Who Acquired Électricité de France Hydro Power Plants near Sofia for EUR 16 million?

Nikolay Marchenko

French energy giant Électricité de France secretly sold the “Kokalyane” Hydro Power Plant (HPP) and the “Passarel” HPP near the Bulgarian capital Sofia on Monday, October 22, 2018. Both HPPs now belong to the Luxembourg-based Akuo Energy. Тhe brother of Jérôme Cahuzac, France’s scandalous ex-Budget Minister and a protégé of former French President François Hollande, had lobbied for the offshore. The deal’s consultant in Bulgaria is Stéphane Colin, a partner of the buyer, whose company is linked to Georgi Hristozov and Borislav Lorinkov. The later, on their part, are believed to be the hidden owners of the “Vidahim” and the “Svishtov” Thermal Power Plants (TPPs). The deal further involves Société Générale Expressbank and EVN Bulgaria. One of the most important strategic investors in renewable energy in Bulgaria, the French mostly State-owned company Électricité de France S.A. (EDF) has left the Bulgarian electricity market several days ago, according to Bivol’s sources in the energy sector. There is no official information on the deal at this time.

The “Kokalyane” HPP was part of the French EDF Énergies Nouvelles until just several days ago (Photo by PhotoPlace.bg)

The “Kokalyane” and “Passarel” HPPs are an important element of the national energy security of Bulgaria and of the Sofia Municipality. They are part of so-called Iskar Cascade, their power is 58 megawatts and they were managed in Bulgaria by Centrale Hydroélectrique de Bulgarie, a subsidiary of EDF – EDF Énergies Nouvelles.

The deal was subject to discussions and “on the brink of being signed” for four years and in 2015, Capital weekly was the first to address the issue in its story “The EDF Giant Is Leaving“: “The French company is selling its water assets in Bulgaria“. The representative of Énergies Nouvelles for Bulgaria, Pepi Traychev, told Bivol that he was not authorized to comment on the deal. According to him, for the last three or four years, the deal has been managed from Paris and the Sofia office has not been involved in this process.

“I only know that the company’s policy is such not only regarding the sale of its business in Bulgaria, but also for the assets of EDF in a number of other countries,” Traychev said.

“Things happen very fast,” he added.

Bivol sent questions to EDF’s press office in France. We asked exactly what amount had been paid; did the company know who the buyer was, and whether Antoine Cahuzac had been a consultant in the deal. The press office assured us that they would send replies by the end of the week, but no such response was received.

French buyer registered in Luxembourg

The “buyer” is a subsidiary of Akuo Energy International, based in Paris. The company has been established in 2007 and specializes in renewable energy projects with its 16 other regional and national offices in other countries. In addition to France, it does business in the USA, Uruguay, Dubai, Indonesia, Morocco and Australia. In Eastern Europe, Akuo is a “player” not only in Bulgaria, but also in Turkey, Poland and Croatia.

Akuo Energy has consolidated revenues of EUR 149 million, according to data for 2015, and 610 megawatts of renewable energy sources (RES) installations, mainly solar and wind power plants, constructed or under construction. It is unclear whether it has any special experience in HPPs. But it is a relatively modest producer on the international energy market, compared to EDF which is one of Europe’s largest giants in the fast growing “green energy” sector.

The French Akuo has many connections but is a “dwarf” in the energy sector, compared to the giant EDF (Photo by Bivol)

The founders of Akuo Energy are Eric Scotto and Patrice Lucas, who is also the CEO. The other two members of Akuo’s Supervisory Board seem to be family related – Marie Christine Coisne – Roquette and Matthieu Coisne. This information is also confirmed by the Trade Register of the Republic of Bulgaria, where “Akuo Energy Bulgaria” is incorporated.

Akuo presents itself as a “French” company, but its beneficiaries are incorporated in an “onshore-offshore” jurisdiction – the Grand Duchy of Luxembourg. At least this is the case with the ownership of Akuo Energy Bulgaria, which is part of Akuo Energy International Sàrl whose headquarters are listed at 25B Boulevard Royal L-2449 Luxembourg (Lëtzebuerg) Holding. However, it is not known why the parent company of the Bulgarian branch of Akuo is registered in Luxembourg. It is entirely appropriate to verify the suspicion of a likely covering up of the tracks by the real owners by building a complex ownership scheme of the company abroad.

