the rates of property taxes within specific boundaries. The local authorities are bet- Miroslav Ivanov, American English Academy (AEA), suggested ter at managing their assets and the possibility for the city to a social incentive of helping the youngsters from the troubled manage its own taxes has resulted in increased of tax revenue. Petko Slaveykov Orphanage House through the construction of apartments for the children there, when they reach age of 18. - Is the Municipality capable of protecting foreign invest- 24 The municipality representative assured of their readiness to ments? meet with the AEA and further discuss the opportunities. - The transparent management I have promised Sofia Citizens In the context of infrastructural, organizational, and environ- is a guarantee for the absence of corruption in the municipal mental matters, including cleanness of the capital, AmCham structures. Immediately after I assumed my position, I initiated President Borislav Boyanov found a good occasion to mention inspections of all municipal companies and referred to the pros- a new AmCham initiative. AmCham members were invited to ecution all company managers, for whom there was evidence participate in the community service days that the chamber is of misappropriation. It is a fact that the Municipality sold one

AmCham Bulgaria Magazine April 2008 April Magazine AmCham Bulgaria considering to do as part of its corporate social activities. of its companies at a price, which was two times higher that (Read more on this initiative on page 38). ■ the price paid for the national flag carrier BGA Balkan, which amcham meetings

Boyko Borissov was born on July 13, 1959, in the town of Bankya. He graduated the Ministry of the Interior School as a firefighter. He lectured at the Ministry of the Interior Academy until 1990. He founded the Ipon-1 OOD in 1991. Borissov was appointed as Chief Secretary of the Ministry of the Interior, with the mili- tary rank of colonel. He was promoted to Major General on January 2001, and two years later to Lieutenant General. Borissov resigned when Rumen Petkov, of the Bulgarian Socialist Party (BSP), was appointed as the minister of the interior. He was elected to the National Assembly on the list of the National Movement Simeon II (NMS), but later refused to enter the Parliament. He preferred to run for the mayor of Sofia in 2005, where he won with a solid majority. was sold by the State. In practical terms this means that the employ 31 percent of the aggregate Sofia manpower and gen- national bulldozers were more expensive than the state-owned erate 64 percent of all revenue from sales. These two sectors aircraft. are followed by industry and construction. Unemployment is Sofia is estimated at 2.4 percent, which is way below the coun- - Which are the sectors predominantly targeted by investors, try's average of 9 percent. All the same, a large number of well and which are the sectors, which still need an influx of trained young people has left this country. The better and more funds? diverse job opportunities in Sofia, the training programs and re- employment have attracted a large number of people to Sofia - Investments in Sofia are made mainly in real estate, building from other regions of the country. Unfortunately, living standards construction, and financial services. A number of shopping remain at a low level. In terms of GDP per capita Sofia is at a malls were commissioned over the last several years. The ambi- par with Bucharest and Saint Petersburg. According to adjust- tions of our team are to develop high-tech productions and to ments made on the basis of buying power parity, the level of create new recreation zones - parks, sports and recreation living standards is as low as 60 to 65 percent of the EU aver- facilities. There is still a demand for residential housing, which age. would assure a higher standard of living. - What are the resources available to Sofia? What are the - What are the priorities of the municipality? Which are the advantages in the "battle for the city" aimed at transform- priority projects that will be initiated in 2008 and beyond? ing it into a European-level capital?

- Sofia City Municipality plans to embark on an ambitious - Sofia has a unique geographic location. Its is the administra- investment program fore the next three to five years. The pri- tive and cultural centre of Bulgaria. This a green and an excep- orities of my team are focused on the accelerated implemen- tionally beautiful city with healing spa, rich historical heritage tation of a large number of necessary investment projects, and opportunities for combining cultural and business tourism. related to the expansion of the underground metropolitan net- Bulgarians are cordial, well educated and professionally trained work, rehabilitation of the existing infrastructure, and the con- people, who are looking for opportunities to manifest their capa- struction of new roads and parking lots, and to solving the bilities and for professional development. waste issue. We have allocated a major portion of the budget AmCham Bulgaria Magazine April 2008 this year to the construction of new kindergartens, which is - How could the problem with the congested traffic in Sofia scheduled to start before the end of this year. The Municipality be resolved? By restricting the influx of more citizens with will rely for the implementation of these projects to the finan- their own vehicles, or by some other efficient measures? cial support also by the State, the EU funds and privatization revenues. The rehabilitation of the schools and the construction - The only way is to stop the large-scale influx of people to the of new kindergartens are of prime importance for the capital capital city. All systems, which we have proposed, which we city. The investment program of the Municipality until 2010 have introduced or which are being developed with the objec- page requires a total of 1.4 million Leva, and will be financed, accord- tive to optimize vehicles traffic, are measures that would have 25 ing to the budget plan, by state subsidies, by our own sources an effect in a city with no more than 800,000 to 900,000 motor of funds, by state-guaranteed credits and by funds received vehicles. However, at the current rate of migration to Sofia, we from the EU. could not act as adequately and quickly. This does not mean that we shall not be able to construct the necessary alternative - What are the leading sectors of the local economy and roads, which are designed to alleviate the motor vehicles traffic what is the situation on the labor market? in the city. At the same time, once the underground metropoli- tan system is completed, we could introduce drastic restrictions - Municipal economy is growing at a steady rate. Trade and to entering the city centre. But in order to introduce paid transportation are the leading sector of the economy, as they access, we have to provide an alternative to the traffic. ■ news

Chelopech - Gold and Dirt

The incredible twists of fate encountered by a Canadian company in Bulgaria By Yuliana Boncheva The pains and suffering of a foreign Bulgaria the perfect investment. sioned under the pressure exerted by investor in Bulgaria made Bulgarians However, the company has stumbled environmental organizations. aware of the fact they are all living in the over the last two years on unexpected European Klondike. The gold deposit at obstacle to its plans for expanding its The state-owned Chelopech EOOD Chelopech, located some 40 km away presence in Bulgaria - the silence of a established in 1993 a joint company from the capital city of Sofia, has minister. Confused and nervous with the Irish Navan Resources Plc, emerged as being among the richest in because of the unclear position of the which restarted mining operations in Europe, perhaps even No. 1. The ore government, foreign investors has filed 1994. The state-owned company was mined there, besides gold, contains many a complaint with the European privatized in 1999 and a new company, other useful minerals. Commission and threatened that it will Navan Chelopech AD was created; the file a case for $1 billion at an interna- new company was granted a conces- As it often happens, however, there is tional court of arbitration. Sofia sion for exploiting the deposit, at a fee always a drop of tar in the barrel of expressly created an ad-hoc group with of 1.5 percent payable to the state bud- amber-coloured honey. The riches at three parliamentary deputies as mem- get. Three years later, in late 2002, the Chelopech are far from being the easiest bers. owner of Navan went bankrupt. The to mine, as the ore is richly dressed with main creditor of the Irish company, poisonous arsenic. The Canadian Background Deutsche Bank, assumed the manage- Dundee Precious Metals (DPM) compa- ment of the mining complex in ny obviously knows how to deal with the The Chelopech deposit, located on the Chelopech, at the same time looking for dangerous element. It was not prepared, southern slopes of the Balkan Mountain, a new buyer. Dundee Precious Metals 26 however, for the bureaucratic traps and attracted the attention of geologists as Inc. acquired Navan Mining Plc in other challenges it has encountered in early as 1840. Operations there started in September 2003, and several months the Bulgarian Klondike. the middle of the 20th century. Initially, the later, through its daughter company mine and the processing factory produced Chelopech Mining EAD, signed with the DPM has been managing the only several thousand tons of material. Bulgaria's Ministry of Economy a sup- Chelopech deposit since 2003 and is The mining operation was expanded in the plementary agreement to the conces- extracting a million tons of gold-copper- 1970s, and a new processing factory was sion agreement for the mining of miner- pyrite concentrate a year. The rising built. However, stringent environmental al resources, reducing the fees payable

AmCham Bulgaria Magazine April 2008 April Magazine AmCham Bulgaria prices of metals on the world's metals norms were enacted in Bulgaria in 1999, to the state budget to 0.75 percent a exchanges make the business in and the whole complex was decommis- year, down from the initial 1.5 percent. news

