Austrian energy company EVN and the Bulgarian National Electricity Company (NEK) reached an agreement to settle a debt worth BGN 192 million (EUR 98,2 million).

The settled amount remains unknown, but EVN said in a statement that the agreement will increase its net income by EUR 38 million in the second quarter of this year.

This settlement encompasses the compensation for the additional costs for electricity from renewable energy and default interest charges in the period from July 2012 to July 2013, that were financed in advance by EVN and which NEK is obliged to repay.

The agreement reduces the risk of Bulgaria being forced to pay a fine by the International Centre for the Settlement of Investment Disputes (ICSID), local media report.  EVN brought arbitration proceedings before the Centre, demanding EUR 600 million.

At the same time, NEK initiated proceedings against EVN, as well as companies Energo-Pro and ČEZ, claiming BGN 111 million (EUR 56,77 million). The settlement signed with EVN involves mutual offsetting of the two companies’ debts.