Obviously, the risk can also be worthwhile from a financial point of view. Akuo is not opposed to “motivating” its “proxies” with shares. The official consultant in the deal, Stéphane Colin, holds an entire 10% in Akuo Energy Bulgaria. The Akuo website says that the person in charge of the office of Akuo Energy Bulgaria in Sofia, on 29a “Slavyanska” Street is the same Stéphane Colin. He is also the CEO of Saga Commodities which deals with emission quotas and is linked to the owners of the “Vidahim” and the “Svishtov” (formerly “Sviloza”) TPPs.

According to Bivol’s sources, Colin could have taken part in the deal “in a personal capacity” and his share in Akuo speaks in favor of such a supposition.

However, in addition to Saga Commodities and Akuo Energy Bulgaria, Stéphane Colin is associated with several other companies in Bulgaria. According to the Trade Register, he is associated with the companies SAGA WOOD, Saga International and Saga Global Finacorp, as well as BENEVESTE Investment and Lili Fam.

Known players

The ownership of the “Vidahim” TPP and the “Svishtov” TPP, itself, is connected with infamous government and corporate players in the electricity market in Bulgaria. These are the ex-legal representative of “Vidahim” Borislav Lorinkov and the former Bulgarian Energy Holding’s (BEH) top manager Georgi Hristozov. Officially, the two are nowhere documented as owners of the two TPPs in which they are believed to be partners.

Georgi Hristozov led the Bulgarian energy sector during the socialist governments of Prime Ministers Stanishev and Oresharski (Photo: novini.bg)

“The latter has held a number of leadership positions in the State-owned energy companies, and was Chairman of BEH’s Board of Directors during the term of the Oresharski government,” Capital recalls in 2015.

In April 2013, Bivol and the site Offnews published a joint investigation into the fate of a tipoff about abuse and corruption practices with the participation of Georgi Hristozov and energy consultant Stefan Gamizov.

Then it was revealed that several years earlier Petar Dimitrov, the Minister of Economy and Energy in the cabinet of Prime Minister Sergei Stanishev has lobbied for the appointment of Hristozov as head of the “Maritsa Iztok 2” TPP. Bivol and Offnews wrote about a conflict of interest committed in order to “promote” people close to the Bulgarian Socialist Party (BSP) to key positions in the Bulgarian energy sector.

Saga Commodities is also associated with the electricity trader Energy Market, as the latter’s Executive Director Hristo Yanutsev is involved in Saga’s management. Yanutsev is the manager of the registered in Macedonia BGMK Engineering, which has the largest share in Ambrich (before Stimerg). The latter company is a shareholder both in the “Vidahim” TPP and in the electricity trader. Another shareholder and manager in Energy Market is Ilko Akov, who represents one of the shareholders in the “Svishtov” TPP – –IT Construction, registered in the USA.

Georgi Hristozov with Traicho Traykov, the Minister of Economy, Energy and Tourism in the first cabinet of Prime Minister Boyko Borisov (Photo by Dir.bg)

Thus, Stéphane Colin, himself, who formally holds 10% in Akuo Energy Bulgaria, can fully represent the interests of Hristozov and Lorinkov. And this may already mean a potential expansion of their business in the electricity market. Therefore, it would be logical to have approval for the EDF deal not only from the energy watchdog – the Energy and Waters Regulation Commission. A “green light” for compliance with anti-trust legislation, which is under the supervision of the Commission for Protection of Competition is also necessary.

Currently, there is no information on the existence of such oversight. According to Bivol’s sources, the rules had been circumvented due to the lack of response by the Energy and Waters Regulation Commission which had been examining the deal since April 2018. It was expected to make its decision by the end of October, but the seller and the buyer had not wanted to wait.