For start-up geologists drove the owner of the Chelopech mine experts, hired by the two municipalities, to bankruptcy. gave a positive assessment of the pro- The Chelopech deposit is unique - the ject. The environment impact report was ore contains many precious components, That is how the new savior - DPM - approved also by the Supreme but the percentage of base metals - cop- came to the fore. Laurence Marsland, Environment Expert Council of the per and gold - is low, while the presence Chelopech Mining CEO, was quoted in Ministry of Environment and Waters. of pyrite, arsenic and other mixtures 2004 as saying: Navan Mining failed, require the application of more complex because they had many projects all over The daughter company Chelopech and more expensive technologies for the Europe and because, at that time, the Mining signed also a contract for the extraction of the usable components and prices of metals went steeply down. constitution of a public supervisory for the safe removal of the highly toxic Unlike Navan, DPM concentrated its council - with the participation of com- arsenic. Currently, Bulgaria does not have efforts exclusively on its undertakings in munity representatives from Chelopech, the required modern and environment- Bulgaria. of syndicates and of the mining opera- compliant processing installations; that is tion management; the task of the coun- why the gold-copper-pyrite concentrate is The Canadian company developed an cil was to monitor whether the investor exported. There are only a few states in ambitious program, based on the strictly complies with the assumed envi- the world that would accept such con- increase of the annual ore output from ronmental and social commitments. tracts as ores with similar composition 1 million to 3 million tons per year, and are rare. For instance, the Marta mine in on the construction of an installation for However, the project was stranded New Zealand, which has its own installa- the on-site production of end metals somewhere at the top floors of the tion for arsenic extraction, is similar to (copper and gold). The DPM Board of Ministry of Environment and Waters. Chelopech. The concentrate exported Directors approved an investment plan Minister Cevdet Chakarov did not put his from Bulgaria is transported to faraway for $150 million. These investments were signature on the package of documents. destinations like Canada, Chile and compulsory, as the company found - The foreign investor fell into the trap of Namibia. upon taking control over the mine - out- the ambiguous "refusal by default," or dated equipment and environmental "refusal by silence," as the term is pop- The arsenic issue used to be resolved problems, accumulated in the course of ularly known, although the effective leg- on-site until the 1990s, mainly by mixing decades. It was the Canadians, who - islation sets an imperative time limit for the ore extracted at Chelopech with for the first time in the half-century his- the minister to say "yes" or "no" to the arsenic-free ores from the Medet and tory of the mine - embarked on re-cul- project proposal. Elatzite deposits nearby. The toxic com- tivation of the environment. They plant- ponent was additionally neutralized by ed bushes and trees on land, which was Instead of approving or cancelling the metallurgical processing, for which the cleaned of toxic waste. project, Cevdet Chakarov started pro- copper mining plant in Pirdop (now tracting his response, stating that the Cumerio Med) acquired special technol- Besides expanding output, DPM pro- Chavdar municipality does not approve ogy and installations. posed to construct, in close proximity to the new technology and that many envi- the gold deposit in Chelopech, also a ronmental organizations are protesting The twists of fate processing installation, which would be against the plans outlined by DPM. used to extract the fearsome arsenic The processing of arsenic containing and produce pure copper and gold. The The (un)wanted investor concentrates at the Pirdop metallurgical problem is that the installation would use plant was decommissioned after 1990 toxic substances - cyanides. The The government in Sofia sent out the under the pressure exerted by green Canadians claim they were planning to clear message that it considers DPM as organizations. As a result, the Chelopech introduce the most modern versions of a special partner as early as 2005. The mine was closed for three years. A sav- the cyanide technology, which were fully company was awarded two "first-class AmCham Bulgaria Magazine April 2008 ior emerged in 1993 - the Irish Navan compliant with the strict EU standards. investor" certificates - for Chelopech Mining bought the installations and was They stressed that similar technologies and for its project for the gold deposit awarded a concession to extract copper are employed elsewhere in the EU. near Krumovgrad. The first-class and gold. The Irish proposed their own Bulgarian industry is also using cyanides investor certificate is the highest form of technology; however, their know-how was and imports and stores some 1,200 tons support the Bulgarian state can provide never commissioned. The company start- of cyanides each year. to a company. The certificates provides ed exporting the concentrate for pro- for accelerated procedures, covering the The silence of the Ministry page cessing outside Bulgaria. costs for the development of infrastruc- 27 of Environment and Waters ture and other preferences. During the same period however metal prices were going down - ($1,800 per ton The Dundee project embarked along the A year later, Chelopech Mining, the of copper and $250 per troy ounce of standard procedure of obtaining the rel- daughter company of DPM in Chelopech, gold). The unfavorable economic condi- evant permits. An assessment report on was the first Bulgarian company ever tions, the technological problems, the the impact on the environment was pre- awarded with the international "Golden high cost of underground mining, the high pared, two public debate sessions were Apple" award. The prize of the British transportation and processing costs, and held in December 2005 - in the villages environmental Green Organization is the extraordinary environmental costs of Chelopech and Chavdar. Independent awarded for the best practices in pro- news

tecting the environment in Europe. movements joined the dispute. The ten- Stanishev added some "heavy artillery" - sion made the gold concession into a three parliamentary deputies, one from It was ironic that Dundee deposited in special issue on the agenda of the ses- each of the three partners in the ruling 2007 a complaint with the European sions of the National Assembly commis- coalition. Petar Kanev from the Bulgarian Commission - the first claim of a com- sions for combat against corruption and Socialist Party (BSP), Milen Velchev from pany against Bulgaria after its accession on environmental issues. The members the National Movement Simeon II (NMS) to the EU. DPM had to file the complaint, of parliament were briefed by the oppos- and Yordan Tsonev from the Movement as it emerged that the Ministry of ing parties but failed to formulate clear for Rights and Freedoms (MRF), togeth- Environment and Waters does not con- and specific recommendations regarding er with government experts, had to pull sider the company a "first-class investor." the future of the concession. out of the fire the "hot Chelopech golden apple". The situation was further confused by Exasperation the fact that the two ministries, which are Meanwhile, the Bulgarian government responsible for gold mining, assumed The complete deadlock forced the com- promulgated a new regulation on calcu- entirely different positions on the issue. pany to search for external leverage on lating the concession fees for mineral the Bulgarian government. It filed a com- resources. The new methodology raised Battles at in the corridors plaint with the European Commission and the concession fees and made it neces- of power threatened with submitting the case to an sary to amend the effective contracts. international court of arbitration with a Despite the fact that the Ministry of claim for damages to the amount of $1 End play Economy and Energy is in charge of the billion. economic aspects of the concession, it It was announced in early March that the was the Ministry of Environment and The world media reported on July 7, political and expert group reached an Waters started raising the issue that the 2007, that the Dutch office of the agreement with Chelopech Mining. Prime contract for the Chelopech gold is not Dundee Precious Metals Inc. (DPM) Minister Stanishev presented the results profitable for the state and that the con- company has deposited a complaint with to the media in person. An agreement cession fee as set out in the contract is the European Commission against the was reached on new concession fees, inexplicably low. At the same time the Bulgarian government. Reuters reported which would increase the revenue to the Ministry of Economy and Energy claimed that the complaint was motivated by budget, at the current metals prices, to that the contract with Dundee is good blocked investments for $250 million, and more than 51 million Leva, up from a enough. The ministry headed by that DPM calls on the EC to exert pres- token 1.7 Leva million in 2007, the prime Chakarov failed to come up with a posi- sure on Minister Cevdet Chakarov minister said. tion on one more substantive issue - because of his refusal, for more than two whether the DPM technology for extract- years, to issue the required environmen- He added that DPM has assumed the ing gold complies with European stan- tal permits. Reuters noted that environ- commitment to finance in full the techni- dards. mental organizations are lobbying against cal re-cultivation of the region around the development of the mines because Chelopech. The company has also Instead, the environmental minister filed of the proposed cyanide extraction tech- agreed to retract from Brussels its com- a proposal, stating that the State must nology. According to DPM, however, the plaint against Bulgaria. acquire shares in the mine, with the div- inaction of the Ministry of Environment idends due from its stake to be used for and Waters is not motivated by environ- However, these were not the only news. financing a pension fund or environmen- mental considerations but rather by "polit- The Canadian company and the tal investments. The Canadians came up ical interests and corruption". Bulgarian state have agreed to establish with a counter offer - to pay a higher a joint venture for the construction and concession fee and to finance municipal DPM accused Minister Chakarov of vio- operation of a new hydro-metallurgical projects in the region of the gold mining lating Art. 43 and Art 49 of the European installation for the production of copper operation. And since the Ministry of Union Agreement regarding the freedom and gold. Bulgaria will hold a 25-percent Environment and Water continued to stay of creating and free offer of services, Art. stake. It is highly probable that Bulgaria silent on the investment project, the 56 regarding the free movement of capi- will participate via the so called Silver company turned for help to Bulgaria's tals, Art. 37 of the Accession Agreement Fund - which will accumulate funds for Supreme Administrative Court. of 2005 regarding obstructions on the supplementing basic pensions. The Silver domestic market, and others. Fund must be established before the end 28 The Supreme Administrative Court ruled of the year by force of a special legisla- in favour of the company and announced The European Commission launched an tive act. that Minister Cevdet Chakarov must state inspection in response to the complaint clearly his position on the investment filed by the Canadians, which might The idea is the dividends due to the plans of DPM; however, this did not evolve into sanctions and end with a Bulgarian state from the metallurgical change the behaviour of the Ministry of case in court against Bulgaria and heavy operation near Chelopech to be trans- Environment and Waters. financial fines. ferred directly to the pension system sup- port fund, Stanishev explained. Expert

