The GREAT Mega Mission in Bulgaria

by Sarah Riley

Jonathan Allen has moved on as Her Majesty’s Ambassador to Bulgaria in January 2015 and Sarah Riley has stepped in as Chargé d’Affaires at British Embassy Sofia. This blog is written by guest blogger Sarah Riley.

More than 50 British businesses will this week visit Romania and Bulgaria as part of the “GREAT Mega Mission” to explore the business opportunities on offer in the two countries in four priority sectors: nuclear energy, oil & gas, transport infrastructure and water & environment. The companies arrived in Bucharest yesterday and will move on to Sofia tomorrow.

On the Sofia leg of the Mega Mission, the UK companies will be looking at potential investments and deals in Bulgaria. But the Mega Mission is likewise a fantastic opportunity for Bulgarian companies to look at what the UK can offer in terms of expertise and experience in the four sectors. The Mega Mission is one of the most significant British trade delegations ever to visit Bulgaria. And it is no coincidence that Bulgaria has been prioritised as a destination in these four sectors, nor that it has been chosen at this particular time.

It is, first and foremost, about the scale of the opportunity. Let me give you a few examples.

• In nuclear energy, where Britain is a recognised global leader, nearly €500 million in decommissioning work is currently being tendered on reactors 1 to 4 at the Kozloduy Nuclear Power Plant. Lifetime extension work on reactors 5 and 6 (worth a further €200-400 million) will be tendered later this year.
• In oil & gas, Bulgaria will invest €554 million in upgrading its gas transit infrastructure, including the interconnectors and storage required to capitalise on gas from the Southern Corridor.
• In transport infrastructure, over €700 million of Bulgaria’s allocation of EU funding between 2014 and 2020 will be available for priority railway projects. High-value road building/upgrade opportunities exist too, including the Struma Highway Lot 3 project worth €325 million.
• In water & environment, €2 billion will be invested through to 2020 in a wide range of different water projects, from sewerage networks to flood prevention. The UK’s environment & water sector, which employs around 80,000 people and generates over €4.1 billion of overseas business each year, is very well-placed to benefit.

However, the scale of the opportunity is only part of the story. For most companies, just as important are the “softer” factors that make doing business in Bulgaria more straightforward than in many other markets, including the proximity to the UK (Sofia is just three hours away by plane and there are a few flights a day from the UK to Bulgaria). The country has a well educated workforce which works at a competitive level of pay. English is widely spoken. There are low flat tax rates on both corporate and personal income. Big investors can expect to benefit from additional incentives. It is a dynamic market with many niche areas being developed by innovative local entrepreneurs, and a growing demand for high quality products and services. And as an EU Member State, Bulgaria is of course part of the EU Single Market.

While the risk profile for Bulgaria is lower than in some other emerging markets, Bulgaria is not without its challenges, particularly in the Rule of Law. We are pleased to promote the opportunities Bulgaria offers for British companies wishing to do business here, and to tell those companies about the success stories of British companies who already invest and trade here. But equally to provide clear advice to companies looking to develop business here.

For those of us who care about both the UK and Bulgaria, the Mega Mission may be the best opportunity we may ever have to bring representatives from the two business communities together in one place so that they can start building the kind of strong, sustainable relationships that will pave the way to commercial success for both sides. It is an opportunity we intend to maximise.