The sale of the HPPs also violates the so-called “Peevski Act” (The Law on Economic and Financial Relations with Companies Registered in Jurisdictions with Preferential Tax Rules, the Persons Controlled by Them and Their Real Owners), according to which the owners of media and energy companies must be known to the Bulgarian authorities. Thus, according to Art. 3 of the Act:

“Companies registered in jurisdictions with preferential tax rules and persons controlled by them are directly and/or indirectly banned from establishment or participation in an entity that performs activities under the Renewable Energy Act.”

BGN 12 million from the deal are “pending”

It seems that one of the problems in finalizing this deal is a lack of funding. Centrale Hydroélectrique de Bulgarie has been preparing the sale of its assets since the autumn of 2014. The deal was delayed by a year and a half since it should have been concluded by the end of January 2017 at the latest. It was expected that the energy watchdog would approve the deal and its financing through a loan from the Bulgarian branch of the French bank Société Générale – Société Générale Expressbank by the end of October 2018.

According to unofficial information, Akuo had not waited for receiving a positive decision for from the Energy and Waters Regulation Commission.

The company has paid about EUR 10 million, and has to repay in installments another EUR 6 million. For these millions, it has a bank guarantee from a foreign bank. Which bank has been ready to provide a guarantee to a company with an offshore property is yet to be established.

The original idea was to pay only half of the amount in advance and the other half with a loan from Société Générale Expressbank.

The amount seems suspiciously low. The current real price of these assets is at least EUR 25 million – EUR 30 million – more than the estimated EUR 21 million that the HPPs were supposed to be sold for in 2014. In 2000, this company was acquired by developer Hristo Kovachki for only USD 2 million. He later ceded it to EDF at a significantly higher price. Now this profitable and strategically important for the energy security of Sofia infrastructure will become the property of an investor that is “French” only on paper as Akuo Energy Bulgaria will be managed through its subsidiary in Luxembourg.

According to Capital, in 2014, mainly energy companies with experience in this business in Bulgaria had been invited to negotiate, such as the US company AES, which owns the wind farm “St. Nikola” and the “AES Galabovo” TPP, the electric power utilities with Czech ownership in Bulgaria – CEZ Bulgaria and Energo-Pro., as well as a number of other competitors – energy trader Most Energie, the owner of the “Svoge” HPP and Helios Power, owner of a 17.8 megawatts photovoltaic park.

Cahuzac’s brother

Antoine Cahuzac has lobbied for the deal with Akuo Energy in his capacity of CEO of EDF Énergies Nouvelles and its Board’s advisor.

The sale process had been initiated by a well-known French corporate boss whose name rises suspicions of a conflict of interest in the deal. This is Antoine Cahuzac, then CEO of EDF Énergies Nouvelles.

He is the brother of Jérôme Cahuzac, the scandalous former French Budget Minister, who held the post in 2012-2013. Cahuzac was known as a politician and person close to Socialist President François Hollande (2012-2017). He was fired over a corruption scandal involving dubious bank accounts in Switzerland and other offshore jurisdictions and was sentenced by a court of law.

According to information from Bivol’s sources, the buyer Akuo has an extremely complex ownership scheme. In addition to doubts whether the company is a serious strategic investor in the electricity market of the scale of a company such as EDF, this raises suspicions of lobbying for Akuo by the management of Énergies Nouvelles in Paris.

“It is quite likely that Antoine Cahuzac as a long-time friend of Akuo founder Eric Scotto has fought for a lucrative commission from the strongly promoted at all levels energy deal in Bulgaria,” says one of Bivol’s sources.

According to Bloomberg, Antoine Cahuzac was Chief Executive Officer of EDF Énergies Nouvelles from January 2012 to April 16, 2018. In the period and after the resignations of his brother and his patron François Hollande, he also served as Group Senior Executive Vice President of Renewable Energies at Electricité de France S.A. from March 2015 to 2018. Cahuzac has also consulted the new management of EDF Énergies Nouvelles in the deal with the offshore Akuo Energy International SARL. He has been a Director of EDF Trading Limited since July 18, 2014

Antoine Cahuzac’s LinkedIn profile shows that he is still an employee of EDF Énergies Nouvelles. There is no other information about him there, except that his friends list includes the entire Board of EDF.