AmCham Bulgaria Magazine April 2008 April Magazine AmCham Bulgaria Business representatives, branch associ- Sofia government reacted by establishing assessments set the expected revenue ations, "green" organizations and civil a working group. Prime Minister to the Silver Fund at 700 million Leva

news

over the next 10 years. The fund will also state will be lower at lower international accumulate revenues from privatization Reuters: While stock markets prices, and will rise in case of an upward as well as a percentage of all conces- plunge in 2008, some of the physi- trend. sion fees collected by the state treasury. cal building blocks of economic growth - metals like copper and alu- There are no versatile formulae and Stanishev stressed that Dundee plans to minium - have defied fears of bad methodologies for calculating conces- invest more than $155 million. He said times ahead for the world economy sion fees. Most of the European states that the government will spare no efforts by jumping in price by as much as apply a fee of 1 to 4 percent of the to have the promised millions invested in 30 percent. net revenue from the respective oper- strict compliance with the European ations. standards for a clean environment. Investors seeking profits as other parts of the economy suffer have Experts claim that, when speaking of The new installation will start producing poured money into the sector, and benefits, one should take into considera- gold bullion after 18 months, according to now some analysts believe that tion also the expenses, which the con- the commission deadline announced by speculative fervour has overcome cessionaire has to make for mining, ore Dundee. fundamental logic. processing, transportation, extraction of metals, and the required investments in After the agreement An argument to justify buying copper new technologies, as well as the unavoid- as it trades at more than $8,000 a able reclamation of the terrains affected The disputes about the concession will ton, more than four times its price by industrial operations. undoubtedly continue. The allegations four years ago, is that strong demand that DPM is profiting too much from from China and other emerging It is expected that the government, as Bulgaria's "golden apple" while paying a economies will offset lower use in a future stakeholder in the new process- token amount to the state, will not be slowing U.S. economy. ing plant, will facilitate its commission- silenced as well. Experts remind howev- ing. A suitable site must be found now er that the prices of metals are very Forecasts of $6,000 to $7,000 per ton, for the installation, which will convert the 30 volatile and the price cycle follows an and even more, are now seen as proba- concentrate into end metals. After the up-and-down pattern. For instance, the ble, although renowned financial estab- site is identified, the joint venture will price of copper, which forms more than lishments like Merrill Lynch expect a have to obtain the required construction 60 percent the revenue from Chelopech, decline to levels of about $2500 per ton. permits. The 25 per cent stake of the vary between $1,600 to $1,800 per ton Bulgarian state in the new company are in 1985, 1998 and 2002, to $3,000 per Because of the volatility of the market, something like insurance for foreign ton in 1990, 1995 and 2004. Both cop- the new Chelopech concession provides investors that the project will no longer per and gold prices have risen to for a flexible concession fee - between 2 stumble on bureaucratic obstacles.

AmCham Bulgaria Magazine April 2008 April Magazine AmCham Bulgaria record-high levels over the last couple and 8 percent, depending on the metals However, no one knows whether this will of years. prices. The amount paid to the Bulgarian be the case… ■

news

Dundee Precious Metals Expects Governmental "Go Ahead" Soon Environmental objections have been largely resolved, says Alex Nestor, senior investment projects manager By Irina Bacheva - Mr. Nestor, on March 10, Dundee Precious Metals achieved an agreement-in-principle with the government to proceed with the development of its projects in exchange of 25 per- cent stake in the future metal processing facility and a high- er royalty calculated on a sliding scale between 2 percent and 8 percent to replace the current 0.75 percent. What is your comment on the terms proposed by the Bulgarian state?

- Firstly, we would like to make it clear that there is no state par- ticipation in the Chelopech mine. The State will have 25 percent ownership in the proposed metals processing facility, within the framework of a public-private partnership (PPP) - through a pension fund, the so called Silver Fund. From a business point of view, this arrangement is acceptable, given the current metal prices. The adoption of a sliding scale of 2 to 8 percent for royalty calculation on the basis of profitability ranging from 10 percent to 60 percent allows for a royalty reduction in the case of a decline in the commodity market.

In regards to the negotiations that were held recently, both par- ties started from quite different positions, however, both sides were able to make concessions which resulted in this agree- ment-in-principle. Here we would like to thank Dragomir Stoynev, advisor to the prime minister, for ensuring an atmosphere of con- structive dialogue during the negotiations. We view these devel- opments as positive since our projects have been stalled since Alex Nestor, Senior Investment Projects Manager for Dundee Precious 2005. Metals Inc.

Additionally, we would like to point out that there has been a lot Alex Nestor has 24 years of international experience in of speculation in the public domain about the so-called 0.75 project management, engineering, construction, fabrication percent royalty. The royalty payable by Dundee is 1.5 percent. and sales in the mining, metallurgical and petrochemical Let me explain where the confusion comes from: back in 2003, industries. Alex commenced work for Dundee Chelopech when Dundee undertook a due diligence to decide on the pur- and Krumovgrad projects as the Senior Investment chase of the Bulgarian assets of Navan, they identified serious Projects Manager of the project management group in late geological, technical, environmental and financial issues gener- 2003 and is responsible for government affairs and PR ated over the years of the mining operations, and primarily at activities. His wealth of project experience and fluency in the time when the state was operating the mine. For this very several languages have led him to work in the USA, reason Dundee and the government agreed in good faith that Canada, Russia, Kazakstan and Bulgaria. Alex Nestor has half of the royalty, i.e., 0.75 percent, should be deposited into been a member of the Professional Engineers of Ontario, an escrow account for financing activities on mitigation of envi- Canada, since 1984 and of the American Society of ronmental risk and rehabilitation of past environmental damages, Mechanical Engineers since 1986. whereas the other half, i.e., 0.75 percent, should be directly 32 payable to the state budget. That was the legal instrument to ing operations. For instance, the royalty rates payable in ensure that the aftermaths of past operations will be rehabilitat- Romania are 2 percent, in Turkey - 3 percent, in Serbia - 2 per- ed, as well as that responsibility will be apportioned equitably. cent. They are calculated as a percentage of the net smelter Further, the funds accumulated in the escrow account are strict- return (NSR), which is different from the gross royalty method ly to be released upon government approval alone, and spent used in Bulgaria. The gross royalty is a percentage of the value only on a list of activities approved by the state. of the metals in the ore mined, and not of the metals recovered. Should NSR method be used for Chelopech, the 1.5 percent roy- From this perspective, should the current royalty rate of 1.5 per- alty would correspond to about 2.4 percent NSR, which is with-

AmCham Bulgaria Magazine April 2008 April Magazine AmCham Bulgaria cent be compared to royalty rates payable in Bulgaria's neigh- in the range of royalties accepted all aver the world for this busi- bouring countries, this rate is perfectly within the norms for min- ness'. news

