site.btaBulgaria Wins International Arbitration Case Worth Nearly EUR 1 Bln Brought by CEZ

The Republic of Bulgaria has won an international arbitration case (ICSID Case No. ARB/16/24) before the International Centre for Settlement of Investment Disputes (ICSID) in Washington, the Finance Ministry said on official website on Friday.

The case was filed on July 26, 2016, by CEZ a.s. of the Czech Republic. On January 29, 2026, the arbitral tribunal issued a ruling rejecting all claims by CEZ and finding that the actions of the Republic of Bulgaria, through the Energy and Water Regulatory Commission (EWRC), the Ministry of Economy, the Ministry of Energy, as well as the Sofia City Administrative Court, the Varna Administrative Court and the Supreme Administrative Court, did not breach the standards for the protection of foreign investments under the Energy Charter Treaty.

The total amount of CEZ’s claims reached EUR 967 million, plus interest of 1.9% compounded annually from the date of the ruling until final payment, the Finance Ministry said.

CEZ argued that it qualified as a foreign investor under the Energy Charter Treaty based on three separate investments in Bulgaria: in CEZ Distribution Bulgaria AD and CEZ Electro Bulgaria AD; in Varna Thermal Power Plant; and in the Bara biomass power plant.

The claimant challenged actions by the Bulgarian state, including those of the Ministry of Economy, the Ministry of Energy, the EWRC and the Bulgarian courts, alleging violations of its legitimate expectations and arbitrary conduct in price regulation, according to the ministry’s statement.

Regarding its electricity distribution and supply activities, CEZ sought compensation of EUR 733 million, claiming that the EWRC had acted arbitrarily in setting electricity prices in the period 2004–2018 and that judicial review of those decisions had been unlawful.

For its investment in Varna TPP, CEZ claimed EUR 220 million, alleging that Bulgaria had failed to meet its commitments to liberalize the energy market and that price regulation between 2006 and 2014 had been unjustified.

As for the Bara biomass power plant, CEZ claimed EUR 14 million plus interest of 1.9% compounded annually from the date of the ruling until final payment, arguing that changes in the incentive scheme for renewable energy sources had led to the total loss of its investment.

This is Bulgaria’s third consecutive victory in a series of cases brought against it by the electricity distribution and supply companies of EVN AG, Energo-Pro a.s. and CEZ a.s.

The total amount claimed in the three cases was about EUR 2 billion. The Finance Ministry stressed that the significance of these rulings goes beyond their financial value, as an unfavourable outcome would have required changes to the electricity pricing model and would have led to a substantial increase in prices for consumers.