Sentenced French Minister Jérôme Cahuzac is “a man” of former President François Hollande (Photo by Europe1)

Before returning to EDF, Antoine Cahuzac served as the Chief Executive Officer of HSBC Private Bank France, S.A. since May 2011, a top position prompting some French media to call Jérôme Cahuzac “a protégé of a foreign bank run in France by his brother”.

Antoine Cahuzac is a graduate of the prestigious French universities Ecole Polytechnique and Ecole de la météorologie nationale. He started his first job at EDF in 1982.

According to Bivol’s sources, since May 2018, he remains the “driving force” behind the deal with EDF’s assets in Bulgaria, but already in his capacity as advisor to EDF Énergies Nouvelles’ new CEO. He has been appointed to the post with the sole purpose of completing the deal for the sale of EDF’s business in Bulgaria and in other countries from which the French are gradually withdrawing.

Jérôme Cahuzac left his ministerial post after a scandal (photo by Le Parisien)

His brother, French Budget Minister Jérôme Cahuzac gained global notoriety in the spring of 2013 after his name was mentioned in the publications from the #Offshoreleaks journalistic investigations project. Then a number of investigative media revealed his investments in the Cayman Islands.

During the scandal, the then-French Head of State was pressured by the public opinion. François Hollande publicly committed to a course from “the offshore” to the save coast of transparency and accountability, Bivol wrote in 2013.

Meanwhile, the EDF deal has been launched at the level of preparation works during the socialist governments in Paris and Sofia. During this same period, the “Passarel” HPP and the “Kokalyane” HPP received BGN 7 million in State subsidies for potentially damaging for the dams floods. This, according to insiders, only increases the real value of the HPPs whose price at the end of 2018 is at least 1.5-2 times higher than the Akuo offer.

The businesses of Société Générale and EVN with Akuo

Bivol also has additional information that casts doubt on the legality of the energy deal. It turns out that in April 2018, a preliminary electricity contract was signed (Bivol has part of it), according to which the Austrian electric power utility in Bulgaria, EVN Bulgaria, will buy electricity from Akuo Energy Bulgaria at lower than the market prices. The contract is in violation of the Energy Act of the Republic of Bulgaria.

One of the main goals of this contract is to obtain approval from Société Générale Expressbank for a loan of about EUR 6 million to cover the shortfall in the deal. On the other hand, the French Société Générale and EDF are also longtime partners – the bank has been financing with millions the energy giant’s business around the world.

The deal dates back to the time when François Hollande and Plamen Oresharski, allies in the Party of the European Socialists (PES), were in the Council of the EU

The deal dates back to the time when François Hollande and Plamen Oresharski, allies in the Party of the European Socialists (PES), were in the Council of the EU.

According to Bivol’s sources, the bank has been approached by the top management of EDF Énergies Nouvelles, thus only confirming the presence of a lobby at the EDF headquarters in Paris. And, as it turns out, it is really in favor of the allegedly French company Akuo Energy.

Precisely, the long-standing head of EDF Énergies Nouvelles Antoine Cahuzac, who is still in the top management of the company that he has been running for six years, is believed to have been such a “lobbyist”.

According to the rules of the European Central Bank (ECB) and the Bulgarian National Bank (BNB), as a potential lender, Société Générale Expressbank has to conduct a thorough due-diligence of Akuo as a potential buyer that is in violation of the Bulgarian legislation and specifically the “Peevski Act” on offshore companies. It is unclear whether Société Générale has had “second thoughts” about financing the deal in Bulgaria as it is withdrawing itself from the country by selling Société Générale Expressbank to the Hungarian OTP Group, the owner of DSK Bank in Bulgaria.

The risky deal is also likely to have had impressed the headquarters of Société Générale in Paris. And there was a risk of a refusal by the Bulgarian regulator to approve the buyer, which is its right. In any event, if this was not the case, the buyers Akuo Energy Bulgaria (90%) and Saga Commodities (10%) would hardly change the creditor bank at the last minute.

So far, it is clear that the coincidences in the well-oiled and mysterious energy deal on the Paris-Sofia axis, conducted by the EDF Énergies Nouvelles offices, are too numerous to be absolutely random. Bivol’s investigation into the case continues.

Text: Nikolay Marchenko

Editor: Atanas Tchobanov


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