Three Seas Initiative Investment Fund acquires a “significant” share in the two largest terminals of port of Burgas

Burgas, Bulgaria (Ports Europe) June 21, 2022 - A significant, non-majority share in the BMF Port Burgas terminals operator in Bulgaria’s second largest port has been acquired by the Three Seas Initiative Investment Fund (3SIIF). This was announced by the Three Seas Initiative press service and Bulgaria’s President Rumen Radev, who attended the 3SIIF gathering in Latvian capital Riga. This is the first direct investment of the 3SIIF in Bulgaria, according to Radev. He added that the investment was "many times greater" than Bulgaria’s contribution to the 3SIIF, which is €20 million. The deal still needs regulatory approval. 3SIIF is reported to have three previous investments in Bulgaria. The Three Seas Initiative Investment Fund is an investment vehicle to finance key infrastructure projects in the Three Seas region. The main objective of the Three Seas Fund is to invest in transport, energy and digital infrastructure on the north-south axis in the Three Seas countries and to offset the differences in the development of individual regions of the European Union. An important task for 3SIIF is to select projects that improve connectivity in transport, energy and other infrastructure along the north-south line in Central and Eastern Europe - underdeveloped because for the past three decades the priority transport development was east-west. The press release states that the port is the closest connection by sea to Sofia and Plovdiv through direct surface (including rail) connections. The acquisition, according to Amber Infrastructure (which manages the 3SIIF), provides a serious opportunity to provide long-term growth of the port with investment and the expansion of capacity, modernisation of the facilities, as well as the ability to process new types of cargo. "Burgas is the closest EU port to the Bosphorus with important connectivity of our region with the Middle East and Asia, and this initiative will play an important role in promoting the further connectivity of the region," Radev said. "The investment in BMF Port Burgas is an exciting opportunity to support the further growth of the port in accordance with the goals of the fund," Amber Infrastructure quoted the words of the Fund's Investment Director. According to him, if the port continues to be developed and modernised, it will be important for "filling the gaps in the transport connectivity of the three seas, while bringing more general economic benefits to Bulgaria and the region". Georgi Domuschiev from Advance Properties, a sole owner of the BMF Port Burgas which owns the concession for the terminals, said that the deal is a "huge success" and an excellent opportunity for the port and will help the "diversification" of the region. Background Ownership In the autumn of 2021, it was reported that the concession for Burgas East-2 and Burgas West terminals, controlled by controversial Bulgarian businessmen Kiril and Georgi Domuschiev, were to be sold. According to the leading Bulgarian business newspaper Capital, in 2020 Advance Properties as a sole owner of BMS Port Burgas that owns the concession started seeking offers. It was being advised by a Netherlands-based financial consultant specializing in mergers and acquisitions in the field of maritime transport and port operations in order to organize a private tender procedure. Talks have been held with more than 30 companies. According to Bulgaria’s Transport Minister, a decade ago the concessions for the two ports were given to Domuschiev brothers for €400,000 each. In 2019, the concession for the ports was extended from 35 to 46 years and 8 months. Burgas East-2 and Burgas West are two of the seven port operators in the Gulf of Burgas. The seven port operators in Burgas together handle a total of some 22 million tonnes of cargo per year. Since 2013, the cargo turnover in the Burgas gulf has increased every year by about one million tonnes, according to state-owned Port of Burgas director Diyan Dimov. Port development In 2020, Burgas (Bourgas) started dredging works that will allow it again to accept Panamax type ships (over 50-60,000 tonnes). Work is also underway on the design and construction by the end of 2021 of a marina in the port, which will contribute to the development of the area, with docking places for a hundred boats of various sizes. Additionally, a parking lot for 400 cars has been designed with four levels. It will be situated on an area for which a detailed development plan was adopted in 2012. The procedure for the creation of the future Master Plan for the development of the port of Burgas is also currently underway. In April a new congress centre was inaugurated in the port. In July 2020, Bulgarian construction company Glavbolgarstroy (GBS) won two major orders for the expansion of BMF Port Burgas worth 310 million Bulgarian levs (€158.3 million), according to the privately-owned port operator. Ports Europe: Bulgarian Glavbolgarstroy won the two major orders for the expansion of BMF Port Burgas – July 28, 2020 The projects envisage the completion of quay walls, which will increase the capacity of the two terminals of the port and will allow larger ships to enter. The completion of the railway infrastructure and improved connections with the railway network are also included. The first project is for the expansion of the Burgas-West terminal which handles containers. The aim is to create four new berths with a total length of 810 meters for ships with up to 15.5 meters draft. The winning offer of GBS was for the construction of quay walls for berths 27 and 28 for 184.5 million Bulgarian levs (€94.2 million) and for quay walls for berths 25A and 26 for 66.5 million Bulgarian levs (€33.9 million) without VAT. The second project is for the construction of a quay wall for berth 33 at the Burgas-East 2 terminal (for bulk cargo) and is for 61 million Bulgarian levs (€31.1 million). The completion of the existing quay wall will extend the ship’s berth. Dredging of the operational water area and the manoeuvring area is also envisaged, as well as the construction of pavement and facilities, including a railway track. In addition to funds under the Connected Europe Facility (CEF), it will also use both own and borrowed funds. BMF Port Burgas has been operating the port of Burgas East-2 since 2012, and the following year took over the concession for Burgas West terminal. By end-2019 it has invested a total of 223.43 million Bulgarian levs (€114.13 million) in Burgas East-2 and 34.8 million Bulgarian levs (€17.8 million) in Burgas West terminal. In this time, cargo handled has increased threefold. As a result of the investment program Burgas East-2, the terminal was chosen as the main logistics base for the implementation of several international projects related to gas, drilling, exploration and extraction activities of potential and active oil and gas fields. The terminal is regularly visited by specialised craft and ships that deliver supplies to and from the drilling bases located in the Black and Caspian Seas. The area of port terminal Burgas East 2 is 419,468 m m². It contains 9 berths and 1 pier. The total length of the quay front is 1,592 metres and the maximum permissible draft is 14.6 metres which allows mooring of Panamax size vessels. The area of port terminal Burgas West is 641,499 m². It contains 6 berths. The total length of the quay front is 958 metres and the maximum draft is 11 metres. Burgas, had an increased cargo turnover in the first five months of 2022 by 40%. This is due to the blockade of Ukrainian ports and international sanctions against Russia for its invasion in Ukraine, Dian Dimov, CEO of the port said. He added that both large Bulgarian Black Sea ports of Burgas and Varna have seen a sharp increase of cargo volume since the Russian invasion of Ukraine started on February 24, 2022. The Three Seas Initiative (3SI) is a politically inspired, commercially driven platform for improving connectivity between twelve EU Member States located between Baltic, Adriatic and Black Seas. The members are Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia, Hungary, Slovenia, Austria, Croatia, Romania and Bulgaria. More Ports Europe news about Burgas Copyright (C) Ports Europe. All Rights Reserved. 2022.

Three Seas Initiative Investment Fund acquires a “significant” share in the two largest terminals of port of Burgas

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Three Seas Initiative Investment Fund acquires a “significant” share in the two largest terminals of port of Burgas

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