- What will be the impact of a similar scheme on the invest- major facts. Firstly, in regards to cyanide use: residual cyanide ment climate in the country? will be destroyed to safe levels and no cyanide containing efflu- ents will be discharged into the tailings dam before having been - The prime minister personally stated during the press confer- subjected to the cyanide destruction process. Cyanide levels in ence he gave on the issue that this agreement-in-principle will the effluent to be discharged into the tailings dam will be below guarantee certainty and predictability for Dundee Precious the EU limits of 10 mg/l for new plants (previously the limit was Metals as an investor. This is what investors seek - certainty and 50 mg/l). In Chelopech, for instance, the cyanide levels in the predictability, adherence to legal procedures by the administra- waste will be in the order of 6 - 7 mg/l, whereas in Krumovgrad tion, adequate and efficient legislation. We have already - as low as below 1 mg/l. We are ready to meet with our NGO informed the European Commission, where we had deposited opponents, and explain to them the proposed technology in every our Complaint, that we have reached an agreement with the gov- detail. As a matter of fact we have already extended a number ernment. Naturally, the investment climate of a country is not of invitations to them for both formal and informal meetings, as determined by whether one of numerous investors is happy or per their preference; however, they refuse to meet with us and to unhappy. Dundee's satisfaction now could hardly be used as an listen to what we have to say. They act as if they were afraid to advertisement to attract investors in Bulgaria - as, fortunately for hear and consider our arguments. We cannot call this mature Bulgaria, the discontent of Dundee Precious Metals over the and responsible behaviour. long period of uncertainty was not the factor, we hope, for dri- ving back other investors. Another type of toxic waste mentioned by the opposing NGOs is arsenic. Again, there has been a lot of speculation on the - How do you anticipate your projects to develop from now matter. Arsenic is an element of the Chelopech mineralization, it on? I mean, your Metals Processing Facility Project and the is in the rock and will not be produced, as has incorrectly been Krumovgrad Gold Project? put forward in several statements. With the new technology arsenic will be fixed to a stable and safe compound, called fer- - We have made a commitment to the government to build a ric arsenate, found naturally in the environment as the mineral metal processing facility within 18 months upon receipt of all scorodite." required permits. The number of permits we need to obtain is significant, however, the most important one is the EIA report Industry and environment need to coexist and be managed in a approval by the Ministry of Environment and Waters (MoEW). responsible way and Dundee with its proven track record will We do hope that the approval will come very soon. By this we provide that. We are an environmentally and socially responsible mean that the EIA procedure has been completed and Minister company. Chakarov has only to endorse it. As far as Krumovgrad is con- cerned, the stalled EIA process needs to be restarted. In this - And what if there is a negative EIA Resolution? regard we have been assured by the negotiating team that we will receive the permits in the shortest possible timeframe. The - Given that the draft resolution arrived at by the SEEC and pro- same was confirmed by the prime minister. The negotiations for posed to the Minister was unanimously approved - all compe- the Krumovgrad deposit are ongoing and we do hope that they tent experts came out with positive statements, an eventual neg- will also be finalized in a similar constructive manner. ative resolution could be interpreted as a political act.

- Expert assessments are about to be carried out on the gold - How many jobs does Dundee ensure in Bulgaria? recovery technology by the MoEW and European experts. Local people and environmental organizations claim that this - At present there are about 950 people working at Chelopech, technology will leave highly toxic waste after the copper and which means that employment has increased by 35 percent gold have been recovered. How are you going to convince compared to 2003 when Dundee purchased the assets from these public groups that the technology is safe? Navan. The company is taking great care to train and develop the personnel. We can confidently say that the workforce is our AmCham Bulgaria Magazine April 2008 - The Supreme Expert Environmental Council (SEEC) at the most valuable asset. Further, the trade union organizations in the MoEW approved the proposed technology long time ago. On mining industry acknowledged that our Company had set a stan- many occasions, Bulgarian and foreign professionals have made dard in terms of health and safety systems. We, of course, are convincing statements in support of the technology. The tech- aware that simple introduction of new technologies does not, nology is well known and has been established around the world necessarily, mean progress. I would also like to add that so far for a long time. Further, the specific process and the control Dundee has invested in the order of $160 million in the mechanisms to be applied in Bulgaria are conservative enough Chelopech mine. When we bought the mine we took a great risk page as not to pose any hazard to the community or the environment. because at that time Chelopech was a bankrupt operation with 33 On a number of occasions the minister of environment and uncertain markets for its copper-gold concentrate product and it waters has confirmed that he has no concerns regarding the was losing around $500,000 per month. Significant capital technology; he has made statements to this effect to the media, investment and know-how were required to turn the business as well as to Parliament. around. And we can proudly say that in four years we have reversed the negative trend and succeeded in turning the mine The very process of developing the EIA involved international into one of the most profitable operations in Bulgaria. Regarding experts to ensure that the EIA Report meets all standards and Krumovgrad, the project implementation will ensure approxi- requirements of both Bulgarian and EU legislation. As far as toxic mately 250 direct jobs, with some additional 300 jobs during the waste from gold recovery is concerned, let me point out two construction period. ■ analisys

The Umbrella that Failed to Open The Bucharest NATO summit, Macedonia and the Balkans By Boyko Vassilev

Anything that can go wrong, will. ly be understood, anywhere beyond the boundaries of the Balkans. The highlight is that for more than a decade and a 34 This is not just one of Murphy's infamous laws; this is also half Greece has been creating obstacles before the interna- Principle No. 1 of Balkan geopolitics and Rule No. 1 for any- tional aspirations of this former Yugoslav Republic, because one attempting for the first time to comment on Balkan geopol- Athens considers the name "Macedonia" to be part of the itics. That is what happened again. Macedonia failed to receive Greek heritage. This attitude gave birth to a sequence of an invitation to join NATO on April 2 in Bucharest. drama, concerns, frustrations, emotions and unsuccessful attempts at international mediation. Any compromise was to be If you feel like asking "why", and live more than 500 km away considered as tantamount to treason. from the Balkans, you would have to read at least five pages

AmCham Bulgaria Magazine April 2008 April Magazine AmCham Bulgaria of explanations. I will simply put in a nutshell: Greece vetoed The conflict, actually, and the veto, emerged as virtually Skopje because of a typically Balkan issue, which could hard- unavoidable at least a month before the Bucharest summit. analisys

Delegates and heads of World media disregarded the Macedonian issue. Macedonia states pose for an official appeared in the news as simply one of the problems at the photo after the first session Bucharest summit, alongside the reluctance of Germany and of the three-day NATO France to assume more commitments to the accession of Summit in Bucharest on Georgia and Ukraine, and the general reluctance to send more April the third. troops to the dangerous southern regions of Afghanistan. A friend of mine sent me an SMS from Bucharest, saying "The West - down, Macedonia & Georgia & Ukraine - out, Russia - in".

NATO seems tired and cautious, the dreams have withered away. For some of the NATO members Russia is much more important than the Euro-Atlantic enthusiasm of its former satel- lites. The "color revolutions" in the former Soviet republics were not supported, and this will cost dearly to Western causes there. The hesitancy to step into Georgia and Ukraine may emerge as the most important error made in Bucharest.

However, the Macedonian issue is of a key importance for our region. The Albanians in Macedonia celebrated Kosovo inde- pendence as much as their brethren in Kosovo, perhaps even more. The Albanian national movement grew wings and - although its leaders behave in a "European" manner - it is not impossible that a new Army for the liberation of … anything may emerge either in South Serbia, or in Plav and Gusinje (in Montenegro), or in Western Macedonia. At that, Skopje had a way out -

to quickly hide under NATO’s umbrella. Alas, because Greece blocked the trigger mechanism and Macedonia remained out in the rain.

