Is the Memorandum with Gemcorp in force and does it have consequences for Bulgaria?

The "Gemcorp" deal of the former government led by the then PM Kiril Petkov caused frictions between GERB and "We Continue the Change". Today, November 21, GERB announced that it will refer the matter to the security services and the European Commission because the memorandum with the company has not been terminated and is a threat to national security. In their words, with this deal, the Bulgarian energy sector was given on a concession to an offshore company backed by Russian oligarchs.

“We Continue the Change”, Gemcorp and former energy minister Alexander Nikolov said any relationship between the company and the state has been terminated. The caretaker energy minister, for his part, said the memorandum had not been terminated. "Gemcorp” was supposed to help with energy investment projects related to Bulgaria's green transition.

GERB again accused "We Continue the Change" that the memorandum with Gemcorp was signed without the necessary documents and was still in force.

"Where is the decision of the Council of Ministers which instructed the Minister of Energy at that time to sign a contract with Gemcorp? And on top of that, in section 7 it appears that it remains in force for two more years with all its points, even if the memorandum is terminated," said Daniel Mitov, deputy chairman of the GERB-UDF parliamentary group.

"This here is not the state to entrust the state, this here is the state entrusts to an offshore company behind which there are Russian oligarchs," said Delyan Dobrev of GERB-UDF group.

"We Continue the Change" issued an official position saying:

"The memorandum with Gemcorp was terminated long ago and the issue has been closed, with absolutely no consequences for the state. At the same time, there are truly important issues for the people that the parties in the National Assembly should work on."

The company's CEO Atanas Bostandzhiev also denied GERB's claims that the contract was still in force.

"I am very surprised by these statements. The Memorandum was terminated, we received an official letter requesting cancellation. The document has been terminated and we do not have any claims, neither to the government nor to the state of Bulgaria", Atanas Bostandzhiev assured.

The caretaker energy minister Rosen Hristov, however, said that not only are the agreements with Gemcorp still in force, but they can actually make financial claims against the state.

"We terminated it unilaterally. Until this one-month period expires, this memorandum will be in force. Payments are expected under this contract, which is approximately 10 million, not a small amount," Rosen Hristov said.

GERB will insist on a further investigation into the case and will file a report to the State Agency for National Security, the Ministry of the Interior and the European Commission.

***

The memorandum of understanding with London-based Gemcorp Capital Management was signed by Bulgaria's energy minister on March 23, 2022.