Immediately before the Bucharest summit, the small Democratic Party of the Albanians, coalition partner of the rul- ing party in Macedonia, VMRO-DPMNE, decided it was the right time to raise several impossible requirements, and imme- diately after that quit the cabinet, thus serving a serious blow to Macedonia's stability. After all, these were steps initiated by an Albanian party in a state, bordering with Kosovo. A state, Allies and mediators, and especially the UN envoy Matthew which has still not reached an agreement on the demarcation Nimetz, an American, tested numerous options, and came up of its Western border, where the Albanian villages in the bor- with der region are becoming more loyal to Pristina than to Skopje. Macedonia's reluctance to recognize Kosovo came as no sur- adjectives attached before the "fearsome" prise and despite initial agreements it did not say "yes" togeth- AmCham Bulgaria Magazine April 2008 name of Macedonia - er with Bulgaria, Hungary and Croatia. Thus, even the deaf understood that that Macedonia is still facing an "Albanian" New (Nova) Macedonia (but there is a newspaper with the problem. same name!), Democratic Republic of Macedonia (oh, what a communist-style name), and lastly - Republic of Macedonia Nobody, however, should consider the Skopje political elite as (Skopje). Anyway, it was not clear at all who disliked most the innocent as a young girl from Struga. On the contrary, the syn- latter proposal - the Macedonians or the Greeks. The drome of the problematic identity created frictions between page Macedonian parliament did not approve this name, as it opted Macedonia and all its neighbours - with Greece because of the 35 to wait and see whether Greece will impose its veto in name, with Bulgaria because of the language, with Albania Bucharest. The Greek cabinet did not accept it as well - was because of the Albanian minority, with Kosovo because of the it actually waiting for the Macedonians to react first? Both par- border, and with Serbia because of the church. Yugoslav ties felt that the "opponent" is making only token concessions. habits, combined with old memories and links charged this elite with a surprising self-confidence. American lobbying in favour of Macedonia failed. The fact that NATO would be expanded by Albania, Croatia and Macedonia Macedonia has rarely acted flexibly and has rarely made com- would be only symbolic (the population of the three states promises; its media waged and continue to wage an unprece- amounts to half the population of Istanbul). dented campaign against Macedonia's neighbours; its leaders member news

behaved and continue to behave as if they are talking, day in and day out, directly to Washington and Moscow - Athens, or Sofia, seemed to be so far down the totem pole! There is something else, which is true for all "Balkanians" but is espe- cially true for the Macedonians: opinion leaders do not know the words "We were wrong."

Nevertheless, an independent, unified and strong Macedonia would be an unchallenged advantage for the whole of South Eastern Europe. Balkan radicals are greedily dreaming of bit- ing off pieces of the Macedonian pie, hence at least some of the fears experienced by Skopje seem to be justified. But, being a Bulgarian, I would say something else: the idea of an independent Macedonia (created by Bulgarian patriots more than a century ago) is the only way to have the whole region calmed down once and forever. NATO Secretary-General Jaap de Hoop Scheffer right, and Romanian President "Switzerland on the Balkans" - Traian Basescu, left, welcome Bulgarian Prime Minister Sergei Stanishev, during an official arrival ceremony for NATO leaders at the Cotroceni Presidential Palace in Bucharest this is not the dream of a Western liberal, but of the almost mythical VMRO conspirer Ivan Mihailov (1896 - 1990). A multi- What comes next? ethnic buffer on the Balkans would benefit all. As far as the Macedonian pie is concerned - this is heavy food, especially ● Macedonia must urgently solve its problem with Greece. for Bulgarians. Instead of speculatively counting which of the NATO member supported them and which did not, Skopje newspapers must Look at Greece. While its government was waging an epic bat- start looking for the mistakes Skopje has made. It was naive tle over the name, the Greek companies bought out the to depart for Bucharest with the belief that George Bush will Macedonian infrastructure, and today they top the list in terms stomp his foot and everything would be resolved; it was unre- of foreign investments. Let the scandal rage, let the Nova alistic to consider that European integration is a process, in Macedonia Daily urge for an embargo against Greece - no one which Macedonia will submit claims and all the rest will jump can ever touch Greek investors. Sooner or later, genuine busi- to comply. Bulgaria's experience indicates that the roles are ness interests will push Athens towards a compromise. This is reversed. so, because - despite the hymns sang by the Greek media to the "brilliant" Bucharest victory of Prime Minister Kostas ● Greece will also seek a way out, and Bulgaria will seek a Karamanlis - Greece is not pleased with the role of the "bad face for its policy towards Macedonia; this face will be either guy" in the EU and NATO, who nags other for inexplicable rea- smiling or angry, or slightly uninterested. sons. ● Albania and Croatia, the other two states of the Adriatic Bulgaria could also merge emotions with pragmatism. Charter, have received guarantees for their security and a Emotions had the upper hand until now. straight stretch of their way to the EU: the logic of expansion is that NATO comes first, and then comes the EU. Sofia was the first to recognize Macedonia, ● NATO suffered a slight disturbance, as Bush, in his lame- duck period, is experiencing leadership problems, while but nevertheless was involved in an absurd dispute about the Sarkozy, still in his upward swing, reinstated France among the non-recognition of the language - a requirement, which is a Atlantic elite. However, if the Alliance (and most of all, the precedent in the diplomatic practice. Sofia made Eltsin turn his future U.S. president) fails to demonstrate sufficient courage back to other vital interests and also recognize Macedonia. and refrain from extending a resolute support to Ukraine and Sofia provided Macedonia with battle tanks, thus providing Georgia, 20 year from now the Bucharest summit will be political support in several key moments - only to reap suspi- referred to simply as the "Putin's last victory." cions and accusations in deviousness later. What about the Balkans? We live in a strange region, where 36 Today, however, Bulgaria's Cabinet is giving different signals - everybody quarrels with everybody, while at the same time all that it will support Macedonia's European integration, but not are willing to become a Switzerland. It is amusing, interesting; at all costs; that it will resist the "theft of history" and anti- still it is obvious that all negative forecasts come true on the Bulgarian campaigns. So far - so good, but we risk to allow Balkans. Given this background, history served us with a the pendulum reach the opposite extremity. Bulgaria cannot unique experiment - a perspective, according to which all and should not follow the road of Greece. Bulgaria must match Balkan states will become allies after five or 10 years. Let's support for Macedonia with conditions; it must protect its inter- call it the NATO perspective. Isn't it interesting what such an ests, as well as Macedonia's independence. This is a difficult unthinkable arrangement will look like? I do not know about

AmCham Bulgaria Magazine April 2008 April Magazine AmCham Bulgaria game, a game of both the heart and mind. Have there ever you, but I am impatiently waiting for it to happen. My curiosity been easy games on the Balkans? has already started to build up. ■

amcham events Five new AmCham Members Presented Well established banks and companies were presented to the AmCham community at the third edition of the AmCham party Meet New Members that was held on March 19 at Flannagans, Radisson SAS Grand Hotel: Emporiki Bank Bulgaria, Kimimpex Trade & Leasing (2be), MBL Ltd. in the real estate sector, United Bulgarian Bank, and VM Finance Group. AmCham President Borislav Boyanov welcomed everybody at the party and invited the five new members of the chamber on the floor.

Athanasios Petropoulos, CEO and chairman of the board at Emporiki Bank Bulgaria, said the bank was established in 1994 under the name Bulgarian Investment Bank. In 2006 Credit Agricole acquired 72 percent of the shares of Emporiki Bank of From Left: Mr. Athanasios Petropoulos, CEO and Chairman of the Management Board, Emporiki Bank Bulgaria, Mr. Borislav Boyanov, President of AmCham Greece, and in 2007 continued to buy more shares. Emporiki is Bulgaria, and Mr. Vlado Lukanov, Head of Risk Management at the United a universal bank offering retail banking, corporate, investment Bulgarian Bank. banking and project finance. According to the five year plan, the bank will expand up to 98 branches in the country.

Kimimpex Trade & Leasing, or well known in public as 2be, was presented by Radina Ralcheva, PR manager at the company. 2be is the only retail chain in Bulgaria cooperating with all Bulgarian telecoms - MTel, Globul and , as well as BTC and the WiMAX operator Max Telecom. 2be is a fully owned Bulgarian company with a 12 years history, Ralcheva also said.

As a full-service real estate firm, MBL Ltd. provides complex solutions for companies and individuals, said Assen Lisev, direc- Mr. Assen Lisev, Director of MBL Ltd. (left) talking to his colleague Manol tor from the company. MBL offers advisory services, makes Goygadjiev, Manager Retail Space. market researches and analyses; in addition, it does valuations, tenant and landlord representation, provides services in invest- ment sales and acquisitions.

Vlado Loukanov, head of risk management at the United Bulgarian Bank, said it is the third largest Bulgarian bank by assets and shareholders' equity, and second in domestic retail and corporate lending. The financial institution is a leader in the card services market and in domestic Leva payments, in Internet banking, and in investment banking.

The publisher of Manager Magazine - VM Finance Group, was Ms. Radina Ralcheva, PR Manager at 2be, is presenting the well known retail presented by Vassil Mirchev, chairman of the board. Three of mobile chain. the VM Finance Group companies operate in the field of high technologies: NET IS SAT - a telecom operator; New System - leader in building automation; NET IS - offering complex infor- mation solutions. Another three are specialized in distribution of 38 FMCG: AVENDI - one on the biggest Bulgarian distribution com- panies, TRD - joint venture with German company Gerb Heinemann, operating on the duty free, travel value and travel free market, and DIREX - prime partner to numerous Bulgarian producers and importers of FMCG.

At the organized raffles the companies gave away many prizes to the winners from the audience. Drinking wine and beer, the Mr. Valentin Georgiev, Executive Director of AmCham Bulgaria discussing

AmCham Bulgaria Magazine April 2008 April Magazine AmCham Bulgaria guests enjoyed the remains of the day in the cozy atmosphere opportunities for future initiatives with Mr. Vassil Mirchev, Chairman of the of the Irish Pub in Sofia. ■ Managing Board of VM Finance Group.

csr corner AmCham Members Asked to Volunteer May 17 Engaging employees in social and envi- ronmental causes by organizing volun- teering days in 2008, under BCAF's pro- ject name "We Give," was the focus of discussions at the AmCham Corporate Social Responsibility committee on March 20, 2008. The CSR Committee was set up in 2005 and has met period- ically over the past few years.

Elitza Barakova, executive director of Bulgarian Charities Aid Foundation (BCAF), and Dana Leff, CEO, AbCRO - Bulgaria, presented a variety of projects to assist environmental and social chari- ties throughout Bulgaria - in Sofia, , Yambol, Rousse, Plovdiv, Pleven. The volunteer projects include working with children with disabilities, repairs at the special care houses, planting of trees, cleaning of gardens and grass Companies, that were presented at the committee meeting, provided some ideas for the volunteering activities: areas. Anglo-American School, CMS Cameron McKenna, Diageo, Kamenitza AD, Ernst&Young, Motorola, State Agency for Information and Communication, US Commercial Service. The committee decided May 17, 2008 and the CSR committee will soon dis- ject," Barakova said. will be the targeted day for AmCham tribute additional information and sign-up members to participate together in vol- sheets for interested companies. By par- In addition to the Service Day, all com- unteer projects identified by BCAF. May ticipating in this day, companies give of panies are encouraged to coordinate 17 is a "working Saturday," offsetting hol- their time and energy but all receive with BCAF to identify worthwhile projects idays around the Labor Day/St. George many benefits. and needy organizations for projects Day period. throughout the year. BCAF will facilitate "Employee inspiration, high morale, and the choice of places and activities to vol- All AmCham members are invited to par- stronger links to communities are some unteer for the companies. Training and ticipate in the Community Service Day of the expected outcomes of the pro- advice for employees' engagement are also envisaged. Volunteering is also pos- sible from the office by doing some financial, legal and other professional consultations, design and development of web pages, printing, and others.

Companies and guests who participated in the committee meeting, provided some ideas for the volunteering activities: Anglo-American School, CMS Cameron McKenna, Diageo, Kamenitza AD, Ernst&Young, Motorola, State Agency for 40 Information and Communication, U.S. Commercial Service.

Other CSR topics for discussion at later meetings could be sustainable develop- ment or recycling in the office environ- ment. Overall, the committee is interest- ed to provide information and discus-

AmCham Bulgaria Magazine April 2008 April Magazine AmCham Bulgaria Elitsa Barakova, Executive Director of Bulgarian Charities Aid Foundation (BCAF) (left), and Dana Leff, sions on topics of interest to the CSR CEO, AbCRO. community, Leff said. ■ csr corner Enemona Stakes on Energy Efficiency Projects The management of Enemona company strongly believes that electricity costs. a socially responsible business is much more stable and steady. That is why the company carries out its business In addition, energy efficiency projects are marked by a dis- activities with concern to the environment, personnel and tinctive social and environmental significance. The decrease society. The local communities are directly affected by the in energy consumption and reduction of carbon dioxide emis- company's corporate policy and business activities. Enemona sions by means of energy efficiency measures are among the is a major donor and sponsor of the municipalities where the key priorities of Enemona. main offices of the company are situated - Kozloduy, Sofia and Galabovo. Following the example of those two kindergartens, Enemona plans to become a part of a joint initiative of the Bulgarian Usually, donations are in the form of energy efficiency mea- construction chamber and the president of Bulgaria. The goal sures or financial aid to public events. One of the good prac- of that initiative is construction companies to execute renova- tices in the field of CSR is the donation of 100,000 Leva to tion and reconstruction works in facilities for orphan children the municipalities of Sofia and Kozloduy, made in the year of or other social institutions. In order to secure a significant 2006. The company has implemented energy efficiency mea- social effect, the company will choose carefully the benefi- sures in two kindergartens in Sofia and in Kozloduy for free. ciary of its donation. As a result, more than 200 children have the opportunity to attend the fully renovated kindergartens and enjoy consider- The company actively supports cultural and sport events as ably greater comfort and coziness. well as independent donor campaigns, which has proved their honesty and social importance. Besides the large-scale initia- Enemona did not pick the kindergartens to be reconstructed tives, the main priority of the company's management is the randomly, but after a long and precise process of evaluation. financial support for its employees or members of their fam- The quality of the construction work is a guarantee that in the ilies, who have serious health problems. future 15 years there will be no need for new major renova- tions. The donation has been professionally accomplished, as Enemona is a public Bulgarian company, which main activity energy efficiency is a part of the business activities of is the realization of projects and investments in the field of Enemona, which is one of the most experienced Bulgarian industry, conventional end nuclear energy, ecology, energy companies in this field. efficiency and the renewable energy sources. The personnel in its structure are over 2,800 managers, specialists and work- The donation brings long-term benefits to the kindergartens. ers. The company's shares are traded on the Bulgarian stock The results of the donation are multiple - energy losses exchange. Its annual turnover for 2007 is 89 million Leva, the decrease in parallel to the utility costs; the price of the real net profit is 14 million Leva and the market capitalization is estate increases; prime costs are reduced, while the compet- approximately 240 million Leva. The company has worked for itive power increases; the comfort increases. over 18 years in the field of energy and construction. Enemona is specialized in the management and execution of The reconstruction works and energy efficiency measures complicated, large-scale projects, some of which are on the that the company has implemented in both kindergartens, territory of NPP Kozloduy, Energy Complex Maritza Iztok, ensure comfort and up to 50-percent reduction in heat and Cumerio Pirdop, Kremikovtsi, etc. ■ AmCham Bulgaria Magazine April 2008

page 41

The old and renovated kindergarten Zhiva Voda in Simeonovo, near Sofia. csr corner Be There for the "Ghastly Bunch" For five years in a raw students from the American University in Bulgaria have the chance to meet some of the most influential people in to country thanks to a Dutch Professor By Georgi Ivanov Photos: Shpatar Morina,Photos: Shpatar FlashNews

From left to right - Boyko Vassilev, presenter of Panorama TV show, Professor Aernout van Lynden, the man behind the Tuesday meetings in AUBG and Milen Marchev, editor in chief of the AmCham Bulgaria Magazine. It is Tuesday evening at the American the contraceptive pill; political scien- set up the "Ghastly Bunch" with the pur- University in Bulgaria (AUBG) and a tists Andrei Raichev, Ivan Krastev and pose to bring guests who give real-life multitude of students are teaming in Ognyan Minchev; American examples, talk about current issues, and front of the Red Room. They have all Ambassador John Beyrle; and many have an informal discussion with the seen the 12-meter-long banner, promot- more. One guest, Philip Harmandjiev, students. The mission: "To broaden the ing the event: "TUESDAY, 7:30 p.m. RED even decided to sponsor the event with minds of students." ROOM. BE THERE!" Inside, waiting for his wine. them are Boyko Vassilev, presenter of This week's guests, Vassilev and Panorama TV show, Milen Marchev, The "Ghastly Bunch" meetings started Marchev, start speaking about their editor in chief of the AmCham Bulgaria as an initiative of Professor Aernout van experience, about the DOs and DON'Ts Magazine, and a dozen of red wine bot- Lynden, himself an extraordinary char- of their trade. The audience, including tles for the cocktail afterwards. acter. Half Dutch, half English, the son the president of AUBG Dr. David Huwiler, of a diplomat, he was educated in listens attentively. A discussion with the Tuesdays have become special at the Austria, the Netherlands and Great lecturers follows, and then an informal American University in Bulgaria Britain. He completed his military ser- cocktail. (AUBG), because during the last five vice as a lieutenant in the Royal years, a long list of outstanding pro- Netherlands Marine Corps. For 20 years This will be one of the last such fessionals from all walks of life have he was a war correspondent for BBC evenings, as their host and main orga- come to meet the students - each Radio, The Observer, The Washington nizer, van Lynden, is having his final time, on a Tuesday evening. The rea- Post and Sky News. He covered anti- semester at the university. He is going 42 son for this is a group that comprises Soviet resistance in Afghanistan, the back to spend more time with his wife of a journalism professor and some Lebanese civil war, the Gulf war, most of and three daughters in Holland. The tra- enthusiastic students with the odd the war in Yugoslavia, and the dition will either end or continue in a dif- name - the "Ghastly Bunch." Despite Palestinian uprising (2000-2001). He ferent way. But there is a group of out- the inconvenient time and location, came to Bulgaria when his wife standing people in Sofia and elsewhere they have been able to persuade Henriette van Lynden was posted as the in the world, who still keep, on the wall guests such as Milen Velchev, former Dutch ambassador to Sofia five years of their study, or in a drawer in their minister of finance in Bulgaria; ago. office, a poster, especially made for their

AmCham Bulgaria Magazine April 2008 April Magazine AmCham Bulgaria Magdalena Maleeva, world-famous presentation, saying: "TUESDAY, 7:30 tennis player; Carl Djerassi, inventor of Together with a group of students, he p.m. RED ROOM. BE THERE!" ■

enforcement A New Project on Cross- border Debt Collection Gets Speed in Bulgaria By Katilin Popov, Enforcement Officer in Sofia In the beginning of 2008 Katilin Popov Enforcement Officers as they are contacting easily and predictably only with the local (www.ppofficers.com) joined, as local partner and contact point contact point at their country of business. for Bulgaria, the EULAN - the European Legal Assistance Network. Through the Network we aim to provide our clients with Although only two and a half months has passed since Katilin sound and efficient cross-bordered debt collection services Popov joined EULAN we have already had several assignments across Europe. We believe cases where Bulgarian creditors have from our clients who needed assistance in settling their claims outstanding claims against foreign debtors will increase in next abroad. As a matter of example we can describe briefly three of few years while local businesses are getting more and more our cases. These are representative as to the scope of services familiar and used with the new opportunities that EU accession we are providing and how we operate. brings to Bulgaria resulting from free circulation of goods, ser- vices and people, Jos Uitdehaag, one of the EULAN founders and In the end of February we were contacted by a Bulgarian com- licensed enforcement officer in the Netherlands, said. pany that unexpectedly got the news for insolvency procedure that had been just opened for its Belgium client in Antwerp. The There are some key EU regulations that are applicable since time to react was really very short - just a couple of days. Our January 1, 2007 to Bulgaria and can benefit Bulgarian busi- client was invited to accept a recovery plan that implied a write- nesses in order to collect their due payments abroad. Among off of significant part of its claim. The decision whether to these are the EU regulations 44/2001 (Brussels I) on Recognition accept or vote against the suggested plan required a really fast and Enforcement of Judgments, 1348/2000 on Service of but at the same time thorough analysis of the situation. The Documents, 805/2004 on European Enforcement Order for effort included analysis of available alternatives under the local Uncontested Claims and 1896/2006 on European Payment Order. rules in case of no acceptance and related costs to each alter- native course of action. Professional talks with the trustee and Currently the EULAN is in course of establishment and on its way the local attorney who was dealing with the court proceedings of getting fully operational across all Europe. The EULAN busi- in Antwerp along with our Belgium contact point independent ness model is not a new one on that market - a network of local investigation on debtor's indebtedness were some of the key professionals specialized in debt collection who are organized factors for getting to our final statement and recommendations and coordinated by a central entity that enables and automates that we provided to our Bulgarian client. The second example is communication among them. Asked why did the EULAN founders a case that concerns a Bulgarian company with an outstanding chose this organizational model, Jos Uitdehaag explained - 'Even claim against a German company. Currently we are on the though the future may bring a uniform legal order over all Europe phase of investigation on debtor's solvency, i.e. company the reality now is that the most efficient way to get a legal action accounts, places of operation, real estates, receivables, other effected abroad is by hiring a local professional in the country outstanding claims, etc. The summary report of findings from concerned. Better efficiency, in terms of performance, time and that investigation is due by mid-April - a month after the initia- cost, is determined by possession of local knowledge and expe- tion date. To date our German contact has indicated some rience and considerations of national legal systems and regula- encouraging news. Simultaneously we are preparing for engag- tions'. The strongest competitive advantage of EULAN is that it ing in court suit in Bulgaria that will enable levy of precaution- can provide a full cycle debt collection service starting from data ary measures in Germany and issuance of European enforce- collection on debtors and their assets abroad, passing through able title to be served and enforced in Germany. Taking in con- mediation, levy of precautionary measures (if applicable) and sideration the history and perspectives of creditor-debtor rela- service of documents and ending with issuance of enforceable tionship our strategy in that case encompasses securing the titles and judgment enforcement. We can provide our clients with claim first and then trying amicable settlement trough negotia- a one-stop-shop in debt collection due to our local partners who tions and mediation. The most recent case we have is the one 44 are enforcement officers, attorneys, trustees and accountants where two Bulgarian companies had exported some technical who can by their own or in collaboration among themselves per- equipment to companies in Serbia and still did not get paid. We form the entire ensemble of legal and other actions in the debt are now at the in-take stage that implies, first, building the strat- collection process chain. They are professionals exercising on egy for action together with clients and our local partner in the debt recovery market for years - this can speed up the Belgrade and, second, project on related costs in terms of process as they may already have enough information on your money and time. Apparently in that case we should consider all debtor. We bring together the expertise and the scope of allowed new challenges that may appear as follow up of recent devel- and regulated activities of all EULAN local partners at service of opments in Bulgaria-Serbia political dialogue and their possible

AmCham Bulgaria Magazine April 2008 April Magazine AmCham Bulgaria our clients. At the same time diversity of local rules and admit- adverse repercussions on business and legal operations of ted activities does not affect the communication with our clients Bulgarian companies in Serbia. ■

member news

AES Geo Energy Launches Construction of a Wind Park AES Geo Energy will launch the construction of 156 mega watt- hours of the wind park near the town of Kavarna till this year end, Teodor Bobochikov, General Manager of AES Geo Energy announced during a forum on the investments in wind and water power electricity stations. The wind park will be situated on farming lands and the construction will take one year.

AES Geo Energy is an investment project for generating elec- tricity from environmentally-friendly resources, such as wind. The total investment in the wind energy project amounts to over 300 million Euro. When finished, the park will produce more than 450 gigawatt-hours of electricity annually, and will save about 500 thousand tones of carbon emissions.

Last December AES Corporation received a Class 1 investor Mr. Dimcho Kanev, Expert NEK certificate for the project with Geo Power. the period of birds nesting. Vestas, one of the largest producers of wind turbines, was cho- sen for the equipment delivery of the wind park has been cho- AES Geo Energy was set up after AES obtained a minority sen. AES Geo Energy has already signed a preliminary joining stocks package in the Bulgarian-German company Geo Power contract with the Bulgarian National Electricity Company two years ago. In addition, 40% of the stocks owns Yomi (NEK), and is working on a contract for buying of the elec- Engineering; the German company Geo Watt has 33%, and tricity. In addition, the Environmental quality assessment the rest is owned by Ерwar Establishment, registered in (OVOS) sets up some restrictions for the park construction in Lichtenstein. ■ New Laguna: Driving Pleasure with Complete Peace of Mind Its class-leading dynamic performance is a benchmark. Its chassis is responsive and its steering is particularly precise. Whilst being bigger and more spacious than its predecessor, New Laguna is notably lighter by an average of 15 kg and is available with a wide range of powerful and economical engines from launch, all with six-speed manual and automatic gearboxes. …complete peace of mind

New Laguna provides a real sense of peace of mind for all its Since it was first launched in January 1994, more than 2.3 mil- occupants. In terms of protection, it bene?ts from Renault's lion of the first two generations of Laguna have been sold. New acclaimed real-world accident knowledge and all of the latest Laguna is manufactured in the Sandouville factory in France technologies, in particular, side impact with an innovative thorax with a level of quality never seen before. Preparing for Renault's double airbag. The sophisticated air conditioning system offers return to the luxury car segment, New Laguna has been man- class-leading thermal comfort. Equally, much attention has been 46 ufactured to be both robust and reliable. The stated objective is focused on New Laguna's acoustics which are again top-of-the- to be in the top three of its segment for product and service class. With an economical and ecological 'Renault eco2' ver- quality. sion, New Laguna dCi 110 hp only consumes 5.1 litres per 100 km on a combined cycle, or 136 g of CO2 emissions per km. Driving pleasure… New Laguna is respectful of the environment right from its pro- duction through to the end of its lifecycle. The new Laguna was designed from the outset to give true dri- ving pleasure. It has a dynamic, streamlined and elegant form, New Laguna will be launched on the Bulgarian market in March

AmCham Bulgaria Magazine April 2008 April Magazine AmCham Bulgaria positioning it naturally in the realm of grand tourers, with an 2008 as the future reference point for the family saloon segment even more exclusive and distinctive pro?le for the Sport Tourer. in terms of usage, maintenance and repair costs. ■ member news

TeleLink Launches Education Project The official launch of "Flying start - become an expert with TeleLink will offer a two-year labor contract to the winner of TeleLink" was launched officially on March 27, 2008 The ini- the competition, which includes proprietary training programs, tiative was organized as a competition by Bulgaria's leading in addition to on the job training and distance learning from network integrator - TeleLink. telecommunications vendors. The universities, whose students have taken part in the competition, will receive the laboratory Company and Technical University - Sofia representatives exercises that were completed in stage two in order to inte- announced the official schedule of the competition at the grate pragmatic and modern telecommunications challenges Rector Building of the University followed by a cocktail in the into their curriculum. TeleLink will encourage students to select Telecommunication Department's Communications Laboratory. topics that can act as the basis for graduate projects and will The dean of the Telecommunications Faculty, Professor Pulkov, provide engineers to supervise the development of the pro- and Deputy deans Professor Pankov and Professor Dimitrov jects. Participants will receive vocational training and have the attended the event. opportunity to test their academic knowledge and technical skills in a real world setting. The educational competition is open to candidates in bache- lor's and master's programs studying at technical universities Online registration is provided by the specialized e-learning and colleges throughout Bulgaria. Competitors will be chal- company, EMbient and can be found at www.embient.eu/vlab. lenged to solve technical telecommunications tasks and their The website will also follow the progress of the competition performance will be judged before proceeding through each of and publish each stage's winners. Students are welcome to the three stages. The first stage will require students to answer register for the competition between March 27 and April15, standardized forms prepared by TeleLink, based on five mod- 2008. There is a one month deadline for completing stage-one ern networking research topics. The top 10 students will pro- tasks, meaning all projects must be submitted no later than ceed to stage two, where they will select and conduct labora- May 15. The chairman of the judge's panel will be Todor tory exercises that can be integrated into the curriculums of Georgiev, technical director of TeleLink. The other members of their telecommunications and computer courses. The students the jury include Ivan Zhitianov, head of the Integration finishing in the top three positions of stage two will be grant- Department, and Professor Alexander Tzenov, lecturer in the ed paid internships by TeleLink for a period of three months. Telecommunications Department of the Technical University - During this time the remaining contenders will spend between Sofia. four and eight hours per day on assignments that have been tailored to correspond to their respective tasks from stage two. The media partners of the initiative will also regularly These tasks will include the completion of an industry certifi- announce the results of the competition. They include the spe- cation in the field selected as well as active involvement in cialized weekly newspapers Info Week and Computers, as well projects, e-training, and on the job training provided by as New Television's HiTech, which broadcasts weekly on TeleLink. Sunday. ■

new members

MBL is a full- Three of the VM MANAGER magazine - leader in cate- service real Finance Group com- gory of business edition and advertis- estate firm panies operate in the ing agency A TEAM. providing solutions servicing the com- field of high tech- AmCham Bulgaria Magazine April 2008 plex needs of companies and individu- nologies: NET IS SAT Contacts: als. We serve a diverse set of local - telecom operator, Vassil Mirtchev and international clients, including New System - leader in building Chairman of the Managing Board developers, investment and pension automation, NET IS - offering complex Tel: 979 1691 funds, institutions, retailers and occu- information solutions. Another three E-mail: [email protected] piers. Our professionals have solid are specialized in distribution of Web: www.vmfgroup.com experience in the real estate and FMCG: AVENDI - one on the biggest Address: 7, Iskarsko Shousse Blvd., page financial fields, both locally and inter- Bulgarian distribution companies, TRD Trade Center Europe, building 2 47 nationally. - joint venture with German company Gerb. Heinemman, operating on the Contacts: duty free, travel value and travel free Mimi Belcheva, Director market, and DIREX - prime partner to Tel: ++359 2 9888 650, 9888 651 numerous Bulgarian producers and Web: www.mbl.bg importers of FMCG. The group con- Address: 24, Patriarch Evtimii Blvd. sists also of - BLS company - special- Sofia ized in transportation and logistics, exhibitions Bulgaria Promoted at Logan Airport The city of Boston became intimately acquainted with the country of Bulgaria when on March 6, 2008, undergraduates from the Harvard Bulgarian Club hosted a gala night, as part of the photo exhibit Bulgaria: Europe's Secret Treasure, entire- ly devoted to raising awareness about the culture and history of their country and the potential those offer for its future development. The event was held at the site of the exhibit, the International Terminal E of Boston's Logan Airport, and attract- ed over 150 guests from diverse backgrounds.

The main focus of the evening was the photo exhibit displayed on the walls of the terminal that portrayed various aspects of life in Bulgaria. The photographs, most of them taken by the acclaimed photographer Ivo Hadjimishev, were grouped into seven categories: History, Arts and Crafts, Culture and Traditions, Nature, Industry, People, and Lifestyle. The organi- zation of the exhibit was produced by members of Harvard Bulgaria's Ambassador to the United States Elena Poptodorova welcomed the Bulgarian Club, who were strongly supported by a wide range guests at the exhibit, together with the Honorary Consul of Bulgaria in Boston of partners and sponsors among which the American Chamber Frank Bailey (right) and HBC vice-president Evgenia Peeva (left). of Commerce in Bulgaria, Ernst&Young, NECA, the American Foundation for Bulgaria, Lufthansa, the American University in Bulgaria and others.

The gala night began with keynote speakers Ambassador Elena Poptodorova, Honorary Consul Frank Bailey, and Ernst&Young representative Bryan Pearce, who presented gen- eral information about Bulgaria and the benefits of investing in the country. In addition to the speeches and photos, the guests enjoyed traditional Bulgarian food and wine along with two unique performances. Bulgarian singer Maria Alexieva mes- merized the crowd with a traditional a cappella Bulgarian song. Members of the Harvard Bulgarian Club's dance group, dressed in traditional attire, performed two folk dances.

The student organizers were pleasantly surprised by the diversi- ty of gala night guests. People from all walks of life came to learn something new about this hidden treasure of Europe; the attendees represented academic, business, military, diplomatic, and artistic backgrounds, among others. The Harvard Bulgarian Club received overwhelmingly positive feedback after the event, and its members were confident that the guests had expanded their knowledge about what Bulgaria and its people are like. The photo exhibit will be on display in Logan's International Terminal until March 31.

48 The Harvard Bulgarian Club plans to continue its auspicious partnership with the Embassy of Bulgaria in Washington D.C. by sending the exhibit to other cities across the United States. In addition, members of the club continue organizing cultural events about Bulgaria at Harvard and promote. Apart from cul- tural awareness, since last year the Club has launched an edu- cational summer volunteer program in Bulgaria. Through STEP Bulgaria, international and Bulgarian volunteers teach them

AmCham Bulgaria Magazine April 2008 April Magazine AmCham Bulgaria valuable skills to facilitate their integration to adult life in soci- ety once they leave the orphanage at age 18. ■ View from above: Over 150 guests joined the exhibit.